New Amedisys CEO Ashworth Bullish on Contessa, Palliative Care

Since Amedisys Inc. (NASDAQ: AMED) sees a changing of the guard in its senior management, the company is not going to slow down in palliative care.

The Baton Rouge, Louisiana-based healthcare and hospice services company recently selected the former president of Walgreens Co. Richard Ashworth as their next CEO. He will replace chairman Paul Kusserow, who returned temporarily as the company’s chief executive officer last year.

Palliative care came to the fore for Amedisys during Kusserov’s second term at the helm, with its subsidiary Contessa spearheading a new business line. For example, the company recently signed a contract with Blue Cross Blue Shield of Tennessee to provide palliative care.

Despite limited reimbursement options, the opportunity to expand palliative care represents a goldmine for Contessa, potentially beating Amedisys’ expectations when it acquired the business in 2021 for $250 million.

“I think the opportunity is all-in [with Contessa] more, mainly due to the fact that we discovered palliative care and entered into this contract … ”, Kusserov said in an interview with Hospice News. “Palliative is interesting because I think we’re the first home health company to take real risks.”

The term “true risk” refers to the reimbursement models that dominate Medicare Advantage (MA)—per-member monthly payment combined with cost savings from reduced inpatient care.

With a change in leadership, Ashworth will have to see this palliative care initiative through to completion.

Most recently, Ashworth was President and CEO of Tivity Health (NASDAQ: TVTY), a health solutions company that contracts with MA plans.

Amedisys will build on Ashworth’s experience with the MA in the coming years as more home care, emergency care and palliative care services shift towards managed care.

“Another thing [in choosing Ashworth] this is Titivi. One of the things that I think is really important is that they depend on payers and their understanding of how payers work,” Kusserov said. “Understanding how to deal with payers is becoming increasingly important, understanding how payers think about what they are looking for. I think we have solutions for them.”

Given Amedisys’ national reach, Ashworth’s experience in the upper echelons of government at several companies also makes him a suitable candidate, Kusserov said. At Walgreens, for example, he managed nearly 275,000 employees in 9,500 offices across the country, generating more than $115 million in revenue, according to an Amedisys press release.

Amedicis

Whereas, the home healthcare and hospice provider currently has 532 offices across 37 states and the District of Columbia employing approximately 20,000 people.

Ashworth began his career as a pharmacist and the desire to return to the clinical space was one of the factors that attracted him to Amedisys, he told Hospice News.

He also shares Kusserov’s vision of Contessa as an engine of innovation and growth, with its suite of emergency home care services, its thriving palliative care business, and legions of joint ventures.

“I think from an Amedisys perspective, we can take on everything that can be done at home, and we can be the main point of contact for providers, physicians and healthcare systems – and ultimately payers – in a way that brings for the benefit of all,” Ashworth said. “We have huge room for growth [with Contessa]and perhaps all of this is reinforced simply by a fragmented market growing behind us, a tailwind of an aging population.”

Contessa’s growth trajectory is undeniable. The subsidiary earned $5.9 million in the last three months of last year, up from $2 million in the fourth quarter of 2021. Amedisys expects Contessa’s revenue to triple in 2023, with palliative care a major driver, company executives said in an earnings call.

Despite this potential, Amedisys cannot put all of its eggs in the ever-expanding Contessa basket. Ashworth will be tasked with driving the growth of the company’s home healthcare and hospice business.

This will require strengthening the company’s defenses against rising headwinds, as well as navigating a business environment fraught with inflation, labor and capacity shortages, and uncertainty about reimbursement, especially for home health care.

These factors contributed to a tumultuous 2022. For example, net income attributable to Amedisys per diluted share fell to $3.63 last year from $6.34 in 2021.

In the fourth quarter, the company’s net services revenue rose $2.7 million to $562.0 million from $559.3 million in the prior year period. But its hospice segment’s revenue fell to $197.6 million in the fourth quarter from $204.9 million in 2021, which the supplier attributed to a lack of capacity due to a lack of jobs.

For his part, Ashworth sounds optimistic.

“I know there are short-term issues right now, some exogenous, cyclical things like workforce and talent. New ad models should be customized along with MA,” he told Hospice News. But in any business there are such problems. I think, overall, it’s a pure possibility.”