ProMedica’s senior care division reports fourth quarter losses of $93.1 million –
Toledo-Ohio ProMedica’s senior care division generated an operating loss of $93.1 million for the fourth quarter of 2021, compared to a divisional operating loss of $43.5 million for the fourth quarter of the prior year, the company said in a report and related call.
“The nursing home industry, in particular, has been one of the most burdened with labor costs and personnel costs,” said chief financial officer Steve Cavanaugh.
ProMedica acquired HCR ManorCare, Arden Courts and Heartland in 2018. Its senior care division provides services in 157 Medicare and Medicaid-certified skilled nursing and rehabilitation centers, palliative care in 116 markets and more than 50 memory care communities.
Skilled nursing facility occupancy increased 7.7% from a low of 67.2%, and assisted living facility occupancy increased 6.9% from a low point of 60%. Still, Cavanaugh said, risks and challenges remain in the senior care division. Labor and personnel costs are on the rise, and senior care volumes will take some time to return to pre-pandemic levels.
“Our long-term optimism for the business remains unchanged,” he said.
During the first quarter of 2021, ProMedica, Welltower and a third-party operator agreed to terms for the divestiture of a portfolio of skilled nursing facilities currently owned by Welltower and leased to ProMedica, according to the company.
“We were able to make a number of transactions that we believe will improve the long-term outlook,” Cavanaugh said.
Promedica’s senior care division divested 21 locations as of Dec. 31; they collectively lost $46 million. The company expects to sell four more facilities by the end of the first quarter. ProMedica will receive a portion of the proceeds from the sale of the joint venture with Welltower and a rent reduction in exchange for the transfer of operating rights. The senior care division also acquired nine skilled nursing facilities and four assisted living/memory care sites in 2021. According to Cavanaugh, even after reinvesting capital in the business, transactions will add net cash proceeds of approximately $40 million to the balance. sheet.