Like many other nursing home operators, Diversicare Healthcare Services (OTC: DVCR) hasn’t been able to access sufficient COVID-19 testing supplies for all of its workers and residents.
But among those who have tested positive, more than half displayed no symptoms at the time, a fact that the company says underscores the dire need for more tests in long-term care.
“The inability to test the entire population of a center severely inhibits the center’s ability to care for its patients and best protect its team members,” the company noted in its first quarter 2020 earnings release. “We are optimistic that we will be prioritized for future testing availability.”
COVID-19 threw a monkey wrench in what was supposed to be a turnaround quarter for the Brentwood, Tenn.-based Diversicare, which had recently completed a planned exit of the Kentucky marketplace and settled a long-simmering federal investigation into its therapy practices.
January and February brought strong results, according to CEO Jay McKnight, and even with COVID-related census declines and increased expenses in subsequent months, the company logged its best first quarter results “for some time.”
The company lost $500,000 in the first three months of 2020, compared with a $1.6 million loss in the first quarter of 2019, along with a $2 million gain in EBITA.
Those census declines — including a 7% drop in April — were the result of multiple factors, including the suspension of elective surgeries, a decline in admissions from the community, and hospitals working to retain residents longer amid similar occupancy drops within their walls.
“Until we start to see some vast improvement in the economy, it’s hard to say when we’re going to see our admissions come back to where they have been in the past,” McKnight said on a Thursday afternoon earnings call.
The company has seen 72 deaths of COVID-positive residents across its 62 facilities, though Diveriscare also noted that because of Centers for Disease Control & Prevention (CDC) rules for logging causes of death, it cannot be certain whether COVID was the primary driver in each case.
“Our patients are elderly, frail, and often have co-morbidities. Many of these patients may also be receiving end-of-life palliative care,” the company stated. “It is very difficult, if not impossible, in many cases to accurately determine that COVID-19 was the cause of death for many of our patients who passed away after testing positive.”
Diversicare has seen some bright spots amid the COVID-19 pandemic, including a temporary $20 per-patient-day Medicaid payment boost in Alabama — the state where it operates the greatest concentration of buildings — and federal stimulus funding totaling $9 million.
McKnight also praised the work of the company’s frontline caregivers.
“They have worked tirelessly to care for the most vulnerable members of our society while taking the personal risk of exposing themselves and their families to COVID-19,” he said. “Many of our team members have traveled to other centers or even other states to assist with hot spots at our affected centers. It is an absolute privilege to be able to lead this team, and I am so proud of their response to this unprecedented challenge we are facing.”
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