AdaptHealth: Diabetes course correct shows ‘promising signs’ ‘We had lost focus on how we manage patient interactions’
By Theresa Flaherty, Managing Editor
Updated 11:16 AM CST, Wed February 26, 2025
PLYMOUTH MEETING, Pa. – After consecutive declining quarters in Diabetes Health, AdaptHealth has remodeled its diabetes outreach program and integrated diabetes resupply into sleep resupply and adopted that segment's best practices, says CEO Suzanne Foster.
A diagnostic review highlighted several reasons for Diabetes Health’s underperformance, she told analysts on a recent call to discuss the company’s fourth quarter and full year 2024 financial results.
“Notwithstanding structural reimbursement pressures that have weighed on all operators in the medical benefit channel, we simply weren't keeping pace with the competition,” she said. “Among other causes, our review determined that we had lost focus on how we manage patient interactions. Excessive patient outreach elevated attrition rates with existing resupply patients and depressed diabetes new starts by damaging our standing with referring physicians.”
While revenue for Diabetes Health decreased 7.3% in the fourth quarter compared to the prior year quarter, it posted sequential growth of $30.2 million – “promising signs that these actions are working,” Foster said.
However, “One quarter does not make a trend and it’s going to take some time to improve performance,” she said. “But I have confidence that the team is executing well on its plan to shore up the processes and we are cautiously optimistic that diabetes will become less of a drag on our overall organic growth rate over time.”
Other highlights from the call:
‘Area of strength’
Sleep Health net revenue increased 3.4% year-over-year to $356.5 million, and new starts surpassed 120,000 for the third consecutive quarter, said Jason Clemens, CFO.
“Our Sleep Health census now stands at 1.66 million, up another 23,000 sequentially and up 6.5% from year end 2023,” he said. “Our Sleep Health business continues to be an area of strength.”
Capitated agreements
AdaptHealth execs say they are also pursuing multiple capitated contracts and recently agreed to a multi-year extension of the company’s Humana contract.
“We have ongoing conversations going with a variety of proposed capitated arrangements in our pipeline that are progressing well,” said Foster. “In terms of the data and conversations with Humana, that relationship remains very strong.”
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