January 5, 2021, Alex Spanko, Skilled Nursing News - George Hager has retired as the CEO of Genesis HealthCare (NYSE: GEN), the nursing home chain announced Tuesday morning. Robert Fish, chairman of the board, will succeed Hager effective immediately. Hager will continue as a senior advisor to the board; Fish will remain as board chairman.
“We are fortunate to have Bob step in as a leader with significant experience both inside and outside of Genesis. He brings expertise and continuity essential to Genesis as we continue to navigate the impact of COVID-19 and explore avenues to strengthen the company financially,” Hager said in a statement. “It has been my honor to serve and lead this company over the last 17 years.”
Fish has served on the Kennett Square, Pa.-based Genesis’s board since 2013, and as chairman since 2017.
“I am pleased to become Genesis’s chief executive officer and am excited to lead the company as we look to emerge from the pandemic and navigate to recovery,” Fish said in the statement. “I look forward to sharing my vision and direction for the company in the coming months.”
Fish has held a variety of roles with Genesis and its predecessor firms, including chairman and CEO of Genesis Health Ventures, lead director of Genesis HealthCare Corp., and CEO of Skilled Healthcare Group. His most recent position was president, CEO, and director of Quorum Health Corporation, an acute care hospital operator.
Hager had worked at Genesis since 1992, taking the top spot in 2003. The now-former CEO’s long tenure at the firm included its 2000 bankruptcy, which Genesis blamed primarily on Medicare cuts.
“I think managing a very complicated restructuring and getting the company back out as a public company in 14 months was a great success, even though no one wants to go through that process,” Hager told our sister publication, Senior Housing News, in 2018. “It was a time that let us take a breather from what was a very significant growth period in the prior six or seven years. I was able to reflect on the things we needed to do to be a better company coming out.”
The Tuesday leadership change comes at another crucial time for the nursing home giant, which operates more than 300 facilities across 24 states. Even after receiving substantial federal COVID-19 support, Genesis’s future remains deeply uncertain: Hager in November indicated that the company was in active discussions with capital partners about “restructuring alternatives,” with coronavirus-related losses exceeding aid by about $60 million.
“It’s hard to give you a percentage or a status of where any of those conversations are,” Hager said. “But there are a lot of levers here that can be pulled, and we have been and will continue to be very active at looking at the optimal restructuring alternatives going forward.”
The restructuring disclosure came after an August announcement that the company had “substantial doubt” about whether Genesis would survive the following 12 months given the ongoing strains of COVID-19 — primarily the combination of both revenue declines associated with sharply reduced admissions, and expense increases related to personal protective equipment (PPE) and staffing.
“Without giving effect to the prospect, timing and adequacy of future governmental funding support and other mitigating plans, many of which are beyond the Company’s control, it is unlikely that the Company will be able to generate sufficient cash flows to meet its required financial obligations, including its rent obligations, its debt service obligations and other obligations due to third parties,” Genesis disclosed in its second-quarter 2020 earnings release.
Several of the operator’s real estate investment trust (REIT) landlords — including Sabra Health Care REIT (Nasdaq: SBRA), Omega Healthcare Investors (NYSE: OHI), Welltower Inc. (NYSE: WELL), and LTC Properties (NYSE: LTC) — responded to the operator’s troubles by taking rent write-downs and switching the tenant to cash-based accounting terms.