Two of Michigan’s top-rated senior living groups finalized a new affiliation last Friday, forming the third-largest nonprofit senior living owner-operator in the state.
The affiliation between United Methodist Retirement Communities (UMRC) and Porter Hills Presbyterian Village creates a combined $150 million organization with 13 communities across lower Michigan, serving more than 6,700 residents and employing 1,300 people in 22 counties. The two groups announced they were first exploring an affiliation agreement last August.
UMRC and Porter Hills will continue to operate as independent brands but will have a streamlined executive team and shared governance supporting both groups, interim CEO Stephen Fetyko told Senior Housing News. John Thorhauer will serve as interim president and chief strategy officer.
A search for a permanent president and CEO is underway. The role is expected to be filled by August, Fetyko said.
An affiliation of equals
What makes the UMRC-Porter Hills affiliation unique is it is one between two groups of similar size, acuity range and operations, Fetyko said.
“This is the only instance where a larger system is not bringing on board a smaller one,” he said. “We’re equals.”
And Thorhauer emphasized what this means in terms of scale, now that the two groups are combined.
“As far as we know, this is the largest nonprofit affiliation in Michigan history,” Thorhauer said.
UMRC and Porter Hills will share executive leadership such as chief strategy officer, chief financial officer, marketing, operations and human resources teams. Naming those executives will be easier than in other affiliations, Fetyko said. Porter Hills’ executive team members were already serving on an interim basis, allowing the two companies to streamline with minimal stress.
The shared executive team will see immediate savings and shared best practices and efficiencies, as well as have short and long-term benefits. UMRC and Porter Hills are looking to reinvest in community renovations short term, while the combined depth and breadth of its knowledge base sets the foundation for future growth.
“We want to leverage both groups to create a platform for expanding existing community-based services,” Fetyko said. “We can now target middle-market opportunities and create the ability to meet the need for senior housing by the growing baby boomer demographic.”
The new affiliation presents an opportunity to expand UMRC and Porter Hills’ Programs for All-Inclusive Care for the Elderly (PACE) platforms. UMRC and Porter Hills bring a combined five PACE communities to its portfolio.
Traditionally, one must be dual eligible for Medicare and Medicaid to qualify for PACE. If one wants to enter PACE and does not qualify for both, those costs are paid out-of-pocket.
With recently announced Medicare Advantage changes opening new opportunities in the senior housing space, there are opportunities to leverage MA for the PACE platform, Fetyko said.
“We feel we’re at the leading edge of managing under the PACE model,” he said. “Now that we’re partners, it gives us an opportunity and experience to expand.”