Ladies and gentlemen, the program is about to begin. At this time, it is my pleasure to turn the program over to your host, Joanna Gajuk. Thank you.
Good afternoon, everyone. Thanks so much for joining the second day of our home care conference, and it's my pleasure now to host this session with Aveanna, one of the largest home care providers that's focused on private duty. And today with us, we have Jeff Shaner, CEO, Matt Buckhalter, who's the CFO, and Debbie Stewart, Principal Accounting Officer, so I'll first turn over to the team, and then we'll go into Q&A, and a note to the audience, if anyone has any questions, please use the Ask Question button in your browser. I'll be more than happy to post that question on your behalf.
Awesome. Thank you, Joanna. And then good afternoon, everyone. Thanks for spending some time with us. As Joanna said, I'm Jeff Shaner here with Matt and Debbie, and we're pleased to share our story with you. We are going to reference our investor deck, which is, I think, uploaded. It's on our website, but also should have been available to you today. So we're just some talking points in our investor presentation, and then we'll open it up for Q&A. First of all, we're pleased to share our Aveanna story with you today and really update you on our strategic plan for 2025 and give some insight into how we're thinking about 2026 and beyond. I'm going to touch on slide three in our investor deck, which is about transforming the value of home care.
Some things that are unique about Aveanna. We believe that scale and density of healthcare services help support our value proposition. Joanna said, we are a leading scaled national provider of home care services. Specifically, our diversified platform provides pediatric, adult, and geriatric services to more than 80,000 patients over 38 states. Our national platform is dedicated to high-quality clinical outcomes and cost-effective healthcare for our payer and government partners. We believe that by aligning our interests with our payer and government partners, we can improve access to cost-effective, innovative care in the comfort of our patients' home. If you'll see on slide five of our investor deck and our company overview, we highlight here our national footprint with over 366 individual locations in 38 states and still growing.
Something I'm sure we'll talk about today is our recent acquisition of ThriveSkill Pediatrics, which has enhanced our pediatric footprint into two additional states, specifically Kansas and New Mexico, as well as helped densify five of our current states in Arizona, Georgia, North Carolina, Texas, and Virginia. Our diversified payer mix supports an impressive 9.7% revenue CAGR over the last five years, and we'll point out that no single payer contributes more than 10% of our total revenue. We'll talk a lot in this call about our preferred payer strategy. It's highlighted on our slide here with 93 preferred payer agreements, inclusive of our three business segments, and we continue to align our caregiver capacity with these payer partners. We recently updated our revenue and Adjusted EBITDA guidance to reflect the continued momentum we're experiencing in our business. That was as of Q3.
And we updated to now expecting 2025 revenue to be greater than $2.375 billion and Adjusted EBITDA to be greater than $300 million. Q3 of 2025 did represent our 11th consecutive quarter of beating and raising guidance, and we expect that to continue. Our business plan is underpinned by thousands of dedicated clinicians and caregivers who provide compassionate care to our nation's most vulnerable patients. On slide six of our presentation, a little update on some of our strategic drivers of our business. We've talked a lot about this is 2025 is us finishing year three of our strategic transformation whereas we continue to focus on the things that have helped us right-size our business. Our strategic plan has continued to focus on five primary initiatives. First, enhancing partnerships with government partners and preferred payers to create additional capacity and growth.
Second, identifying cost efficiencies and synergies that allow us to leverage our growth. Third, modernizing our Medical Solutions business to achieve our target operating model. Fourth, managing our capital structure and collecting our cash while producing positive free cash flow. And finally, continuing to engage our leaders and employees in delivering our Aveanna mission. I say this on every earnings call. It's important to note that our industry does not have a demand problem. The demand for home and community-based care continues to be strong with both state and federal governments and managed care organizations asking for solutions that create more capacity while reducing the total cost of care. On our slide in slide seven in our deck, we update specific key performance indicators related to our preferred payer and government affairs strategy for each of our three businesses: Private Duty Services, Home Health, and Med Solutions.
Specifically in our private duty services business, our goal for 2025 was to increase the number of preferred payer agreements from 22 to 30. As of Q3, we have achieved our goal of 30 agreements, and we will expect that we will end the year above our targeted goal. Accompanying our preferred payer agreements in PDS is the addition of value-based agreements. These are above and beyond our enhanced reimbursement rates and are important to the long-term alignment of our partnerships. We currently have nine private duty services value-based agreements and expect that number to grow as we enter 2026. Our government affairs goal for 2025 was to achieve reimbursement rate wins in at least 10 states, as well as continue to advocate for Medicaid rate integrity on behalf of children with complex medical conditions.
As of Q3, we achieved our goal of 10 state rate increases and have now shifted our efforts towards our 2026 legislative goals. Moving to our goals for Home Health and Hospice, our goal for 2025 was to maintain our episodic payer mix above 70% while returning to a more normalized growth rate. In Q3, our episodic mix was 77%, and we currently have 45 preferred payer agreements for our Home Health business. Also, year-over-year episodic growth in Q3 improved to 14.2% and continues to generate solid clinical outcomes. Finally, as we achieve our desired preferred payer model in Private Duty Services and Home Health and Hospice, we have embarked on a similar strategy in our Medical Solutions business. To date, we have 18 preferred payers, and we expect that number to grow as we achieve our desired preferred payer model in med solutions.
Finally, for me on slide eight about our Aveanna long-term growth plans, we guide folks to our long-term organic growth rate of approximately 5%-7%. This is underpinned by the preferred payer and government affairs strategies I just mentioned. By aligning our clinical capacity with those government and payer partners that value our services, we are achieving accelerated organic growth rates in our business. In addition, our value-based agreements give us upside as we earn bonuses for achieving quality metrics and cost savings. Also, strategic tuck-ins in private duty services and home health and hospice, similar to the pre-mentioned ThriveSPC deal, can and will push us above the 10% annual revenue growth. Matt will add some color to our capital structure and our Q3 results and how we continue to delever as our revenue and EBITDA grows.
Finally, before I turn it over to Matt, I am very optimistic about Aveanna's future as we offer a cost-effective, patient-preferred, and clinically sophisticated solution for our patients and families. Furthermore, we are the right solution for our payers, referral sources, and government partners. Matt.
Thanks, Shaner. So starting off, kind of taking a look at our three operating divisions out here, we operate in three primary divisions, as you guys know. Our first and our largest one is private duty services. This represents a large piece of our organization, roughly about 82% in total. This segment historically grows in about the 3%-5% range in a normal, stable environment. We have been experiencing heightened growth currently, and that's really being accelerated by the idea of our preferred payer strategy and our government affairs strategy that Jeff highlighted earlier for us as well. Our second Medical Solutions segment is an enteral nutrition base, and that represents about 8% of our total company revenue. Traditionally, very fast organic growing business for us, 8%-10% total organic growth.
Though, as expected, and as we've communicated in a lot of our earnings, there's been muted growth for 2025 as we've been putting them through our modernization efforts. We expect to clear that hurdle kind of at the end of Q1 and get back to high single digits, low double digits, organic growth kind of moving forward. Finally, but certainly not least, is our home health and hospice segment. This one makes up roughly 10% of our total company revenue. And organic growth can be expected to be in the 5%-7% range long term. We do have a very disciplined approach to growth here in our Triple H business. We believe that episodic admissions and episodic growth is the path forward for us at Aveanna.
Not only does it allow us to take total care of it, but we see great clinical outcomes that come through our episodic admissions that we bring in as well, and so we are experiencing double-digit growth. Gosh, I think in Q2, we were up 15.3% year over year all organic in our Triple H division. Though over time, we think that will come back down in line to be in that mid to high single digits range long term. In total, adding those pieces up, organically, you're talking about Aveanna growing in the 5%-7% range, while also leaving room for some strategic M&A.
We like the idea of using our free cash flow to tuck in M&A where appropriate to allow for density in the market, diversification in the market, and to allow us to lean into our preferred payer contracts and arrangements even more so with those caregivers. So we want to just take a quick look over at slide 15. We can take a quick look at our financial statements and where we ended Q3 at. For the quarter, revenues were up 22.2% over the prior year, so $622 million, solid growth that we're seeing through Aveanna. Year- over- year, obviously, we've seen tremendous growth. It's really being led by two of our operating divisions right now. First and foremost, our PDS segment, which is up 25.6% in growth year over year, and then Triple H, which is up by that 15.3% that I referenced earlier.
Medical Solutions, as I talked about, muted in 2025. As we're putting them through our operating model and our modernization efforts, that will eventually mature and get back to that 8%-10% growth as we expect it to be. Consolidated just to give it an $80.1 million, so really nice EBITDA that we saw, up 67.5% year- over- year compared to the prior year. This was really driven by the improved government affairs strategy that we have, but also the preferred payers that Jeff referenced earlier and is a big piece of our initiative. I would like to also point out that we continue to be cost-conscious in all three of our operating divisions, including in corporate, to get the most out of every single dollar that we're putting towards this. You guys want to take a quick look at our capital structure over here on slide 16.
Strong liquidity in excess of $478 million, pushing $480 million of liquidity as an organization. $146 million, just shy of $150 million of cash on balance sheet or cash on hand. We've got $106 million of availability in our securitization facility. And then once again, undrawn our revolver as we continue to be just using it for letters of credit, so $227 million of availability there, so awesome liquidity as we have an organization and giving us plenty of room for bringing in a couple of small deals through M&A efforts. Taking a look at our debt stack itself, we have approximately $1.49 billion of variable rate debt. Nearly all of that is hedged through caps and swaps, though we do have some coming up next year.
Does a nice job of protecting us through rate volatility, and we'll look forward to doing something with those in the future as well. I do want to highlight, though, with our organic growth and what we've been able to do through our EBITDA, we have done a really nice job of deleveraging our organization as well. We're down three full turns in the first three quarters of this year alone. So on an LTM basis, on a net debt basis, you're looking at 4.6 times total company leverage at the end of Q3. We do remain focused as an organization as a priority of ours to get that down and be a sub-four times levered organization, and we have a pretty nice line of sight to be able to accomplish that as well.
Also, just to highlight, really proud of what the team's been able to accomplish on the free cash flow basis. As an organization, we climbed that hill in 2022, and we really haven't looked back since then, and so we had $86.2 million of free cash flow generated through Q3. We look to add to that here in Q4 as well and be able to continue that story into 2026, so just want to highlight a couple of other items. In Q3, we were also successfully able to refinance our term loan facility, and so we combined our two first and second into a one Term Loan B that really pushed out our maturities to 2032, so we have a long length. It also decreased our total cost of capital by about $14 million on an annual basis.
And that's already trading at a really nice level at this time too. I would be remiss to also point out that we did take care of our revolving credit facility at the same time and get that taken care of. So we're able to upsize that from about $170 million to $250 million in Q3 and put out the maturity until 2030 as well. So stay on both of those that we're talking about. Big focus of ours will continue to be generate Free Cash Flow on capital structure, generate Free Cash Flow, deleverage the organization, and just be really effective on any cost or any capital that we put to use within the company. So closing up on the big picture, and then we can open it up for Q&A. Just thanks, everybody, for your time today.
Obviously, there's been a lot of work done from our entire teams here, and we promise that we'll continue to execute a really focused, disciplined strategy as an organization. We're going to focus around the ideas of scale and scale matters, clinical excellence that scale allows us to achieve, and really, really strong partnerships with our preferred payer and government affairs partners. Those relationships have continued to blossom and bloom, and we see them continue to drive our company forward. So nice national footprint, balanced capital structure, strong momentum exiting 2025. Look forward to continuing to increase results into 2026. So with that, Joanna, I'll toss it back to you to see if there's any Q&A out there and let you go.
Yeah. No, thank you so much for this. So maybe just circle back to the PDS and the preferred payer contracts because clearly you guys have very good success there, right, and exceeding your target for the year. And I want to say on third quarter call, you said something about like 56% or so of your managed care PDS volumes were in these preferred payer contracts. So call it more than half, right, on the way to increase in Q4, sounds like. But the question is, how much more room there is to, I guess, do more of these preferred payer contracts? Is there some limitations? I guess what I'm trying to figure out is, or sort of like once you have the 30 or so in your head, it just makes it easier to kind of convert the rest of the business.
Yeah. I mean, by the way, so to your point, so more than if we back up three years, right, that number would have started like less than 10% of our business was with preferred payers. So nice progression in 2023, 2024, now 2025. I will say Thrive helped us. So Thrive, adding the two new states of New Mexico and Kansas, opened up two new markets for us. It is a committed movement long term for us over a 5-10-year period to align the majority of our business, being our clinical capacity and volumes with our preferred payers. It does take time to execute that strategy. I think we'll end the year in the high 50s, certainly in that 56%-60%. We'll set a new target. We haven't set one yet, but we'll set a new target for 2026.
It will be somewhere in the mid-60s% and growing. Joanna, I think as we talked before, we see that number getting into the low- to mid-80s% over the next two to three years. It may never get to 100%. Not every single one of our families or patients might be with a preferred payer. If you looked at the current admissions over the last three quarters, almost 95-plus% of our admissions in PDS are aligned with the preferred payer. The new patients coming in are almost all preferred payer patients. It's just because at the rate that that payer pays us, we're able to hire nurses in that market. It's a great trend to your point. Our partnerships have been great. We were talking with the investor earlier.
Our first preferred payer in 2022 is still part of the 30 today. So we've not lost a single preferred payer yet in PDS or any of our businesses. It could happen over time, but we've not yet. And so proud of even as we've added Thrive and the ideas of adding other companies like Thrive continue to expand the opportunity for us for new geography, new partnerships, and additional growth, which we're excited about.
And I guess you alluded to this idea of rate differential, right, and that allows you to hire the workers that are needed to provide care to these children. But can you share on average the differential between these preferred provider contracts and just say an average contract?
It's very market dependent, Joanna, that these occur. Obviously, the market for Texas or San Francisco or these high cost of living areas are going to be very different throughout. I would say there is a premium to it. And so is it roughly 20% premium that we're talking about to the fee schedule? Directionally, that feels correct, but I wouldn't say that applies to every single place in every single market. I think the thing you should come back to, though, is our gross margin between that contract and a normal fee schedule is still the same, though, after it all shakes out. And so we're just able to hire caregivers, retain caregivers, fill more shifts, have more patient coverage. And we're doing so by taking that premium that we're getting and investing into wages to solidify that care for our patients.
Joanna, I'm going to highlight that again, Matt's points. I think it's key. Our payer partners want to know that what they're paying us is going through to the wage. The best way to show them that is through our PDS gross margin, right? They have access to our wage rates now in the markets. They go on Indeed, and you can see the exact wage that you're paying for a nurse in said market. Transparency with our preferred payers has been crucial through the last three years, and will continue to be. As they win, we win, and as the family wins, we all win. I think to Matt's point, the biggest point for us is the additional dollars in rate go to additional dollars in wages, which allow us to hire more nurses, which allow us to take on more of their business.
As long as we're in that roughly sub-30% gross margin in PDS, our payer's happy, we're happy, and the family's happy. It's truly a win-win-win.
No, for sure. And also on a similar topic, I guess, the other piece in terms of your efforts around the, I guess, state rate increases. So it sounds like you made some progress there. But I want to say on third quarter call, you had mentioned there were actually some states that put temporary rate reductions. I mean, it didn't sound like it was a lot, like low single digits or something like this. But then, yeah, clearly some other states are giving you nice increases. So kind of as you think about, on average, how we should think about the rate growth that you expect, say, into next year or maybe a couple of next years?
That's a fantastic question. So as we have reported before, from 2022, so think of COVID and then the tail end of COVID through today, we've caught up in our 29 states. Now, some of those states are all MCO states, right? So there's a blend of Medicaid-reimbursed states and MCO states. But all of our states, with the exception of California, the rate and wage now works. So other than California, any state that we operate in, we have been successful in moving the state rate and/or the MCO rate to a place where we can hire nurses and continue to grow the business, which is key, right? So I think of that as a three or four-year catch-up. And there were some big rate increases in there. We've called out Oklahoma and Georgia and Minnesota and many others that along the way caught up 20%, 30%.
It was the first rate increase they had given in many cases over a decade. As we go into 2026 and 2027, we are thinking that that will be moderated pretty significantly. We talked on our Q3 call. We actually had 13 rate wins. We had 12 with two temporary rate decreases. When we reported 10, that was net of the two temporary rate decreases. The two temporary rate decreases were not material in nature. They were like one, two, three%-type temporary decreases. Still, it's signifying the changing of the guard of the long-term effects of the OBBBA bill and kind of how it settles in in our Medicaid system. As we think of 2026 and 2027, our goal is still going to be north of 10 rate wins through our state partners.
But we think there'll be small rate wins in nature, 2%, 4%, 5%. There'll be LPN, yeah, LPN weekend onlys or holiday weekend rates. We think there'll be very focused on solving specific outstanding issues in states versus 30% rate increase for all PDN across the state. And again, with the exception of California, keep going back to California, the rate wage metric does not work in California today. So our patients are suffering. Families are suffering. They're not getting the care. California actually spends about $330 million more per year in the hospitals because they haven't increased the rate in PDN significantly. We'll keep advocating. So are our peers. We're all advocating for the California Medicaid system. But as we think of 2026 and 2027, the company's really well positioned to kind of weather the next few years' rate environment.
Our size, our scale, our efficiencies, I think set us up really well to continue to be a great partner for our payers and keep growing the company while the rate environment's a little bit more muted.
It's great for value. There's a big value add that we're talking about as well that will be beneficial to them on a long way. And even those two that we're talking about, they were COLA adjustments up that got retroactive back afterwards. So no impact to us as a result.
Joanna, one of these years, one of these days, we're going to talk about a California rate increase. So it's five years, seven years since the last rate increase in California. Five years we've been advocating and spending money.
Yeah. So hopefully that shall come. But you mentioned the OBB, so that's what I was getting at. In terms of just are you hearing that the states are already kind of responding to what might come in the future in terms of when they try to figure out their budgets and the rates? Oh, did we lose the Aveanna team? Bear with us as we try to reconnect them. The Aveanna team has had some technical difficulties, but we have them back on with audio only, which is fine. So I don't know whether you heard my question, but I was asking whether some of these states coming out with these rate reductions, the temporary reductions, whether this was in response to the cuts that are coming in the future in terms of the Build Back Better bill.
If not, then maybe just kind of give us an update whether you are hearing from these states kind of being concerned and kind of preparing for what might happen to their budgets in the future under the reconciliation bill?
No, it's a fantastic question, Joanna. And so the two that were the two specific ones that impacted us were really more about just annual balancing of their budgets. And one was North Carolina. There's been a lot of buzz about North Carolina. They actually gave us a rate increase and then froze it and then temporarily reduced it. And so Governor Stein has been fantastic trying to work with us in the industry to get the rate reinstated. Their goal was just to balance their budget, and then they would reinstate rates. That's moved around. The other one was Colorado. And Colorado, again, gave us a rate increase in July and then did a temporary freeze closer to October. And I think the great part about being in the Medicaid business, Joanna, is it's 50 uniquely different states, and they make 50 uniquely different decisions.
We've seen that over the last four years as we've had many rate wins. I do think what we're seeing and what we're hearing, I mean, we've talked to many of our governors I mentioned earlier. I think our governors have more insight now into what the longer-term impact of the OBBBA legislation is. I do think the first part of this year, as we talked to our governors, they really struggled. They were still guesstimating and estimating what the impact would be of a bill that was yet to pass. I think now that it's passed, that they have a better understanding. We see governors and Medicaid directors making decisions. Some of them, I'll use Wisconsin as an example. Wisconsin, after almost 20 years, passed a material PDN rate increase back in July and August. We're not large in Wisconsin, but it's a positive thing for Wisconsin.
I think it showed that each state still makes their individual decisions. But I do think to the nature of your question, what we're hearing from our governors is just having to be incredibly thoughtful on every dollar that they spend. They still don't have a full knowledge and insight into what years 2027, 2028, 2029 look like. So they're being very thoughtful. But as Matt said earlier, most of our governors and our Medicaid directors recognize private duty nursing in the home saves the state and the government money. And so cutting PDN rates is not in their best interest. And we've heard that universally across all of our state partners.
All right, so I guess there's more TBD, but as of now, it doesn't seem like these governors necessarily target PDN, but I guess they're trying to work it out, I guess, so I guess we'll see where it lands, and I guess your long-term growth algorithm includes a couple % of your % to 1.5% from deals, right, so given this beautiful bill and potential uncertainty of what might come and such, should we expect you to continue to do deals, or do you first want to kind of see how states respond to the funding cuts under the reconciliation bill? How should we think about that piece?
Yeah. No, I mean, we believe we're the nation's leading provider, largest and leading provider of private duty services, and we want to continue to grow. We want to continue to be the partner that our large payers want us to be across many states, and again, I use Thrive as an example. Kansas, which was not one of our top five markets to expand to, was important to one of our national payers, and so thankfully, to Thrive, we were able to get there and help them solve a problem with PDN, so I think the larger and the more scale we get across many of the Medicaid states, the better partner we can be to some of our national partners, so we're going to continue to grow organically and inorganically, to your point. We think we can get a couple of percentage points of growth.
My gut is Matt talked about our organic growth has been running high single digits over the last two years, which is outpacing our long-term algorithm. I think as you think about our growth rate organically for 2026 and 2027, and then you tack on a couple of percentage points of M&A growth, I think you're going to see us continue to be in the double-digit revenue growth for 2026 and 2027. It'll be a little bit more of volume growth and M&A growth than rate growth, right? So it'll balance a little bit. But I think you'll continue to see Aveanna in the 10-plus% total growth. And again, M&A will be a little bit more of that, and volume will be a little bit more of that. But it's a good problem to have. And we want to continue to scale this platform.
Again, we might not be in all 50 states five years from now, but we'd like to be in about 40 to 42 of the 50 states, Joanna, in the Medicaid business.
Right. Right. And then, so on that growth, I guess, algorithm math. So it sounds like the rate growth is going to slow down. But then I want to ask you about that volume growth. So clearly, there is the acquisition. But even if you exclude that deal in third quarter, the hours actually grew very nicely. So what is the sustainable growth in hours, I guess? So thinking about volumes in that business, say, into next year, a couple of years going forward.
We've been in the high single digits to Jeff's point earlier, Joanna, of where we're at. I think volume was in the high single digits, pushing 8-9% organically, as we're talking about, because you do have a little bit of the murkiness in there with the Thrive deal, which was an awesome deal for us. Eventually, that will come back down in line to be in your 3.5%, 3-3.5-4% range, as we expected with our long-term growth algorithm. You sprinkle in the additional point to point and a half of rate in there for the PDS segment. That's how you get to your 3-5% kind of range, so we think that's the long-term plan. We still think there's a little bit of time before that gets to that point, though, as well.
And we're just saying that, hearing that, and seeing it with so much pent-up demand and with the success of our preferred payer contracts, they keep pushing more and more patients to us. And most importantly, we're able to pay our caregivers the appropriate amount to staff these set cases too. So you've got some time before it gets back down to the low large numbers, 5% range. But we'll be still north of that kind of outlooking right now.
And I think to Matt's point, well into 2026. So we agree when you think two to five years out, we think we land back in that sub 5% volume and rate growth in PDS, non-acquired. But I think to Matt's point, certainly through Q4 and everything we can tell, Joanna, we still have a tremendous amount of pent-up demand running through the first half of next year.
It's probably not until the back half of next year that we see that growth rate kind of get back in that 5% range.
And if we might have a couple of minutes left, so your other businesses, so home health is relatively small for you guys. But historically, you did talk about this being a growth driver where you want to grow more. And now we finally got the final home health regulation. It's clearly much better than the proposal, but still a cut, right? And how we should think about the impact to you guys and any mitigation strategies there. And then just, yeah, thoughts of how we should think about home health rate outlook going forward. Sounds like there's some moving pieces, but I would like to hear how you're thinking about that, Rag.
Yeah. And let's start with just the rate. So I'll go on record. We acknowledge and we appreciate both CMS and the current administration for pausing between the proposed and final rule and listening to the industry. I think that's the key, is that we believe they listened to the industry's feedback and actually made positive changes to the final rule. With that said, it's still a negative rate. So I think you'll hear from every CEO; it's still a negative rate against positive inflation in the home health business. And that does not make sense. Home health is a cost-effective, patient-preferred healthcare setting, right? So it's still the right type of patient. I think when you focus on Aveanna and specifically our home health business, I mentioned, and Matt mentioned as well, we're growing north of 10% organically in that business over the last two quarters.
We believe that will be the case through the end of the year and into 2026. We are in a great spot. We've had a very disciplined approach to growth. We're pushing high 70s% episodic business, both between Medicare and non-Medicare payers. We love our partnership with our 45 preferred payers in home health. We've got gross margin in line. We've got fantastic clinical outcomes. Matt talked about clinical outcomes. We're north of 4.3 out of 5 stars in our home health business and continuing to improve. We are a TPS winner next year. We are receiving value-based TPS payments from the government. All of that said, we want to expand our geography in home health. We want to expand our current geography and the future geographies in home health. We believe deeply in the business.
We just think that it's a great solution. It's also a great feeder to our hospice business long-term. Again, we're bullish on home health. Certainly, the final rule makes us feel more confident in the ability to invest capital into the home health business. We're aligned with our peers to find a longer-term rate solution for home health that really values what home health does for the nation's geriatric population.
To that end.
Joanna.
Go ahead.
I was going to say, you'll hear us continue to be bullish on growing the home health business.
Right. And to that end, I want to ask you specifically, so do you think this is enough, I guess, visibility from that final regulation to see more investment in this space and more, I guess, deal activity?
I do think it begins. I mean, it's been a desert of investments. So the home health business has been a desert for the last three-plus years of people leaning in, investing, acquiring. So I think it gets incrementally better. Yeah, I think folks, the draconian side of this is better. And certainly, we acknowledge CMS for giving some of the insight into that. But I got to go back to still, it is a negative rate in a positive inflation environment. And when you total up the last five years since 2020, you're still talking 15%-17% negative rate in a space that's dealt with 30% inflation. So I think, Joanna, it's a step in the right direction. And we want to acknowledge that with this administration. We appreciate it. But I think it needs stability. Home health deserves and needs rate stability over the long term.
We also are just firm believers that it's in the long term. I think you're hearing that from our tone and as an organization and as an industry, it's on the right side of healthcare. It's the lowest cost setting. It's the patient-preferred setting, and it's the right thing to do as an organization. So, though we're looking at what we believe short-term headwinds that are going through, leading in the long run, this will be the it'll come out on top.
Great. That's all the time we have for today. But thank you so much to the Aveanna team. And thanks, everyone, for listening. And please stay tuned for more.