What is average daily census (ADC), and why it drives hospice value
Average daily census is the patients a hospice serves on an average day. In a per-diem business, ADC is most of the revenue line, which is why it is the first number a hospice buyer asks for.
Definition
Average daily census is the number of patients a hospice has on service on a typical day.
- Patient-days in a period / days in that period = ADC
In a per-diem business, particularly one with a single primary payer (Medicare), the census is the number that drives revenue, which is why it is the first number a hospice buyer asks for.
ADC defined
Average daily census, or ADC, counts the patients enrolled and receiving care on an average day over a period. Add up the patient-days across a month or a year and divide by the number of days, and the result is ADC. A hospice with 43 patients on service on a typical day runs an ADC of 43, whether those are the same 43 people all year or a changing roster as patients enroll, are discharged, or pass away.
It is a stock measure, not a flow. ADC captures how many patients a hospice is carrying at once, not how many it admitted over the year. Two hospices can admit very different numbers of patients and still run the same ADC if their patients stay for different lengths of time.
In the cost-report data, the median hospice runs an ADC of about 43, with the middle half between 21 and 89. That range, a fourfold span from the lower to the upper quartile, is most of what separates a small local hospice from a scaled regional one.
The per-diem link: why ADC is the revenue line
Hospice is paid a flat daily rate for each patient on service, so revenue is close to ADC multiplied by the per-diem rate and the days in the year. The arithmetic is direct.
Census rebuilds the top line
- Median ADC — 42.7 ×
- Revenue per day — $200.50 ×
- Days — 365 =
- Annual revenue — $3.12M
- Sector median revenue — $3.12M (the two reconcile)
The median hospice runs an ADC of about 43 at roughly $200 in revenue per day of care, which works out to about $3.1 million a year, which is also the sector's median revenue. Census times rate times days rebuilds the top line.
That is what makes ADC different from occupancy in skilled nursing or visits in home health. Occupancy is bounded by a fixed bed count, and visit volume depends on referrals and staffing capacity per episode. ADC has no ceiling built into a building. A hospice grows its census by adding referral sources and clinical staff, and each additional patient-day earns the per-diem at almost pure contribution margin once the fixed overhead is covered.
How ADC scales value
Because revenue tracks census so closely, ADC is the growth lever a buyer underwrites. Doubling ADC roughly doubles revenue, and it does more than that to margin. A hospice's administrative, compliance, and on-call costs are largely fixed, so spreading them over 200 patients instead of 20 lifts the margin as census climbs. That is why small hospices run fragile and scaled ones run profitably, and why census growth, not rate, is the story in almost every hospice deal.
It also explains the acquisition math. A buyer pays for current ADC and underwrites the census it can add through its own referral relationships and back-office scale. A 40-census hospice folded into a platform that can lift it to 120 is worth more to that platform than its standalone numbers suggest, which is the logic behind the sector's steady roll-up. For how those economics and multiples play out, see hospice economics and the hospice M&A breakdown.
Census quality matters as much as its level. Read ADC alongside length-of-stay mix and payer profile, not on its own.
One caution before reading ADC too simply. A high census built on long lengths of stay carries aggregate-cap and compliance exposure.
Sources and method
- Source — CMS HCRIS provider cost reports, FY2024 and FY2025 filings
- Analysis set — 3,956 hospice facility-level filings after dropping consolidated filings and margin-plausibility outliers
- Figures — Median ADC 42.7 (middle half 21 to 89); median revenue per day of care $200.50; median revenue $3,122,766
- Worked example — 42.7 × $200.50 × 365 reconciles with the sector median revenue; the arithmetic is illustrative, since ADC and per-diem are medians rather than one facility
Disclaimer
This article is a market-data benchmarking resource derived from publicly available Medicare cost reports. It does not provide, and must not be relied upon as, a fair market value determination, valuation opinion, appraisal, or legal, tax, or compliance advice. Cost-report figures are self-reported, unaudited, and subject to revision. The opinion of value for any specific arrangement remains the professional judgment of a qualified appraiser.