ProMedica saw improvement in its HCR ManorCare nursing home business line during the first quarter of 2020, though the ongoing impact of the COVID-19 pandemic remains a long-term unknown for the health system.
The Toledo, Ohio-based ProMedica pulled in $17.1 million in income associated with its ManorCare business to start 2020, according to its most recent report to bondholders.
That’s compared to $7.7 million in the first three months of 2019, a gain that ProMedica attributed primarily to proceeds from the sale of three ManorCare facilities for $67 million; that transaction wasinitially announced in February.
The Toledo Blade first reported on ProMedica’s first-quarter financial results this week.
ProMedica and fellow Toledo-based company Welltower (NYSE: WELL) acquired ManorCare in a complex joint venture back in 2018, with the health system buying the operations outright and entering into a 20-80 partnership with the REIT to purchase the real estate.
Combined with ProMedica’s home health and hospice business lines, the ManorCare assets helped the system log income of $27.5 million in its senior care division, up $9.5 million from the year-ago quarter — and representing a plurality of the system’s overall revenue.
ManorCare’s rent obligations to the joint venture totaled $53.5 million during the first quarter of this year, mostly in line with the previous year’s quarterly total of $53.8 million.
Like many other health care providers and investors, ProMedica emphasized that COVID-19’s eventual impact will be both negative and far-reaching.
“The large-scale COVID-19 pandemic will have adverse effects on current and future patient volumes and diversion of patients, as well as staffing shortages and overall operations over an extended time period,” the non-profit noted. “While it is not yet possible to estimate the full financial impact, the COVID-19 pandemic could have an adverse effect on the System’s revenue, liquidity and operating results.”
ProMedica so far has landed a total of $158 million in federal support under the CARES Act stimulus package, $89 million of which went to its senior care division. The non-profit also received extensions on some of its debt obligations, deferred payroll taxes, froze non-essential hiring and spending, and temporarily furloughed 900 employees — mostly from acute-care settings that were temporarily shut down amid bans on the provision of non-essential care.
“The system is adapting its business practices to address the new operating environment and taking steps to conserve cash and maximize liquidity,” the company noted.
Executives at Welltower were tentatively optimistic when discussing ProMedica’s operations during the real estate investment trust’s (REIT) first-quarter earnings call earlier this month.
“I will tell you that ProMedica is in fine shape,” Welltower chief operating officer and chief investment officer Shankh Mitra said, emphasizing that the business line was “very, very low” on his list of COVID-19 concerns.