This nonprofit plans to buy Doylestown Health's Pine Run senior community. What you need to know
Doylestown Health has announced a Pennsylvania nonprofit has taken the first step in purchasing its Pine Run retirement community.
The hospital and Presbyterian Senior Living have entered into a non-binding Letter of Intent for the organization to assume ownership of the 532-unit community, which includes Pine Run Lakeview, an assisted living and specialized memory care center, and skilled nursing care at Pine Run Residential Care.
PSL intends to continue operating Pine Run as a Life Plan Community, sometimes called a continuing care retirement community providing multiple living options on one campus. The health system, which also owns Doylestown Hospital, announced in February it was seeking a buyer for Pine Run.
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Doylestown Health System CEO and President Jim Brexler announced the pending sale in a press release Thursday. Here is what we know so far about the pending sale:
What is a nonbinding letter of intent?
It's essentially a template that provides the framework for preparing a legal document that describes a potential agreement about the terms of a transaction or purchase that may occur between two parties.
Will PSL continue to have Doylestown Health provide health care services ?
Yes. Brexler stated the hospital will continue to work with PSL to provide “high-quality medical services and clinical leadership” to the new Pine Run community.
“We look forward to a long and positive working partnership,” Brexler said.
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What is Presbyterian Senior Living?
It is a not-for-profit organization that has provided retirement choices, healthcare services and residential living options for people 55 and older for more than 90 years.
The company is headquartered in Dillsburg, York County and provides services to approximately 6,000 seniors in 30 locations in the mid-Atlantic region of Pennsylvania, Maryland, Ohio and Delaware.
Pine Run would be its first community in Bucks County. The closest other PSL communities are Kirkland Village in Bethlehem and Cathedral Village in Philadelphia.
When will the sale of Pine Run be finalized?
Not for at least a few months. Doylestown Hospital will need multiple hospital and health system board approvals, which could push a finalization into September.
Skilled nursing facilities owners are required to notify the Pennsylvania Department of Health of any change in ownership at least 30 days before a change takes place, according to the department, which licenses nursing homes.
The state health agency does not release information related to specific applications until after a Change in Ownership is complete.
Why is Doylestown Health looking to sell Pine Run?
The health system has cited “extraordinary and unprecedented” financial hardships as a result of the COVID-19 pandemic and continuing high inflation.
Doylestown Health, which operates Doylestown Hospital and other clinics and urgent care facilities as well as Pine Run, reported an operating loss of $24.34 million for the 12-month period ending Sept. 30.
The pandemic has eaten away at 40% of unrestricted funds, which the health system has used to cover almost $70 million in pandemic-related losses, Brexler said. Money the hospital received through various federal pandemic relief bills has only covered about 30% of the losses, he added.
Doylestown Health system does not have a large endowment or other funds it can draw from. Pre-pandemic the health system operated on a slim profit margin, and reinvested it into services, Brexler said.
In addition to the pandemic-related losses the health system has experienced a significant increase in costs, which insurers including Medicare have not covered.
Current hospital contracts with commercial insurers were negotiated in 2019 pre-pandemic, and any revenue increase associated were marginal, meanwhile hyperinflation have increased operation costs almost 27%.
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This article originally appeared on Bucks County Courier Times: Nonprofit organization puts in a bid to buy Doylestown' Health's Pine Run
