Tag - PSYS

The simple version of the story is that Healthcare providers typically get paid less per dollar of care (reimbursement) from government insurance programs (Medicaid, Medicare, and COBRA) then from private insurers.  These companies, and many investors, will be listening for details regarding reimbursement rates for the proposed public option.

If we look at some of the biggest stock market losers from yesterday, the list is literally crawling with wounded healthcare stocks...

Providing services for those in difficult straits doesn’t seem like a popular business, and it isn’t. But it can be a profitable one, particularly when handled by Providence Service Corp. (Nasdaq: PRSC).

Providence delivers privatized social services in clients’ homes or communities; the company does not own any hospitals, correction facilities, treatment centers or group homes. Providence seeks business through state and local government initiatives, offering foster care and home- and community-based service alternatives in adult and juvenile justice, corrections, welfare systems, and Medicaid. As it continues to find room for more services, the company moved into the in-home tutoring space, workforce development and private probation services markets through several acquisitions completed in 2006.

Since its founding in 1996, Providence has grown from 1,333 clients to more than 70,000 in 318 locations in 36 states and the District of Columbia. Headquartered in Tucson, Ariz., the company now has market capitalization of $348 million. 

Just this month, Providence began operating in Canada by buying workforce-trainer WCG International Consultants Ltd., a Victoria, British Columbia-based company. Providence sees Canada as a growth spot, considering the country’s liberal benefits—including those for job training—and robust economy. There also are few if any home-based providers in western Canada, CEO Fletcher McCusker said on the second quarter conference call earlier this month. The company looks for other opportunities in British Columbia and in other provinces.

In the United States, there’s good reason to expect more growth. The trend is toward privatization of government services, and larger numbers of people are becoming eligible for these services because of income, emotional or educational disabilities, or court orders.