Kindred Healthcare, Inc., a Louisville, Ky.-based healthcare services company, has announced plans to dispose of two of its unprofitable long-term acute care hospitals.
Kindred has signed a $22.3 million deal to acquire for resale the real estate associated with its 79-bed Kindred Hospital Northeast-Braintree in Braintree, Mass., from Health Care REIT, Inc. Upon completion of the transaction, Kindred intends to close the hospital and sell the real estate.
Kindred is also marketing Kindred Hospital Modesto in Modesto, Calif. The hospital has been closed, but the company continues to operate a 64-bed skilled nursing unit on the site.
The two targeted hospitals reported aggregate revenues of approximately $37 million and $18 million for the year ended December 31, 2007, and the six months ended June 30, 2008, respectively. Aggregate pretax operating losses associated with these facilities (including an asset impairment charge related to the Modesto facility of approximately $5.1 million recorded in the second quarter of 2008) approximated $8 million and $9.3 million for the same respective periods.
Kindred Healthcare expects to report a pretax loss ranging from $35 million to $40 million in connection with these divestitures, including the write-off of approximately $15 million of intangible assets.
"While our primary focus is continuing to improve the quality of our operations in each of our sites of service, we are also continuing our efforts to improve our financial results through the disposal of unprofitable or non-strategic assets," said Paul J. Diaz, Kindred's president and chief executive officer.
"These transactions will allow us to focus more management time and resources on our other, more productive operations, which should improve the quality of our services and promote better financial results as well," he added. "We are working with our patients and their families, as well as our employees, to ensure that these transactions are handled smoothly and that all patients are transferred to an appropriate healthcare setting."