Some hospice providers saw a drop in admissions as a result of disruptions in the larger health care space during the coronavirus pandemic, but expect to see numbers trend upwards as the system stabilizes.
Hospice admissions throughout the nation have been impacted by the pandemic’s upheaval effects, particularly among hospitals that were strained to their limits. Several areas of the health care system experienced disruptions in providing routine services as they shifted their focus towards their response to the outbreak. Many patients also decided to forego or delay some treatments as states began to implement stay-at-home orders and restrictive social distancing measures in March..
“Majority of VITAS’s admissions are from hospitals and medical discharge planners,” said Kevin McNamara, president and CEO of Chemed Corp. (NYSE: CHE) at the Jeffries Virtual Healthcare Conference. Chemed is the parent company of hospice provider VITAS Healthcare. “Hospitals did not have their normal groupings of patients. We have seen that affect operations a little bit. Many times these patients are coming from [intensive care units (ICU)], they’re the sickest patients who really need immediately a high-tech professional hospice. COVID-19 patients were staying in the hospital and dying, they were never going into hospice. [Hospitals] are a significant element and part of VITAS’ patient flow. The flow of patients has been knocked out of kilter.”
Like many hospice providers, VITAS Healthcare saw a drop in patient admissions during Q1 of 2020 as the outbreak picked up steam. Referral partners were more focused on preventing spread of the virus and keeping their heads above water as they contended with a sometimes massive influx of patients in some regions. These factors in turn affected hospice utilization as non-COVID patients were seen less frequently.
“When we entered into the pandemic, we had well over 19,000 patients reported as our average daily census in the first quarter,” said Nick Westfall, president and CEO of VITAS Healthcare, at the conference. “Admission flow absolutely was disrupted. Patients with chronic conditions or advanced illness that typically would traverse the health care system, whether that’s a visit inside of the hospital, whether that’s a routine or acute visit to a physician, office, etc., within the health care system — that’s being disrupted. Patients with chronic conditions or advanced illness that typically would traverse the health care system are being disrupted. Hospital systems went down to 40% or 30% bed capacity exclusively focused on caring and preparing for active COVID patients. Even a minor disruption to extreme short-stay acute patients will have an impact for all providers.”
Despite the Q1 downturn, hospice admissions are expected to tick back up as states gradually reduce restrictions and providers across the health care spectrum adapt to a “new normal.” One strategy VITAS Healthcare will be employing is strengthening existing relationships with referring physicians and health care providers while seeking new partnerships as 2020 continues.
“As an organization, we’ve been very much focused on not only supporting our existing relationships with our health care partners and referral systems in the markets in which we serve,” Westfall stated, “But also reaching out to those that we may not have been serving, for whatever reason, pre-pandemic to help educate around the agility and comprehensiveness that we believe we can provide as a hospice provider in this new normal because of the fact that we’re able to cohesively provide all levels of care, leverage a variety of different solutions to help be a partner to whatever their new care needs and discharge needs are going to look like. Time will tell to see if we’re also able to make headway in forming new relationships that didn’t exist pre-pandemic because of the need of those health care providers in the community.”
VITAS Healthcare anticipates a rise in patient care days into the second quarter as it rides out the storm. The company expects that the drop in hospice admissions will be short term, with recovery on the immediate horizon.
Despite uncertainty flooding the hospice market due to the unpredictability of the pandemic’s trajectory, admission rates are beginning to slowly climb. As with many hospice providers, VITAS Healthcare remains positive as they look ahead for 2020 and 2021.
“We aren’t resistant to a disruption in our referral stream on the VITAS side, but our debt structure is such that we’re well-positioned to ride out anything,” said David Williams, vice president and CFO of Chemed Corp. “We are all guessing as to when we will return to a normal economy and a normal occupancy in the hospital and health care infrastructure, but at this point we would expect 2021 to be something above our 2020 guidance that we provided initially before the pandemic. Right now, it’s business as usual, just recognizing where it’s harder to search for our patients.”