AdaptHealth (AHCO) Stifel 2024 Healthcare Conference summary

Leadership transition and organizational focus

• New CEO prioritized fixing integration issues and establishing clear governance and metrics.

• Leadership team nearly finalized, with new COO and Chief Medical and Strategy Officer in place; Chief Commercial Officer announcement imminent.

• Introduced segment reporting and general managers for four business segments to drive performance.

• Emphasis on operational hygiene, standardization, and a five-point plan to unify the organization and pause large M&A in favor of organic growth.

• Automation and AI implementation underway to streamline basic processes.

Strategic priorities and operational improvements

• Focus for 2025 is on execution, patient experience, and exceptional service, with growth initiatives planned for late 2025 and 2026.

• Sleep and respiratory segments performing well, with sleep representing 40% of revenue and strong patient demand.

• Wellness at Home and supplies business require further improvement.

• Diabetes segment identified as the most significant challenge, with internal operational issues being addressed.

• Sales force expansion in diabetes did not yield expected growth; operational fixes prioritized before further sales efforts.

Segment performance and market dynamics

• Sleep business up 3.5% in Q3, with over 120,000 new patients and record resupply census; two-year growth nearly 10%.

• Group setups and virtual fitting have improved efficiency and patient preference.

• Conversion rates under review, with process simplification and standardization underway to boost growth.

• Sleep resupply team integrated with diabetes resupply to leverage best practices and drive quick operational fixes.