Baton Rouge-based home nursing giant Amedisys Inc. has hired health care industry veteran Paul B. Kusserow as its president and chief executive officer.
Kusserow, 53, has more than 17 years of experience in health care and health care technology. His career includes stints at Humana Inc., where he served as senior vice president and chief strategy, innovations and corporate development officer, and most recently he was vice chairman of Alignment Healthcare Inc., a clinical care company focused on Medicare patients.
Kusserow agreed to a five-year contract as CEO, according to a filing with the U.S. Securities and Exchange Commission. His compensation package includes a base salary of $875,000 and a cash bonus of no less than $218,750 for meeting target incentives. Kusserow also may receive 75,000 shares of stock and the option to purchase 250,000 shares of Amedisys for 2014 and 2015. The incentive bonus and equity awards must be approved by the board’s compensation committee.
Amedisys shares closed Tuesday at $26.65, up 9 cents per share.
Kusserow has “a broad and deep understanding” of the health care business, from information technology and payors to hospitals and other providers, as well as a track record of delivering long-term growth strategies, said Don Washburn, Amedisys’ chairman of the board. Six months of working with Kusserow — he was a consultant for Boston Consulting Group — while developing Amedisys’ turnaround plan convinced the board Kusserow was the right person to lead the company.
Brian Tanquilut, senior vice president, health care services equity research, at Jefferies & Co., said Kusserow’s pedigree includes time at marquee companies Humana, Tenet Healthcare Corp. and McKinsey & Co. Inc.
Kusserow has built a very good reputation in the health insurance world.
“I think people are looking at that positively, especially given where the Medicare world is heading, meaning there are more people enrolling in Medicare Advantage plans than before,” Tanquilut said. “Given that this business is changing and even home health is headed in that direction, I think this is viewed as a win.”
Kusserow said he was honored to have the chance to lead Amedisys and expects the company to build on the strong growth demonstrated over the past 10 months.
He takes over a company with 396 home health and hospice locations in 34 states, annual revenue of about $1.2 billion and 13,000 employees.
Tanquilut said investors will want to see Kusserow’s vision for the company and how he plans to re-accelerate growth and return Amedisys to the kind of results the company generated just a few years ago.
From the early 2000s until 2010, Amedisys churned out quarter after quarter of record earnings and growth. But the streak ended after a Wall Street Journal analysis raised questions about publicly traded home health companies’ billing practices. Amedisys’ profits and share price fell.
In February, founder, Chairman and CEO William F. Borne resigned. Amedisys President Ronald LaBorde, a board member since 1997, was named interim CEO. A month later, the company brought former Chief Financial Officer Dale Redman out of retirement to serve as interim CFO.
Amedisys slashed costs, closed and combined poorly performing locations, and strengthened patient admissions and volume. The company reported a third-quarter profit of $8.4 million, or 26 cents per share, easily outstripping Wall Street analysts’ projections.
LaBorde will remain on as vice chairman and will remain a board member, according to the company. LaBorde will report directly to Kusserow.
Tanquilut said LaBorde and Redman did a good job turning around the business.
It’s nice to see that LaBorde will stay with Amedisys, Tanquilut said. It’s a sign of stability and continuity, and a signal that a lot of the steps that LaBorde and Redman made to stabilize Amedisys will continue. Tanquilut expects Amedisys eventually will name a new CFO, but Redman, who is more than capable, is likely to continue as interim CFO for stability’s sake, he said.
“I am delighted to pass the baton of leadership to Paul and look forward to teaming with him to advance the vital mission of Amedisys,” LaBorde said in a prepared statement.
Follow Ted Griggs on Twitter, @tedgriggsbr.