“Green shoots in the trend of elective procedures” are providing the momentum to return the home healthcare business to near pre-pandemic levels by the second half of this year, Encompass Health CEO Mark Tarr said Tuesday. He made his predictions during the UBS Global Healthcare Conference.

Mark Tarr, Encompass Health

“You still have COVID protocols in place in a number of the surgical suites which slow down the amount of volume that they can do from a surgery standpoint. But we are starting to see — and it’s more anecdotal — our sales and marketing people coming back and telling us the surgery schedules are increasing and the schedules are picking up,” Tarr said.

At the beginning of the pandemic, surgeons began postponing and eliminating elective surgeries based on recommendations from the Centers for Disease Control and Prevention to prevent the spread of COVID-19 and free up hospital beds. A 2020 study by the Journal of Bone and Joint Surgery estimated a million orthopedic procedures were postponed last year alone, creating a backlog that would stretch at least two years.

Tarr said Birmingham, AL-based Encompass is beginning to see patients who have undergone joint replacement procedures being referred to home health from acute care hospitals.

Still, referrals from nursing homes and assisted living facilities, which account for nearly 20% of Encompass’s home health care business, continue to lag.

“For a while we didn’t even have access to get into those facilities to get referrals, but now we’re getting access,” Tarr said. “We still need census to pick back up in the skilled nursing and assisted living facilities, but it’s still a bit slow compared to what we’ve seen in elective surgery procedures.”

In its most recent survey, the National Investment Center for Seniors Housing and Care found skilled nursing occupancy still remained 13.7% below pre-pandemic levels.

While Tarr said Encompass Health is filling the void from nursing home referrals with referrals from new sources, such as physician practices and surgery centers, he was confident referrals from skilled nursing would return to normal later this year or next.

Encompass Health operates rehabilitation centers, home healthcare and hospice businesses in 39 states and Puerto Rico.

In late April, Encompass Health reported first quarter revenues of $1.2 billion, an increase of 4.1% compared to the same period in 2020. The company offered an improved outlook for the remainder of the year, forecasting revenues between $5.06 and $5.3 billion.

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