InnovAge Holding Corp. (NASDAQ:INNV) Q1 2024 Earnings Call Transcript

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Operator: [Operator Instructions] Our next question comes from the line of Matt Larew with William Blair.

Madeline Mollman: This is actually Madeline on for Matt. Kind of following up on the patient acuity question. I know one of the things that you are anticipating once sort of the sanctions were lifted, was that the pace and acuity mix would normalize a little bit because you were able to enroll new patients. Can you talk a little bit about like what you’re seeing in terms of new enrollee patient acuity and how that mix might have changed now that you’ve had a couple of months of being able to enroll patients?

Patrick Blair: Sure. I’ll start again and have Rich filling gaps. The first thing I would say is that the sort of the mix issue is obviously very dependent on the rate of growth of our new enrollment and the progression of our existing patient base and discipline, frankly, that’s attributable to death. So all those factors come kind of play into the risk pool changing. What I would say is, if I think about the mix of new participants, again, still early because it’s there was a bit of a ramp in Colorado, in particular. But I think one of the things we’re starting to see is fewer people enrolling with us that are in an assisted living facility. Pace is a great solution for people, and that’s an important lever for us to avoid nursing facility care.

And I think historically, we maybe saw a little bit higher levels assisted living facility enrollments. I think we’re starting to see some of that, let’s call it, backlog, pent-up demand, maybe starting to play through. So our mix is increasingly looking more and more what we would expect a community mix to look like between people in nursing homes, people in assisted living and people who are coming to us living independently. So still early, but seeing some good signs that, again, the work that Rich is leading is having an impact. And our high-performing network is another great example of making sure we’re providing all the access that’s necessary for this.

Dr. Rich Feifer: Well, yes, exactly, as Patrick said, we are seeing lower acuity people being enrolled than our existing population by definition because these are people who are living either independently or in assisted living. Now we have had and seen a backlog of interested people, people wanting to enroll an innovate pace who were living in assisted living in Colorado. And as that backlog work to sell out, we’re seeing much higher rates of true independent living, and so our acuity and our mix will become even more favorable over time.

Madeline Mollman: Got it. That’s really helpful. And then just one more on the de novos. With the Florida de novos maybe being pushed back a little bit. Is that changing how you’re thinking about this full year de novo losses?

Patrick Blair: Yes. I mean the for facilities, if they’re going to get pushed back or get pushed back by a relatively small amount of time, these are things where we might move it back by 4 weeks or 8 weeks. What you find is that, we have de novo losses associated with those facilities. To the extent that those get pushed back, the de novo losses are decreased slightly for the course of the year. At this point, I think we’re sticking with the guidance that we’ve got related to de novo losses. But as we get towards February, where we hope we’re going to have an Investor Day, we’ll know a lot more about the business, we’ll know a lot more, but timing of floor facilities. And to the extent there are any update to be given then we’ll give them that.

Dr. Rich Feifer: Yes I would just add one last point on that is, obviously, we’re timing our hiring and being very agile and being absolutely certain that we ensure we don’t assume any cost any earlier than is absolutely necessary. So we’re managing this very well.

Operator: Thank you. This concludes today’s conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.

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