Last year, the nonprofit announced that ProMedica Health System’s aged care division recorded an operating loss of $275 million last year.
ProMedica made a bet on the senior housing market when it spent $1.4 billion in 2018 to acquire emergency care provider HCR ManorCare. the company is disclosed in presentation investors. The business line’s operating revenue decreased from $2.97 billion in 2020 to $2.75 billion in 2021.
Last year, ProMedica Health System sold 21 aged care facilities that collectively lost $46 million in 2021 and plans to sell four more this quarter, chief financial officer Steve Cavanaugh said during an investor call. In 2021, ProMedica also acquired nine skilled care centers and four nursing/memory care centers.
In the healthcare system in Toledo, Ohio, consolidated operating margins fell into negative territory from 0.7% in 2020 to -2% last year, despite operating revenue rising from $6.86 billion to $6.93 billion dollars.
Kavanaugh attributed the company’s problems in 2021 to the number of patients still below pre-pandemic levels, labor shortages, and less federal assistance due to COVID-19. The company received $360 million in pandemic funding in 2020, up from just $99 million last year, according to ProMedica.
The omicron COVID-19 option has sidelined thousands of workers and forced the healthcare system to raise wages and award bonuses, Kavanaugh said. ProMedica expects staffing issues to be a hurdle this year as well, he said.
“The nursing home industry, in particular, has been one of the most problematic because of labor and staff costs,” Kavanaugh said. “At least the people we hired today are actually working and not sitting at home in quarantine.”