Louisville, Ky.-based Kindred Healthcare, a hospital, nursing center, and contract rehabilitation services provider, released its second-quarter 2017 report and cited a $409.1 million decrease in revenue compared to last year. The company has made Dallas-Fort Worth headlines recently for closing a White Rock Lake hospital and three other Texas hospitals.
A note on Kindred’s most recent report cites company changes that may have influenced the fluctuation in revenue, including: four hospitals acquired during the second quarter of 2016; three hospitals sold during the second quarter of 2016 and 12 hospitals sold during the fourth quarter of 2016; one hospital closed during the second quarter of 2017 (Kindred Hospital White Rock); and, three hospitals closed during the third quarter of 2016.
In addition to the opening and closing of hospitals, Kindred CEO Ben Breier said during a second-quarter earnings call that the company’s restructuring will temporarily affect its business as it removes the skilled nursing facility sector from its services. As previously noted in D CEO Healthcare, the company currently operates three skilled-nursing facilities in North Texas: in Fort Worth, Grapevine, and Mansfield.
Breier said in a statement: “For the balance of 2017, as we’ve discussed previously, there are a lot of cash puts and takes from the sale of our skilled nursing facility business that will temporarily impact cash flow. For example, we will retain the working capital associated with the skilled nursing assets. As transactions close over the balance of the year, we will settle most of the accounts payable in other working capital liabilities at that time.”
Kindred CFO Stephen Farber added during the earnings call that the discontinued operations for skilled nursing facilities will lead to the eventual closing of the facilities. In June, it was announced that Kindred will divest the skilled nursing facilities to New York-based BM Eagle Holdings for $910 million. As it continues finalizing this transaction, Farber noted the closing of the facilities is “completely dependent on the timing of multiple transaction closings, which are uncertain but expected to occur in phases over the remainder of 2017.”
Despite the changes in the skilled nursing area, Kindred is still focusing on the hospice industry, including in North Texas. Kindred operates three hospice care centers in Dallas and one in Grapevine. Additionally, Kindred operates long-term, acute-care hospital locations in Dallas, Dallas Central, Arlington, Mansfield, Fort Worth, and Fort Worth Southwest.
Ultimately, Breier said, with the restructuring process largely complete, “our clinical liaisons remain poised to capture our share of the hospice industry tailwinds … Total same-hospital admits were down 2 percent compared to the prior year, as our hospitals continue to face many of the same volume headwinds that so many in healthcare have spoken about this quarter.”