The post-acute and long-term care landscape has seen admissions dry up during the COVID-19 pandemic, and ProMedica was no exception.
The Toledo, Ohio-based health system, which operates skilled nursing facilities and senior living properties under the ProMedica Senior Care brand, saw patient service revenue across its senior portfolio decline by $385.4 million in 2020 from the prior year, according to a quarterly report issued last week.
The Senior Care division logged a fourth-quarter 2020 operating loss of $43.5 million, compared to income of $16.4 million over the same span in 2019. Operating income for the year was $41 million, down from $74 million the year before.
ProMedica blamed the drops primarily on occupancy declines; census at the non-profit’s skilled nursing facilities sat at 73% as of December 31, compared to 85% in 2019. The company received substantial federal support across its operating divisions, but it wasn’t enough to completely wipe out the financial strains.
“The $236.7 million of CARES Act and other government stimulus funding recorded in other revenue partially offset the negative impact of lost patient service revenue and increased costs,” ProMedica observed.
The occupancy drop mirrors a shift seen across the country as seniors delayed non-essential surgeries and increasingly opted for home-based post-acute care due to coronavirus fears, as well as the specter of ongoing visitation restrictions.
The nation’s nursing homes were about 69% full at the end of January according to an analysis from professional services firm CliftonLarsonAllen; that figure actually represents a slight increase from the start of the month, prompting CLA to speculate that nursing home occupancy may be bouncing along the bottom as the ongoing vaccine rollout brings substantial drops in case counts.
Despite a return to normal patient volumes in ProMedica’s Provider division, which includes hospitals and ambulatory care centers, the system was more cautious about the outlook for its senior care portfolio.
“Senior Care division recovery is ongoing and is expected to take longer due to industry-wide COVID-related admission volume declines coupled with elevated expense levels,” the company observed. “While it is not possible to estimate the duration or full financial impact of the pandemic, management expects some adverse effects on operations to continue into the first half of 2021.”
ProMedica last week announced a pair of moves made in conjunction with Welltower Inc. (NYSE: WELL), its joint-venture partner in the ownership of the real estate associated with ProMedica Senior Care — formerly the for-profit HCR ManorCare chain.
The JV will offload 25 “non-strategic” nursing facilities acquired during the original 2018 ManorCare deal, while also picking up nine high-end rehab facilities — previously operated under the PowerBack brand — from Genesis HealthCare (NYSE: GEN).
“ProMedica has the unique opportunity to improve its senior care portfolio through these two important transactions,” president and CEO Randy Oostra said of the Welltower deals last week. “The transactions are a testament to the strong partnership we have formed with Welltower and our shared focus on innovation and quality patient care.”
Companies featured in this article:
