AdaptHealth blazes trail

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Friday, December 13, 2019

PLYMOUTH MEETING, Pa. – AdaptHealth has made its eighth buy since announcing plans to become a public company in July.

The company announced last week that it had acquired High Point, N.C.-based Advanced Home Care, with 23 locations across the Southeast and net revenues of $83 million.

“Advanced is a great platform for us to expand in that geography, but more importantly, there’s a lot of folks in management and on the team that we are excited to partner with and take this business to the next level,” said Josh Parnes, president and COO. “We’re going to continue to be acquisitive with the right companies.”

AdaptHealth also recently bought McKesson’s Patient Care Solutions business.

The horizon is bright for the HME industry, says Parnes.

“The HME industry is at an inflection point where this tremendous demographic tailwind, along with the much bigger trend within health care of payers and patients wanting to be in the home, bodes well for us as an industry,” he said. “That’s an integral part of what we do.”

One potential shadow: Medicare’s competitive bidding program.

After pushing the pause button to retool the program, CMS will announce the single payment amounts for Round 2021 sometime this summer. That could have some investors taking a wait-and-see approach, says Parnes.

“Investors are somewhat cautious, but I also think that smart investors have looked historically at what competitive bidding did to the industry—it’s caused consolidation, but it didn’t kill companies like AdaptHealth—it’s made us stronger,” he said.

For the better, competitive bidding has forced providers like AdaptHealth to leverage technology like e-prescribing to increase efficiency and eliminate costs, says Parnes.

“If a customer knows exactly where their order is, similar to an online or Amazon experience, it creates transparency for the doctors, the payers and the customer waiting for it,” he said. “HME is already very cost effective, but with e-prescribing it could be more so, so we are pushing for more of that to drive change.”