Kindred Healthcare will continue to offload its nursing facility operations leased from Ventas, according to President and CEO Paul J. Diaz.
In a presentation to the company in March, Diaz said the decision in 2012 to divest 54 Ventas-leased nursing centers was “one of the most difficult things I’ve had to do professionally.”
However, the process of divesting Ventas properties is far from over. Diaz said 86 Ventas nursing centers will come up for renewal in April 2015, and he anticipates divesting many that are located outside of integrated care markets, where rents are too high. Other “nonstrategic assets” will also be sold in 2013, he said.
The announcement came in the midst of a company pay freeze. The nation’s fourth-largest nursing home operator seeks to maintain a 1% margin after facing $300 million in reimbursement cuts since 2009, Diaz said.
Despite the compensation freeze, Kindred announced a one-time $25 million bonus to about 47,000 workers when it released its 2012 fourth quarter and annual results in late February.
The company’s bottom line improved in 2012. Consolidated revenues were up 12%, increasing from $5.5 billion in 2011 to $6.2 billion in 2012. It posted a $33.4 million loss from continuing operations in 2012, improving on a loss of $47.8 million in 2011.
“For the full year, we are pleased to report that we met our core earnings objectives that we estimated at the beginning of the year,” Diaz said.
He added that the nursing center division “maintained stability.”
Kindred’s earnings guidance for 2013 anticipates revenues of $5.9 billion. This takes into account $25 million to $30 million in Medicare reductions for therapy services, as a result of January’s fiscal cliff deal.
Kindred officials said they expect $100 million in aggregate reimbursement reductions in 2013.