Revenue in Brookdale Senior Living’s Health Care Services segment, which includes home care and hospice, was flat compared with the second quarter but down 20% year-over-year, Brookdale President and CEO Lucinda “Cindy” Baier said Thursday on the company’s third-quarter earnings call.
Baier attributed the decline to the fact that almost 60% of the census is generated in areas that were COVID-19 hot spots during the third quarter: California, Florida and Texas.
The company estimates that the impact due to COVID-19 resulted in $15 million of lost revenue for the Health Care Services business in the third quarter, Brookdale Executive Vice President and Chief Financial Officer Steven Swain said. Home health is the largest business in the segment, he added.
“Our home health revenue stabilized mid-year and sequentially improved slightly in the third quarter,” Baier said. Brookdale expects future growth in home care, she added, because “our quality has improved to an industry-leading overall star average at 4.7 out of 5” and because as of Oct. 31, 95% of the company’s senior living communities were accepting move-ins.
“While lower occupancy in our communities affects Health Care Services census, home health inside our communities continues to perform at a strong rate,” she said. “Outside of the COVID-19 hot spot of Florida, our non-Brookdale community home health business referral growth and new case starts increased faster than prior to COVID-19 and improved relative to last year. This is an early indicator of the home health business recovery.”
Operating expenses in the company’s Health Care Services segment in the third quarter were 12% lower than they were in the third quarter of 2019 and were 3% lower than they were in the second quarter of 2020, Swain said. “We continue to see the benefits of structural changes made earlier this year and scaling operations to better match expenses to revenue,” he said.
Brookdale received approximately $6 million in grants from the Phase 1 distribution from the Coronavirus Aid, Relief, and Economic Security (CARES) Act Provider Relief Fund as other operating income in its Health Care Services segment during the third quarter, Baier said.
