2.Segment Data

The Company has two divisions, Home Health Care and Healthcare Innovations. The Home Health Care division is comprised of two reportable segments, Visiting Nurse Services (VN or Visiting Nurse) and Personal Care Services (PC or Personal Care). Healthcare Innovations (HCI) is also a reportable segment. Reportable segments have been identified based upon how management has organized the business by services provided to customers and how the chief operating decision maker manages the business and allocates resources, consistent with the criteria in ASC 280, Segment Reporting.

Consistent with information given to the chief operating decision maker, the Company does not allocate certain expenses to the reportable segments. The Company evaluates the performance of its business segments based on operating income. Intercompany and intersegment transactions have been eliminated.

The VN segment provides skilled medical services in patients’ homes largely to enable recipients to reduce or avoid periods of hospitalization and/or nursing home care. Approximately 94% of the VN segment revenues are generated from the Medicare program while the balance is generated from Medicaid and private insurance programs. VN Medicare revenues include revenues from all Medicare sources including traditional Medicare and Medicare Advantage, whether paid on a per episode basis or a per visit basis.

The PC segment services are also provided in patients’ homes. These services (generally provided by paraprofessional staff such as home health aides) are generally of a custodial rather than skilled nature. PC revenues are generated on an hourly basis. Approximately 78% of the PC segment revenues are generated from Medicaid and other government programs while the balance is generated from insurance programs and private pay patients.

The Company’s HCI business segment was created to house and separately report on our developmental activities outside the traditional home health business platform. These activities are intended ultimately, whether directly or indirectly, to benefit the Company’s patients and payors through the enhanced provision of home health services. The activities all share a common goal of improving patient experiences and quality outcomes, while lowering costs. They include, but are not limited to, items such as: technology, information, population health management, risk-sharing, care-coordination and transitions, clinical advancements, enhanced patient engagement and informed clinical decision and technology enabled in-home clinical assessments.


	Three months ended
Consolidated	April 1, 2016		April 3, 2015
Home Health Operations
Net service revenues:
Visiting Nurse	$	109,613	$	99,535
Personal Care		39,693		28,761
		149,306		128,296
Operating income before corporate expenses:
Visiting Nurse		14,975		12,400
Personal Care		3,737		2,898
		18,712		15,298
Healthcare Innovations Operations
Revenue		4,392		103
Operating income (loss) before noncontrolling interest		(673)		(517)
Corporate expenses		7,694		6,912
Deal, transition and other costs		2,609		406
Operating income		7,736		7,463
Interest expense, net (1)		(1,332)		(447)
Income tax expense		(2,677)		(2,987)
Net income	$	3,727	$	4,029