Addus HomeCare is there for those who need in-home personal and medical care services. Doing business through subsidiary Addus HealthCare, it serves the elderly, disabled, and chronically ill through two divisions. Its home and community unit provides longer-term, non-medical social services, such as bathing, grooming, housekeeping, meal preparation, and transportation. Its home health division provides skilled nursing and rehabilitative therapies typically on a short-term basis to those recovering from hospitalization, for instance. State and county government payors generate most of its revenues. The Illinois Department of Aging is its largest customer (43% of revenues). Addus HomeCare went public in 2009.
Addus offers an integrated service delivery model whereby patients can receive a full spectrum of social and medical home care services from a single provider. The company believes this model is beneficial because it allows patients to stay within one service delivery system as their health care needs change and it also reduces the costs of payors dealing with patients that are frequently hospitalized or admitted into skilled nursing facilities.
The company employs homecare aides (about 90% of its workforce), nurses, medical social workers, and physical, occupational, and speech therapists to cover a range of patient needs. In its home and community segment, it also operates a handful of community adult day care centers in Illinois that offer social activities, transportation, exercise, and cognitive therapy in a group setting.
Operating from close to 120 locations, Addus provides its services in about 20 states, primarily in the midwestern and western US, with its largest markets in Illinois, California, Nevada, and Washington. It receives about 80% of its revenues from personal and home support services that are reimbursed by state and county elder care programs. Medicare is its second-largest payor group (12% of revenues), with Addus providing services to Medicare-eligible patients recovering from acute medical conditions. Other payor clients include the Veterans Health Administration, commercial insurers, and private individuals.
The company's ability to keep its net revenues growing is dependent on maintaining current payor client relationships, winning new payors, and increasing its referrals through coordinated care. It is also dependent on state agencies continuing to authorize home health care services to consumers. Addus' strategy is to widen the breadth of its service offerings, open new offices, and make strategic acquisitions of smaller home health providers in existing and new markets. In the past four years it has acquired about a dozen small to midsized home care organizations, including its 2010 purchase of Advantage Health Systems (renamed CarePro). It expects that an aging population in the US, with the number of people aged 65 and older expected to double by 2050, will also continue to buoy demand for its services.
In fiscal 2011 Addus' net service revenues were $273 million, or a 0.5% increase over 2010. The company's net loss for the year was $2 million compared to net income of $6 million for 2010. This was due, in part, to revaluation of contingent consideration related to its CarePro acquisition.
Proceeds from the company's 2009 IPO were used to pay down debt and other expenses related to a 2006 transition in which investment firm Eos Capital Partners took control of Addus. Through that 2006 transaction, Addus HomeCare was created by Eos as a holding company for the acquired operations of Addus HealthCare, a company founded in 1979. Following the IPO, Eos' stake in Addus HomeCare was reduced from nearly 80% to less than 40%. Directors Mark First and Simon Bachleda control Eos' stake. – less