Aveanna’s 4-Pillar Strategy for Growth

Aveanna Healthcare Holdings Inc. (NASDAQ: AVAH) is focused on growth in its private duty and home health businesses in 2024, particularly through value-based contracts.

The company sees this approach as a mechanism for improving hiring and building clinical capacity amid labor headwinds. Aveanna added four value-based payer contracts during Q1 for a total of 18 and set a goal for increasing that number to 22 by year’s end.

“We also experienced improvement in our caregiver hiring and retention trends by aligning our efforts to those payers willing to engage with us on enhanced reimbursement rates and value based agreements,” CEO Jeff Shaner said in an earnings call. “While we continue to operate in a challenging labor and inflationary environment, our preferred payer strategy allows us to return to a more normalized growth rate in our business segments.”


In a Q1 earnings call today, the company had no word on how these efforts could impact its hospice business or their plans to grow those services.

However, Aveanna executives did lay out four pillars of their strategy, instituted last year and continuing into 2024. These include enhancing private and government payer partnerships, expanding caregiver capacity, identifying cost efficiencies and synergies, managing its capital structure to produce positive free cash flow and “engaging leaders and employees on delivering our Aveanna mission.”

Aveanna’s net service revenue reached $490.7 million during the first quarter of the year, up from $466.4 million in the prior year’s period. The company attributed the increase to a $22.1 million gain in its private duty business, which offset a $1.5 million decline in home health and hospice revenue.


The company’s home health and hospice segment earned $54.6 million in Q1, down from $56.1 million year-over-year.

The labor headwinds remain the biggest obstacle to achieving further growth for Aveanna.

“The labor environment represented the primary challenge that we needed to address to see Aveanna resume the growth trajectory that we believe our company could achieve,” Shaner said. “It is important to note that our industry does not have a demand problem. The demand for home- and community-based care continues to be strong, with both state and federal governments and managed care organizations asking for solutions that can create more capacity.”

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