OM discusses ‘complicated quarter,’ fastest growing products

RICHMOND, Va. – Owens & Minor’s Patient Direct segment saw “minimal impact” on its top line growth from the Change Healthcare cyberattack, but it did see more of an impact on receivables, say company execs. 

On a recent call to discuss its earnings for the first quarter 2024, Edward Pesicka, president & CEO, said the company was still working to clear up backlogs. 

“We were not immune from the impact; however, we are currently working with Change Healthcare to ensure we capture the associated revenue and receive full payment for all services and products rendered,” he said. “I am also very proud of our response to this issue to mitigate the impact and even more pleased with our ability to successfully limit the potential disruption of our customers’ ability to receive the lifesaving products and supplies they need every day.” 

The cyberattack, reported in February, came during the “most complicated, labor-intensive quarter of the year,” with many patients changing payers and other factors. 

It also slowed Patient Direct’s ability to onboard new patients or verify new eligibilities of existing patients, execs say. 

“That had an impact on cash flow and on receivables, but as we get through Q2, we expect most of that to work its way through the system,” said Pesicka. 

Patient Direct’s revenue was $638 million, up 5% compared to the first quarter of 2023, and was in line with the company’s expectations. 

“We knew Q1 was going to be a little tough because if you look at it, you know we're coming out of the last two years in Q1 (where that) business grew at double digits, so we're coming off of some strong growth,” said Pesicka. “But we're adding resources, we're doing what we need to do to deliver on that long term target and we remain extremely excited about the space.” 

In particular, OM remains focused on both its sleep and diabetes lines, execs say. The company’s operating model realignment, launched in March 2023, will help deliver future growth in those categories. 

“Sleep continues to be strong for us and it’s that one, along with diabetes, that are still our two fastest growing categories,” said Pesicka. “We anticipate that to continue. Some of the work we're doing with the operating model realignment is specifically around sleep, I think that's important to make sure we understand the sleep journey better so that way we can continue to drive strong growth in the future."