Kindred Healthcare Inc., Q3 2008 Earnings Call Transcript

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2008-10-31 17:42:12.0

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Question-and-Answer Session

Operator

Thank you, sir. (Operator Instructions) And we'll take our first question from Bryan Sekino of Barclays Capital.

Bryan Sekino - Barclays Capital

Hi, good morning many this is actually Bryan Sekino on behalf of Adam Feinstein.

Paul Diaz

Good morning.

Bryan Sekino - Barclays Capital

Good morning. I just wanted to ask you a bit of question as you look at your occupancy, it was kind of up year-over-year and we see your admissions increase, but just kind of wanted to think about where you would have expected it to be in the LTAC division of (inaudible) kind of where you had expected it at the end of Q2?

Paul Diaz

Really, if you look at the days, the length of stay declined both in Medicare, but particularly in the commercial side really affected our revenues and affected our length of stay. During a period of typically low occupancy anyway, our third quarter, which we've talked a lot to investors about, this drop of length of stay sort of caused a double whammy for us. And we see that length of stay, and we've seen over many years the length of stay bounce around a little bit, depending on the mix of patients we'll get. In this third quarter, again, in a period of seasonally low census, we sort of had that double whammy with that drop in length of stay.

Bryan Sekino - Barclays Capital

Okay. So like -- so you saw your LOS come down. Now, when you talk about that double whammy, are you talking about acuity as well?

Paul Diaz

No, the acuity does bounce around as well. What I'm talking about that is that we -- we've not really seen a sort of this kind of drop in length of stay, particularly in the commercial business, happen in the third quarter, and so that resulted in the much lower days than on an average daily census that we expect.

Bryan Sekino - Barclays Capital

Okay.

Paul Diaz

And again, nothing systemic here. I think that's the important point. We've talked about over the years that we see our length of stay and the mix of patients, there is volatility in that when one looks over the 12-month, 18-month period. This was somewhat unexpected in seeing this length of stay drop during the third quarter as well.

Bryan Sekino - Barclays Capital

Okay.

Rich Lechleiter

 

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