VITAS Healthcare, a subsidiary of Chemed Corp. (NYSE: CHEM), is going toe-to-toe against referral disruption and continuing workforce pressures. The company came out of the first quarter bruised, but still on its feet.
The pandemic continues to impact the company’s facility-based referral sources, particularly with the Omicron surge that lasted through much of the first quarter.
The company saw an 8.9% drop in admissions to 16,530 in Q1, with referrals from senior housing and nursing homes staying below pre-pandemic levels for the time being. Likewise, VITAS’s average daily census declined 4.1% to 17,313.
These pressures, coupled with rising inflation, staggered the nation’s largest hospice provider by market share in the early part of the year. But more recent indicators suggest some degree of normalization in the coming months, Chemed CEO Kevin McNamara told investors in an earnings call.
“Recent admission data suggest senior housing is in the process of recovery,” McNamara said. “Our 2022 guidance anticipated sequential improvement in senior housing-based patients in the first quarter of 2022, with an acceleration and senior housing admissions anticipated throughout 2022.”
Nursing home patients in particular represented 15.9% of the company’s ADC during 2021. This marks a rise from a pandemic-induced low point of 14.3% and is up slightly from 15.6% in Q4 of last year.
The company saw average length of stay rise in Q1 to 104.8 days, compared to 94.4 days during first quarter 2021 and 97.9 days in Q4. This suggests some normalization is occurring as COVID infection rates drop, as length of stay has been a pain point for many providers during the pandemic.
Net patient revenues fell 5.3% to $299 million during the first quarter of the year.
VITAS has been on a recruitment blitz during late 2021 and early 2022 to counter the industry-wide workforce shortage. The company reports some positive trends, though results do vary from market to market, according to VITAS CEO Nick Westfall.
One positive sign is that more licensed clinicians are coming on board full-time as opposed to part-time, though performance on net hiring and turnover rates remains below pre-pandemic levels.
“VITAS, no different than any other health care provider, continues to double and triple down with an absolute focus on both recruiting and retention, in particular for our clinical workforce,” Westfall said. “There’s some markets where we’re seeing real positive progress. There’s others where we’re continuing to flip the proverbial pancake.”
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