AdaptHealth’s sleep business shows signs of recovery

PLYMOUTH MEETING, Pa. – Sleep therapy was the “big news” for AdaptHealth in the second quarter, with the company beating its expectations, says CEO Stephen Griggs. 

“Our census is up 16% from February 2022 when it hit its lowest level since the Philips recall began,” said Griggs on an earnings call. “While we do not expect Philips to be back in the market any time before early 2023, the increased production we have started to see from other suppliers has become more reliable and we have substantially increased our capacity to schedule and set up patients.” 

AdaptHealth had initially projected a negative 5% to negative 6% growth rate for its sleep therapy business. 

Still, without yet knowing its allocations for the last four months of this year, company execs remain cautious. 

“Last year, if you remember, we were expecting this boom in December and our allocations were pitiful,” said Griggs. “(Manufacturers) are not willing to guarantee anything to us, so we still have to live with that apprehension, at least for the next few months.”  

Also creating some uncertainty: the possibility of a recession, which could impact AdaptHealth’s growing diabetes business. Although the company reported non-acquired growth of 17% year-to-date for the category, the products are expensive for consumers, even with insurance, says Josh Parnes.  

“We have a very insulated portfolio, we believe, from overall recession, but if there is a potential drag, it’s likely in diabetes products,” he said.  

While AdaptHealth remains focused on the respiratory and diabetes businesses, the company has dipped its toe into other product categories through acquisitions it has made over the past 18 months, including orthotics and home infusion, says Griggs. 

“We’ve built up a nice little portfolio there, essentially a collection of infusion businesses,” he said. “Hospitals are interested in more and more of those services.”