Disruption in the senior living market stemming from the COVID-19 pandemic continues to adversely affect VITAS Healthcare, a subsidiary of Chemed Corp. (NYSE: CHEM). Senior living occupancy remains lower than historical levels, though widespread vaccination is inching the sector towards recovery.
Senior housing, assisted living and similar facilities have long been a significant source of referrals for VITAS. That stream of referrals has diminished during the pandemic. This in turn has a negative impact on length of stay. Patients in facilities tend to receive referrals earlier in the course of their illnesses and receive hospice care longer.
“The most significant issue remaining from the pandemic is the disruption to senior housing occupancy and the related hospice referrals,” Chemed CEO Kevin McNamara said during a second quarter earnings call. “Recent admissions data suggests senior housing as entered into the early stages of recovery, and our updated guidance anticipates steady improvement in senior housing-referred hospice admissions.”
Senior housing occupancy reached a record-low of 78.7% in Q2 2021, Hospice News’ sister site Senior Housing News reported. That figure remains unchanged from the first quarter of the year. Nevertheless, signs indicate that demand in that space is rising. The number of units leased on a new basis was positive in Q2 for the first time since the first quarter of 2020.
The occupancy rates remain low because of the large number of facilities being constructed. About 4,300 new senior housing units appeared during the second quarter in 31 primary markets, compared to 5,100 in Q1, according to Senior Housing News.
VITAS saw net patient revenues of $312 million during the second quarter, down 4.7% from the prior year’s period. The company’s average daily census fell 6.3% to 17,995, though admissions remained level at 16,840.
For the first time since the onset of the pandemic, admissions exceeded discharges during the second quarter by 315 patients.
“This decline in average daily census is a direct result of pandemic-related disruptions across the entire health care system. This negatively impacted traditional hospice admission patterns starting in March of 2020,” VITAS CEO Nick Westfall said in the earnings call. “Our hospital-generated admissions have largely normalized to pre- pandemic levels. Referrals from senior housing, nursing homes and assisted living facilities continue to be disrupted.”
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