Envision Healthcare reported an increase in net revenue for physician services in the first quarter of 2017.
The company reported two different operating segments post-merger with AmSurg: Physician services and ambulatory services. The company also announced plans to discontinue operations for its medical transportation services and re-allocate corporate expenses associated with the shared services model to continued operations. The company will divest the transportation services segment in the future.
Here are 11 things to know:
Physician services
1. Physician services net revenue reached $1.56 billion in the first quarter, a 9.2 percent increase from the same period last year based on the AmSurg and Envision Healthcare Holdings separate reports. Acquisitions contributed 9.7 percent growth and same contracts contributed 3.3 percent growth. The growth was offset by a 2.2 percent decline in physician services from net contract terminations and 1.6 percent decrease after terminating the Evolution Health population health contract.
2. Contract terminations were 8.5 percent of revenue for the quarter while new contracts were 6.3 percent growth, resulting in a 2.2 percent net termination rate. The company expects contract terminations to recede over the coming year.
3. Revenue grew 5 percent on a day-adjusted same-contract basis for the first quarter compared to the same period last year. Day-adjusted same-contract patient care volume was up 2.3 percent and same contract revenue related to rate grew 2.7 percent.
4. Overall, same contract revenue was positive for physician specialties. However, children's services experienced volume decline and lower patient acuity in certain programs.
5. The physician services adjusted EBITDA was $150.1 million for the quarter.
Ambulatory services
6. Ambulatory services net revenue was $315.9 million, up 2.8 percent from the same period last year. Same-center revenue was up 1.4 percent in the first quarter, including a 1.6 percent net revenue per procedure increase. There was a 0.2 percent drop in procedure volume.
7. Centers deconsolidated since the fourth quarter of 2015 impacted net revenue growth in the quarter, having contributed incremental revenue of $1.9 million in the first quarter of last year.
8. Ambulatory services adjusted EBITDA was $62.2 million for the quarter ; it was favorably impacted by the lower incentive compensation expense in the 2017 period and lower corporate expense allocation related to the merger.
9. As of the quarter's end, the ambulatory services division operated 264 ASCs and one surgical hospital. The segment acquired two centers and contributed two centers to joint ventures during the quarter in exchange for minority ownership in two separate centers.
Full company
10. The company's cash and cash equivalents are $225.3 million. Net revenue from the transportation services segment were $593.5 million, up 1.5 percent.
11. For the full year 2017, the company expects net revenue from continuing operations to hit $7.8 billion to $8.05 billion. Same contract revenue growth in physician services is expected to be 3 percent to 4 percent; same-center revenue growth for ASCs is expected at 0 percent to 1 percent.