AdaptHealth works on diabetes, as sleep & oxygen make gains

PLYMOUTH MEETING, Pa. - Diabetes revenue for the fourth quarter of 2023 was down 3.8% against the prior year, driven in part by compression on insulin pumps, but AdaptHealth execs say they plan a big push to boost that part of the business in 2024. 

Pump revenue in 2022 was about $160 million, and the company expected revenue of about $120 million in 2023. 

“We came right in line with that expectation,” said Jason Clemens, CFO, during a recent call to discuss the company’s fourth quarter and full-year earnings. “We had briefly talked about a $35 million to $40 million headwind, and it literally came square in the middle of that.” 

To support more growth in the category, AdaptHealth hired Briah Carey as president of diabetes in January and has doubled the size of its sales force. 

The company is also ramping up to participate in the “growing pharmacy channel” for diabetes devices, officials say. 

“We’re working diligently to identify appropriate partners to work with us on this,” said Richard Barasch, chairman and interim CEO. “Entering the pharmacy channel is not a small enterprise for us. We’ve got a 50-state pharmacy, but we do need to do this as efficiently as some of our competitors. So, we are spending time and resources to get ramped up in this quarter and hope to have something to talk about in a couple of months.” 

Additionally, in response to an industry shift toward tubeless pumps, AdaptHealth has been providing Insulet’s Omnipod 5, as well as Beta Bionics’ iLet Bionic Pancreas, a new entry to the market. 

Revenue drivers 

AdaptHealth reported fourth quarter revenue of $858.2 million, an increase of 10% compared to the fourth quarter of 2022. Of that, sleep comprised $328.8, an increase of 15.2% compared to a year ago. 

“Based on reliable industry data, we have yet again increased our market share and are clearly the No. 1 provider of CPAPs and related supplies in the United States,” said Barasch. “The increase in our census is a direct result of our intentional efforts to improve our adherence rates, which we believe are best in the industry.” 

Respiratory “surpassed expectations,” with revenue of $151 million for the quarter, an increase of 10.1% year-over-year.  

“Our oxygen census is the highest it has ever been – now over 315,000 patients,” said Clemens. 

Humana contract 

After a bumpy start in 2023, AdaptHealth says the transitioning of Humana Medicare Advantage HMO patients is “largely behind” the company, says Barasch. 

“We value our relationship with Humana and are working hard to be a good partner,” he said. “We’ve learned valuable lessons in onboarding these types of agreements and are now in a position to do more of the same.”