ProMedica Lays Off 100, Cuts 60 More Jobs One Month After ManorCare Acquisition

Less than a month after completing its acquisition of skilled nursing giant HCR ManorCare, ProMedica Health System this week laid off 100 employees and cut 60 unfilled positions.

The Toledo Blade first reported the news.

The majority of the layoffs consisted of employees “in leadership roles and corporate functions,” according to a statement provided to SNN from Karen Strauss, ProMedica’s chief human resource officer. The 60 additional jobs were “non-direct patient care positions” that had already been vacant, but which the Toledo, Ohio-based health care provider will now decline to fill.


The company did not provide more detail on the specific positions cut in order to protect the privacy of the individual employees, a spokesperson told SNN.

ProMedica rocketed into the top 15 largest non-profit health systems last month through its acquisition of the struggling ManorCare chain, which had recently entered bankruptcy after an extended conflict with its former landlord, Quality Care Properties. Toledo-based real estate investment trust (REIT) Welltower Inc. (NYSE: WELL) joined forced with ProMedica to buy QCP’s assets in an 80-20 joint venture, with ProMedica separately picking up ManorCare’s operations. All in, the deal was valued at $4.4 billion, with ProMedica laying out $524 million in cash and $1.15 billion from a bridge loan.

The round of layoffs did not involve ManorCare positions, a spokesperson told the Blade.


“While we recently partnered with HCR ManorCare and expect the partnership to bring opportunities for growth and synergy, we still must address pre-merger ProMedica financial issues now,” Strauss said in the statement.

Leaders at both ProMedica and Welltower have promoted the deal as a revolutionary step toward building a vertical care continuum, in which ProMedica’s hospitals will potentially serve as feeders for ManorCare’s skilled nursing facilities.

“We are focused on tearing down the walls between care delivery channels to provide simpler navigation across the care continuum, along with greater value,” ProMedica CEO Randy Oostra said in a statement when the transaction closed. “Further, we see a tremendous opportunity to engage ProMedica’s nationally recognized, social determinants of health work to benefit seniors across the communities we serve.”

But in the wake of the deal, ProMedica has seen its credit rating downgraded by Standard and Poor’s, which expressed concern about the overall long-term health of the skilled nursing industry.

“HCR ManorCare provides post-acute care services — an industry that has experienced significant operating pressures, particularly about reimbursement and occupancy, in recent years,” the ratings agency wrote.

ProMedica’s statement regarding the layoffs hinted at some of these bigger-picture health care pressures.

“The health care industry continues to face a series of challenges, including decreasing reimbursement rates for services and rising operational costs,” Strauss said. “To adapt, health systems around the country have had to make tough financial decisions.”

Written by Alex Spanko

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