AdaptHealth looks to simplify

PLYMOUTH MEETING, Pa. – Complex rehab is out, sleep was up, and diabetes was down in AdaptHealth's second quarter, company execs said during a recent call. 

The company recently signed a definitive agreement to sell certain custom rehab technology assets to National Seating & Mobility as part of a larger move to re-evaluate products that don’t fit its strategic roadmap. 

“For AdaptHealth, these products represented a small amount of revenue from individual acquisitions over the years but in aggregate represent about a point of enterprise revenue,” said CFO Jason Clemens. 

‘New milestone’ 

AdaptHealth’s sleep revenue for the quarter was $322.4 million, an increase of 6.5% over the prior year, driven by new patient growth, said Clemens. 

“New starts were strong, up over 5% sequentially from Q1,” he said. “Notably, our sleep resupply census reached a new milestone in the quarter and now stands at over 1.6 million patients.” 

The company is also conducting its own research to closely monitor patients on GLP-1 weight loss drugs, said Clemens. 

“Over 30% of new patients responded to our GLP-1 survey in the quarter, which showed that approximately 12% of those patients were prescribed GLP-1 therapy, up a touch from the first quarter,” he said. “While we continue to closely monitor adherence and resupply ordering patterns in our GLP-1 patient cohort versus patients not currently utilizing GLP-1 therapy, we have not detected any notable difference to date.” 

‘Slightly worse’ 

AdaptHealth’s diabetes revenue was $151.2 million for the quarter, down $17.7 million over the prior year and down $13.2 million for the first half of 2024, said Clemens. 

“We expected pump and supplies revenue to decline by about $10 million for the first half, but results were slightly worse as some patients held off on new tubeless pumps, pending CGM compatibility that just recently launched, so we believe that starts should pick up in the second half,” he said. 

That’s already turning around, with set-ups increasing in July for the Omnipod 5 insulin pump, said Clemens. 

‘Realized potential’ 

Looking at the rest of the year, AdaptHealth is focused on strengthening the business to deliver organic growth in sleep, respiratory and diabetes, said CEO Suzanne Foster, who took the reins May 20 and has spent the last two months traveling to meet employees and assess operations. 

“Overall, the business is performing well,” she said. “I am especially impressed with the depth of commitment and knowledge of this team. There are, however, some key areas where we can improve to realize our full potential and growth. We're making several investments now in the areas of talent, strengthening our processes focused on organic growth, simplifying the business, developing a long-term strategy for sustainable growth and technology adoption.”