Blaming high liability insurance premiums, Genesis Health Ventures, Kennett Square, Pa., announced last week it is divesting its Florida operations.
The nursing home chain agreed with Formation Capital to sell nine skilled-nursing facilities and transfer leasehold rights to one home and one assisted-living facility for $26.8 million. Separately, Genesis signed an $8.5 million deal with Proformance Senior Living Management for its four remaining assisted-living facilities in Florida.
Company Chief Executive Officer Robert Fish said liability insurance costs are 10 times higher in Florida than in other states. "We are pleased to see that tort reform is being discussed; however, it may be some time before reform meaningfully reduces insurance costs in the state," he said.
Genesis' decision to exit Florida follows a trend set last year by other leading nursing home operators, which have added tens of millions of dollars to their reserves for resident-care liability costs. Kindred Healthcare, Louisville, Ky., began divesting its Florida operations in October 2002, and Beverly Enterprises, Fort Smith, Ark., sold four assisted-living centers and 49 skilled-nursing facilities early last year. Last week, Genesis sold eight nursing homes in Illinois to Rothner Health Ventures, Evanston, Ill., for $25.4 million.
Also last week, Charles Roadman, president and CEO of the American Health Care Association and the National Center for Assisted Living, vowed to support tort reform legislation introduced by U.S. Rep. Jim Greenwood (R-Pa.).