Kindred Healthcare, a post-acute-care provider, reported a jump in income as it shifted its focus to more profitable services and continued to hold down costs.
The Louisville, Ky.-based company reported net income of $8 million in the first quarter compared with $3.1 million in the same period last year. Revenue increased 2% to $1.3 billion.
The company delivered strong results despite volume and reimbursement pressure across its segments. It previously launched a strategy that would place more emphasis on home health and rehabilitation care while shifting away from skilled nursing.
That shift is nearly complete, the company said in a news release. It divested 26 nursing centers as of May 1 and is on track to complete another 59 divestitures. All but one facility should be divested by the end of the third quarter, Kindred said.
In its hospital division, which includes transitional care and inpatient rehabilitation, admissions were essentially flat year over year, and the company saw a 2% decline in revenue from reimbursement cuts, including sequestration.
Its RehabCare division similarly faced reimbursement pressure but managed to improve operating margins to 11.4%, from 11.1%, by cutting expenses. Kindred also said it added 45 new skilled-nursing rehabilitation sites during the quarter.
In addition, the company's nursing center division saw a 13% increase in operating income on greater revenue per patient day, despite a decrease in admissions.
Acquisitions also bolstered its care-management division, which saw 70% growth in revenue and 30% growth in operating income, the company said. Kindred acquired Senior Home Care in December and Western Reserve Senior Care (now Kindred Home Based Primary Care) in August.
In addition, it disclosed an agreement Monday to own and help operate the Silver State Accountable Care Organization in Las Vegas, which will be part of its care-management division.
The company also announced a $0.12 per share dividend that will be paid to shareholders June 11.
Follow Beth Kutscher on Twitter: @MHbkutscher
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