Chemed (CHE) UBS Global Healthcare Conference summary

Business model and capital allocation

• Strategy remains focused on two service businesses, VITAS hospice and Roto-Rooter plumbing, with a high bar for adding a third business or pursuing strategic alternatives.

• From 2004 through 2025, both businesses grew just over 11% annually; share count fell from ~27 million to 13 million, while earnings grew ~18% and the stock price ~20% annually over the period discussed.

• Free cash flow will continue funding quarterly share repurchases and dividends; franchise buybacks and potential hospice acquisitions remain additional uses of capital.

• $96 million was spent on Roto-Rooter franchise repurchases this year; further opportunities are being pursued.

VITAS growth and cap management

• VITAS reported 12% revenue growth and 9.4% ADC growth; 2026 volume gains followed referral-source rebalancing and resource deployment, with first-quarter results ahead of expectations.

• Q3 admissions increased 5.7% from hospitals, 6.3% from homes, 8.1% from assisted living and 9.8% from nursing homes, supporting growth in longer-stay patients and ADC.

• Florida ended the Medicare plan year on Sept. 30 with a ~$32 million cap cushion; hospital referrals of 40%-45% help balance short- and long-stay patients and mitigate cap exposure.

• 2027 growth is expected to remain strong but below 2026's 9% volume and 12% revenue growth, partly because 2026 benefits from easier comparisons after ADC was deliberately reduced in H2 2025.

• Referral mix is monitored daily; resources can be shifted among hospital and non-hospital settings, though length of stay itself cannot be controlled.

Hospice market, oversight and operations

• By 2030, one in five Americans and one in four Floridians are expected to be over 65; average Medicare hospice patient age is 80, while 52% of Medicare decedents access the benefit.

• CMS suspended a little over 800 hospice provider numbers nationwide, almost 600 in California; increased oversight had no financial business impact, with a slight flight-to-safety benefit, particularly in California.

• VITAS supports stronger program integrity while opposing broad restrictions that could limit hospice access; management emphasized compliance and adequate state-level oversight.

• Staffing capacity is adequate for nearly 25,000 patients daily and anticipated 2027 growth; wage inflation was described as not much more than 3%, against a 2.3% Medicare market-basket adjustment.

• High-acuity care is required across hospice providers' four care levels; management said appropriate use can prevent costly returns to curative care and benefit patients and the Medicare Trust Fund.