4 Major Themes from Public Healthcare Firms during COVID-19 – Part 3: Volume Recovery

July 7, 2020

Contributors: Blake Madden and Savanna Dinkel

VMG Health has completed its review of healthcare Q1 earnings season, which is particularly interesting given the quarter’s insight into COVID-19’s impact on healthcare payors and providers.

In a four-part series over the coming weeks, VMG Health will be summarizing key observations and common themes regarding the following four major themes from public healthcare firms:

As the US continues to re-open, providers across all healthcare sectors are focused on volume recovery. Early indications from public firms show increasingly positive volume activity and weekly volume trends. Operators are optimistic about these early data points, but caution there are multiple factors that may impede the industry volumes’ return to pre-COVID levels.


“[The volumes] are obviously beginning to recover, but not yet to pre-COVID levels. That’s no surprise. May has been a very strong ramp up. June is even stronger.”

Ronald A. Rittenmeyer, Executive Chairman & CEO, Tenet COVID-19 Update Call (June 16, 2020)

Additionally, in the accompanying presentation to Tenet’s special call, they provided the following metrics illustrating the volume recovery of each service line:

Slide six from Tenet’s “COVID-19 Operational Impact Update” presentation (link here)

“The barriers [to get back to pre-COVID levels] that I see, if you look at overall volumes, number one in my mind is the physicians’ offices in their environments, getting back to running at full throughput … second barriers, of course, if hotspots emerge, that would slow things down in different places … and then third is the ongoing fluctuation in patient comfort.”

Saumya Sutaria, President & COO, Tenet COVID-19 Update Call

Home Health

“I still would say it’ll be a slow ramp back up throughout Q2. And then, hopefully, by Q3, if there’s no secondary spike in COVID activity or no new outbreak that would change this, that you’d probably see [volumes back to normal] by then.”

Joshua Proffitt, CFO, LHC Group presents at BofA Securities Healthcare Conference (May 12, 2020)

“… We’re at our highest point since somewhere around March 25, 26. So that’s a really good sign that at the time of the earnings call [May 8, 2020], we had seen census starting to come back up into the 76,000 range. But until you start seeing multiple weeks of a trend, you don’t really know how that’s going to settle out. But we’re seeing week-over-week gradual improvement in census.”

“…To get that kind of full acceleration that we had kind of mid-February to the beginning of March – There’s still more momentum that needs to be gained to get to true, what I would call, pre-COVID levels. But a lot of the more kind of fundamental stats like missed visits, lupus, some of those things, those are really starting to settle back in.”

Joshua Proffitt, CFO, LHC Group presents at UBS Virtual Global Healthcare Conference (May 18, 2020)

Outpatient Care

“So I would say my outlook is very, very positive. The timing is hard to know because of consumer behavior. We know that there’s a pent-up — backlog of patients that we’re going to be scheduling. We don’t know how fast new patients will return, although early signs are very positive.”

J. Eric Evans, CEO & Director, Surgery Partners Q1 2020 Earnings Call

“For what it’s worth, we’re only one month, in the month of May, at this point, halfway through when states are opening, but we are seeing volumes move up faster than we had anticipated. And in states that have been open for over a week or so, we’ve had a few of these already, where they’re already getting to our original run rate budget. So early indications would say, behaviors would say, people are going to go get these procedures done if they can get them done.”

Wayne Scott DeVeydt, Executive Chairman, Surgery Partners Q1 2020 Earnings Call

“The first half of June, [USPI’s] recovery is quite robust. I will tell you that the surgical care environment, especially the higher acuity work, has come back very nicely. In particular, the remaining gap to prior year really is more of the lower acuity preventative type work that goes on in the ASC environment.”

Saumya Sutaria, President & COO, Tenet COVID-19 Update Call

Post-Acute Care

“We believe here in the back half of the year that the increase from elective surgeries and the fact that May patients who would have been eligible for post-acute care, both on an inpatient basis and home-based care, chose not to receive it here during the height of the pandemic is going to lead to increased volumes in the back half of the year.”

Douglas E. Coltharp, Executive VP & CFO, Encompass Health Corporation presents at Jefferies Global Healthcare Conference 2020 (June 3, 2020)

“The good news is that since reaching a low point with regard to volume in all three of our business lines in the middle part of April, we’ve seen a steady climb and now are at or above pre-COVID-19 level.”

Douglas E. Coltharp, Executive VP & CFO, Encompass Health Corporation presents at BMO 2020 Prescriptions for Success Healthcare Conference (June 23, 2020)


“I’m very happy to say that our volumes have materially improved over the past several weeks, whereby our procedural volumes are down on a blended East and West Coast basis, about 40% as of today [May 11, 2020]. We expect this to improve as stay-at-home orders are lifted.”

“Our projections for the balance of this quarter and the third quarter shows some relatively conservative ramping up of patient volumes and revenue. And that by the fourth quarter, we hope to not be all the way back, but certainly well on the way that we are approaching our more expected volumes.”

Howard G. Berger, CEO, RadNet, Inc. Q1 2020 earnings call

Behavioral Health

“On the behavioral side of the business, I think behavioral census, patient days are back to, again, I’m going to say mid-90s, 92% to 95% of pre-COVID levels … And so I think just naturally, those behavioral volumes are returning to a more normalized level because these are people who, I think, really need care and then have not been getting it fully over the last several months.”

Steve G. Filton Executive VP, CFO, & Secretary, Universal Health Services presents at BMO 2020 Prescriptions for Success Healthcare Conference (June 23, 2020)

Wrap-Up Conclusion

As observed above, healthcare providers are beginning to travel along the road to recovery. Positive reports from late May and June show volume improvement across multiple sectors. As expected, different markets and sectors are experiencing the return of volumes at varying rates. Localities and providers hit hard by COVID are experiencing a longer road to recovery, while markets and operators with limited exposure may already be servicing volumes near pre-COVID levels. As the US continues to re-open, providers are closely watching weekly volume trends to help drive decisions regarding operation ramp-up and cost consumption. As cautioned by many executives, these positive trends have the potential to be curtailed by a second surge or late wave of COVID cases which may delay recovery.