Aveanna Healthcare (AVAH) Jefferies Global Healthcare Conference summary

Strategic transformation and operational momentum

• Entering year two of a strategic transformation, focusing on accelerating preferred payer and government affairs strategies.

• 2023 focused on stabilizing revenue, earnings, and defining a preferred payer approach.

• 2024 emphasizes shifting caregiver capacity to payers offering enhanced rates and value-based models.

• Recent quarters have seen strong performance, with beat-and-raise results and positive momentum.

• Free cash flow generation and capital structure improvements are key priorities.

Rate increases and government affairs

• Targeting 6–10 Medicaid states annually for material rate increases, aiming for 8–12 per year long-term.

• Recent wins include a 34% rate increase in Georgia, with similar efforts ongoing in California and Massachusetts.

• Rate increases enable improved staffing, business growth, and higher fill rates, especially in underfunded states.

• Most incremental rate is passed through to caregivers, boosting recruitment and retention.

• Legislative cycles and advocacy are central to achieving these rate improvements.

Growth, fill rates, and preferred payer strategy

• PDS segment volume growth has accelerated to 3–4%, expected to normalize at 3–5% after 1–2 years.

• Fill rates for preferred payers now reach 90%, up from 40–50% during COVID, with non-preferred payers lagging.

• Recruitment responds rapidly to wage increases, with job postings and transparency aiding hiring.

• Value-based agreements allow for additional bonuses by meeting performance metrics.

• Execution of the preferred payer strategy is key to sustaining growth and operational efficiency.