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The Pennant Group’s decentralized approach, supported by its service center, enabled its operators to respond rapidly and in a locally tailored fashion in the face of a global pandemic, executives said Tuesday on the company’s first-quarter earnings call.

Pennant’s senior living communities and home health and hospice agencies operate relatively independently, supported by a service center that provides information technology, compliance, human resources, accounting, payroll, legal, risk management, education and other services. This structure, the company said, allows on-site leaders and caregivers to focus on the day-to-day care and business within their individual community or agency.

“Each operator’s response to the pandemic was swift, locally tailored and evolved quickly to meet the needs of our patients and their loved ones,” Pennant Group CEO and President Daniel H. Walker said. “Our decentralized, local approach, supported by our service center and professional skilled resources, is designed to respond rapidly in situations like this where information and data can be shared broadly, quickly and without having to go through the usual corporate channels of communication that can be slow and deteriorate the information shared.”

As of May 12, Pennant’s senior living communities reported 10 active COVID-19 cases in two communities, with 49 of its senior living communities having no positive cases. 

Eagle, ID-based Pennant’s coronavirus response plan, Walker said, was organized in four areas — environmental precautions, supplies, staffing and communication. Its field and service center partners created “methodical pathways for communication and accountability to react quickly when operations experienced suspected cases, limited supplies or had to react to the dozens of state and federal updates.”

In April, Pennant operators spent $500,000 above budget to secure the necessary personal protective equipment and supplies to combat COVID-19. Between bulk purchases through the service center and individual operators working their local supply chains, Walker said, the company has the necessary PPE to operate for several months at current levels, as well as a pipeline in place to quickly obtain more if necessary. 

Through April, nearly $1 million in labor costs can be attributed to “hero pay” in a handful of select operations where a heightened risk of exposure to the virus exists. Walker said this increase will be offset somewhat by cost containment measures, including furloughs, flexible schedules and reduced salaries for the executive team, while pandemic pressures exist.

From March 11 to May 11, occupancy fell by 2.5% in the senior living portfolio, although the company reports a stabilization in occupancy going into May. Occupancy was 80.2% at the end of the first quarter, and average monthly revenue per occupied unit increased 2.7% over  the prior-year quarter. 

Walker said the company’s senior living business saw measurable improvement across the platform. Many of its buildings are still relatively new to the portfolio, and most were substantially underperforming when acquired, he said. 

Sherwood Village, for example, a 160-bed assisted living and memory care facility in Tucson, AZ, had 58% occupancy when it was acquired in 2014. Operators have grown that occupancy to 95%. 

“We are confident there is significant opportunity for long-term growth in this business,” Walker said of senior living. “Senior living leaders made a number of concerted efforts to increase occupancy and exercise discipline around expenses. The early results of these efforts have been positive, and we have strong momentum going into the rest of the year.”

The company received approximately $9.9 million from the Coronavirus Aid, Relief, and Economic Security (CARES) Act for which it did not apply. The company has not made a decision whether to accept or return the funds, which are related to its home health and hospice business, while it evaluates the terms and conditions.

Pennant owns Twin Falls Manor, a former independent living community in Idaho now caring exclusively for people with coronavirus. If a resident in a long-term care facility in the region tests positive for COVID-19, that person can be transferred to Twin Falls.