... and now back to that little ol' entity called HCR ManorCare

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James M. Berklan
James M. Berklan

A lot has been made about ProMedica's acquisition of the once-proud nursing home giant HCR ManorCare. And rightfully so.

You don't become the 15th largest health system in the country by flipping a former for-profit titan into your nonprofit camp without attracting notice. This space is as guilty as any about reporting the intriguing possibilities.

But while so much talk has been about the daring acute-care entity, it seems a lot has been overlooked about the former No. 1 nursing home chain in the country. A behemoth that many may have dismissed after a financially bruising couple of years.

The folks at HCR ManorCare would like you to know, however, that they are not only doing fine, they're expecting to build on what happens to be a very proud and successful workforce. They're thankful for a stabilized owner, have a new lease on corporate life and are ready to make positive headlines. 

And (drum roll please) … they're even willing to talk about it. It is a new day indeed at the once legendarily media-shy nursing home operator.

“One of the most misunderstood parts of this deal is the geographic proximity of ProMedica and us in northwest Ohio,” said Steve Cavanaugh, the former ManorCare CEO who now serves as the president of its division within ProMedica, to me recently. “The real opportunity is taking our capabilities and putting them together. What's paramount is the insurance [piece from ProMedica], which is something we could have never replicated. It will allow us to ask, ‘How do you identify and manage risk?' And then we can go into creative models” to deal with the likes of UnitedHealthcare, Humana and Aetna.

Cavanaugh said the huge new health system will have “a very nice model” that can be tested and studied in northwest Ohio and southeastern Michigan and, hopefully, eventually expanded into other areas. “I think we'll get a lot of calls,” he said.

The implications for the U.S. healthcare system in general, and ManorCare's 50,000-strong workforce in particular, could be spectacular.

“We've had our trials and tribulations the last couple of years,” Cavanaugh said, acknowledging HCR's fall from grace. He said he treasures being able to once again have a stable capital structure, and to be able “to focus on taking care of patients and employees.”

“We're out to reassert ourselves as the employer of choice in our markets,” he added.

Existing employees shouldn't expect much change, he said. After the existential roller-coaster the company's been through lately, that's a good thing.

If nothing else, HCR ManorCare employees have been resilient. Some 10,000 of them — about 20% of the total — have worked for the company for longer than 10 years, Cavanaugh pointed out.

“Our company has been a great place to work,” he asserted. “And going forward, I see that only improving. We're going to put people on the cutting edge of what people want to work for.”

Count ProMedica President and CEO Randy Oostra as a big fan. There's a good reason his company is leasing 218 ManorCare properties for 15 years from a recently formed 80/20 joint venture with healthcare real estate investment trust Welltower.

“When you put two well-run organizations together, they both have unique capabilities,” Oostra told me. “We've already found that HCR ManorCare does some things better than we do and has parts that run better.”

This should come as no surprise, Cavanaugh said.

“HCR ManorCare's capital structure was broken,” he explained. “Operations were never a problem. What we needed was ownership to help us through. There's going to be a continuing conversation, an opportunity to set that record straight.”

That's right: HCR ManorCare has spoken. And you heard it here.

Follow Editor James M. Berklan @JimBerklan.


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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.