Genesis Healthcare Disappoints in Fourth Quarter Earnings
The fourth quarter of 2016 was a tough one for Genesis Healthcare, but it appears 2017 will not be any better, according to both management and those in the industry. Metrics were down nearly across the board. Average occupancy fell 40 basis points from the third quarter to 85.1% (that is also 90 basis points down from Q4:15), and the weighted average revenue per day dropped $2 per patient day. The latter was largely caused, according to management, by reduced funding in the state of Texas, particularly in its Upper Payment Limit program. Those factors, among others, resulted in an adjusted fourth quarter EBITDAR of $156.6 million, which was down 2.7% year-over-year and well off consensus... Read More »
Investors, and Congress, Ignore MedPAC
Since November’s crash, skilled nursing prices continue to rise. We sometimes wonder if the members of the Medicare Payment Advisory Commission, or MedPAC, ever get frustrated that their recommendations often go unheeded by Congress. This is certainly the case with recommendations for skilled nursing Medicare reimbursement. Last week, MedPAC recommended a Medicare rate freeze for SNFs through 2019, which Congress will surely ignore….again. Because Medicaid policy is not part of its charter, the MedPAC commissioners ignore it, even though they are keenly aware that in SNFs, Medicare payments subsidize low Medicaid payments. Medicare payment increases are usually quite small, but that... Read More »
Genesis HealthCare, Kindred and Brookdale Working With REITs
It was not easy, but Genesis HealthCare, Kindred Healthcare and Brookdale Senior Living have worked with their REITs to strengthen all concerned. In reviewing the events of the year, I think perhaps the most important ones involve Genesis HealthCare, Kindred Healthcare and Brookdale Senior Living. And, of course, the REITs with close ties to them. With regard to Genesis, I know it took some brass ones for Welltower to work through their various leases with Genesis and sell a large number of the properties. But the important aspect was the reduction of the rents and the smaller annual escalators that will keep Genesis on an upward track. Investors liked it, boosting the share price by 37%... Read More »
Fall from Grace
Ten years ago, when a 143-bed skilled nursing facility in Liberty, Missouri sold as part of a portfolio to a large undisclosed operator, it was one of the more successful facilities in Clay County. Built in 1992, it is located next to Liberty Hospital and so had a steady stream of referrals. However, after nearly a decade of neglectful ownership, the facility was only 77% occupied by the end of 2014. Genesis Healthcare bought the facility in early 2015 but inherited some operational challenges, and CMS moved to close it by that summer. In the midst of those troubles, Liberty Hospital was developing a CCRC on an adjacent lot, which would include an 80-bed skilled nursing unit. Patrick... Read More »Schedule a demo
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