Sun Healthcare reports solid fourth-quarter, annual growth

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Sun Healthcare on Wednesday reported "respectable" earnings growth of 7.7% for the fourth quarter of last year and 18.3% for 2009 overall. The nation's sixth-largest skilled nursing provider said Medicare payments for higher acuity residents, as well as upticks in its affiliated hospice and therapy businesses, drove results.

"The story of the quarter is the story of the year," said Sun Chairman and CEO Richard K. Matros. "Successful execution of our high-acuity strategy drove rate growth, resulting in revenue growth for both the quarter and the year of 1.6% and 3.2%, respectively."

While noting that "softness" in occupancy and payor mix were restraining factors, Matros also pointed out that Sun achieved revenue growth in every quarter of 2009. He said the slow national economy has hurt the company's staffing business, CareerStaff, and is expected to continue to do so. But a re-emphasis on short-stay, high-acuity residents -- including an increase of the company's Rehab Recovery Suites beds to more than 35% — as well as robust hospice growth, should continue to serve the company well.