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LHC Group Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: March 10, 2011 06:24PM
LHC Group (LHCG) filed Annual Report for the period ended 2010-12-31.
Highlight of Business Operations:
According to Centers for Disease Control and Prevention (CDC), approximately 86% of the Medicare population has one chronic condition, 66% have two or more chronic conditions, and 40% have three or more chronic conditions. Chronic diseases, such as asthma, cancer, diabetes and heart disease, are the leading causes of death and disability in the United States and account for the vast majority of healthcare spending. They affect the quality of life for 133 million Americans and are responsible for seven out of every ten deaths in the U.S. killing more than 1.7 million Americans every year. Chronic diseases are also the primary driver of healthcare costs accounting for more than 75 cents of every dollar we spend on healthcare in this country, as reported by the CDC. In 2007, this amounted to $1.65 trillion of the $2.2 trillion spent on healthcare.
We also believe our post-acute service provides valuable alternatives to an underserved, rural patient population. According to the National Rural Health Association (NRHA), rural areas have a higher percentage of residents over the age of 65, who accounted for 18.0% of the total population in rural markets compared to 15.0% in urban markets. Additionally, according to NRHA, rural areas typically do not offer the range of post-acute health care services that are available in urban or suburban markets. As such, patients in rural markets face challenges in accessing health care in a convenient and appropriate setting. For example, NRHA estimates that although approximately 25% of Americans live in rural areas, less than 10% of the nations physicians practice in rural areas. According to NRHA, individuals in rural areas may also have difficulty reaching health care facilities due to greater travel time or a lack of public transportation. The economic characteristics and population dispersion of rural markets also make these markets less attractive to health maintenance organizations and other managed care payors. Government studies cited by NRHA have shown rural residents also tend to have more health complications than urban residents. Additionally, NRHA has noted that residents in rural areas are less likely to use preventive screening services and have a higher prevalence of disabilities, heart disease, cancer, diabetes and other chronic conditions when compared to urban residents. At December 31, 2010, 55% of our patient population lives in rural areas as designated by the Core Based Statistical Area population classification by the U.S. Office of Management and Budget.