Thank you, operator, and welcome everyone to our first quarter of 2021 earnings call.
Joining me on this evening's call is Brent Moen, our Chief Financial Officer.
Let me provide you with a brief outline of what we intend to cover this evening. I'll start by discussing our first quarter sales performance and business trends followed by a discussion of our recent operational highlights. Brent will review our financial results in detail as well as our 2021 financial guidance, which we reaffirmed in our earnings release this afternoon. I'll close with some additional thoughts on our assumptions, outlook and key areas of focus for 2021 before we open the call for questions. With that, let's get started. We were pleased to deliver sales performance that modestly exceeded our expectations for the first quarter of 2021.
Specifically, we saw first quarter total revenue decreased by 2% year-over-year to $42.8 million compared to the mid single-digit year-over-year decline we had anticipated at the time of our earnings call in February. The 2% decrease in total revenue was driven by sales and rentals of our Flexitouch systems, which decreased 3% year-over-year, partially offset by sales and rentals of our Entre systems, which grew 5% year-over-year.
Turning to a more detailed discussion of the first quarter.
We continued to face a series of COVID-related headwinds throughout the quarter. These headwinds and their impact were consistent with our expectations and largely represented a continuation of the dynamics we saw in Q4. In early January, we conducted a survey of our top accounts, which found that only a quarter were operating without restrictions, which was consistent with the results of our survey in October. A follow-up survey in early April of this year found that this ratio had slightly improved to just under 30% of surveyed accounts operating without restrictions. These health and safety protocols continued to impact our performance in two primary ways.
First, the treatment capacity of many of the clinics that we serve remained constrained due to lower patient throughput as clinics continued to operate with fewer exam rooms, dedicate more time to cleaning and room turnover, leading to longer gaps between patient consultations.
Specifically, our surveys in January and April found that two-thirds of our top accounts reported they were still operating at less than 80% of normal levels. And second, many clinics continued to restrict sales rep access to their patients, which limited our ability to conduct in-person patient demos at the clinic, an important part of the patient engagement.
During the first half of the quarter, we also continued to see impact from the spike in COVID cases around the winter holidays and its effect on facilities, clinicians, patients, and our own field teams.
Specifically, our accounts continued to experience an uptick in COVID-related patient cancellations and employee absenteeism in the first two months of the year.
We also saw absenteeism in our own sales force due to quarantining in compliance with our corporate safety policies.
As COVID cases declined from the highs of December and January, we were pleased to see conditions begin to moderate, and we ultimately achieved sales performance in March that showed evidence of recovery.
In terms of the trends across our customer base, throughout the first quarter, privately owned practices based in the outpatient settings continued to demonstrate higher resiliency and faster recovery trends. Vascular clinics specifically remained a key contributor to our performance.
Our focus on targeting vascular clinics has been an important contributor to the strong growth in Entre system sales. With our expanding universe of Entre patients, we are also well positioned to serve those that may ultimately require an advanced therapeutic device like our Flexitouch Plus. Meanwhile, sales to practices based within hospitals and health systems continued to lag as these practices remain more constrained by COVID-related restrictions. The VA in particular remained especially challenged by these restrictions and during the first quarter, we continued to see lymphedema patients redirected from the 170 VA hospital centers to the more than 700 community-based outpatient clinics. VA sales tend to be an important contributor to our total revenue in the first quarter of each year due to the typical seasonality we experienced related to the resetting of annual deductibles for patients covered under commercial insurance plans.
With these challenges as a backdrop, our VA revenue declined 17% year-over-year to $5.8 million, adding a particular drag on the quarter, yielding just 14% of our total revenue compared to 16% in the first quarter of last year.
Given this performance in the VA and the continued challenges related to COVID, the fact that we only saw a 2% year-over-year decrease in our total revenue for the quarter speaks to the dedicated efforts of our team and the tailwinds from our expanded base of prescribers, which helped to offset some of the most notable impacts of the pandemic.
In terms of our patient-focused activities, our sales reps continue to conduct a portion of patient demos virtually where appropriate due to clinic restrictions.
We also continue to enhance our virtual out-of-the-box alternatives to in-person patient training. These expanded options are earning high patient satisfaction scores with patients equally likely to recommend our system regardless of which training option they utilize. Approximately 40% of our new patients were trained in-person during the first quarter. And while it remains to be seen where the mix of in-person trainings will shakeout longer-term, we are poised to provide a menu of well-structured options.
In terms of our medical education efforts, our teams continue to organize events virtually, which were developed to engage and inform a variety of target audiences. We hosted 31 events during the first quarter, in collaboration with many KOLs in the treatment of lymphedema and related conditions, and these events were attended by approximately 1,200 clinicians and staff. Most notably, we co-sponsored and presented at the POWER Lymphatics Symposium, which was held virtually and attended by over 650 therapists.
We also participated in the virtually hosted American Venous Forum's Annual Congress.
In addition to their primary purpose of helping us raise awareness and educate the market on the diagnosis and treatment of lymphedema, these events continued to serve as a valuable resource for our sales reps to build relationships with potential new prescribers.
As a result, given the strong interest that we've seen in our virtual events over the last 12 months, we continue to see success in our efforts to expand our prescriber base during the quarter. In summary, while the COVID-related headwinds remained largely consistent with our expectations, we were pleased by the resourcefulness of our team and their efforts to lay the foundation for our future growth by expanding our prescriber base.
As Brent will discuss further, I am also pleased we were able to maintain our 70%-plus gross margins along with the modest year-over-year improvements in our operating income and adjusted EBITDA, despite experiencing a slight decline in total revenue. And lastly, we complimented our financial performance with some important operational highlights, which I'd like to briefly recap.
First, we continued to invest to expand the productivity of our commercial team. Consistent with our stated strategy, we expanded sales territories by promoting a portion of our existing associate product specialists.
We also grew our commercial field team of both sales and support personnel to over 295 members, including field support specialists to help our product specialists dedicate more of their time to engaging new physicians. And second, we continued to strengthen our leadership by adding top talent to help lead our continued market development efforts as we scale into the future.
In addition to expanding our Board of Directors with the appointment of Sheri Dodd and Deepti Jain, whom we discussed on our fourth quarter call, we added three important new members to our senior leadership team. In January, we appointed Mickey Brown as our new Vice President of Payer Relations and Market Access, following the retirement of Maggie Thompson. In March, we appointed Kristie Burns as our new Senior Vice President of Marketing and Clinical Affairs, following the promotion of Darren Wennen. And earlier this month, we appointed Eric Pauls as our new Senior Vice President of Sales, following the retirement of Bryan Rishe. Mickey, Kristie and Eric each bring over 20 years of experience in the healthcare industry. Mickey was previously the Vice President of Reimbursement at Wright Medical, and his career highlights include five years at Cochlear, where he served as Vice President of Health Economics, nine years at Medtronic, where he was the Director of Health Policy and Reimbursement for their Spinal and Biologics business and experience from the Payer side, including Blue Cross Blue Shield. Kristie and Eric's backgrounds both include significant experience commercializing wearable, medical technologies for the treatment of chronic conditions at home. Kristie joins us from a prior career at Cala Health, where she led the U.S. commercial introduction of its lead product, a wearable neuromodulation device for the treatment of essential tremor. She also spent 13 years at ResMed, where she helped develop the market within the obstructive sleep apnea space. And Eric spent the past 19 years at Philips, where he most recently led a 500 person commercial team within their Sleep and Respiratory segment.
While there, Eric also managed the integration and operations of RespirTech, a Philips acquisition with a similar business model to our own, that markets a wearable garment to treat chronic respiratory conditions in the home. Mickey, Kristie and Eric possess the leadership skills and vision to help us develop the lymphedema market, scale our business, and ultimately deliver healthy long-term growth. And I am excited to have them on our team. With that, let me turn it over to Brent to discuss our quarterly financial results in greater detail and review our guidance for 2021. Brent?