One of the reasons big seniors housing and senior care operators (by big, we mean Brookdale– or HCR ManorCare-big) so often run into problems is that the business is difficult to scale. It is still largely a local business, with the Executive Directors and Marketing/Sales Directors responsible for filling units and maximizing cash flow. When you have a large firm, your key staff at the community-level, who may not be receiving enough attention or enough incentive to do well, could be inclined to jump ship. Just look at the number of Brookdale ED resumes floating around following the Emeritus acquisition. One company that seems to have figured out how to scale correctly is The Ensign Group, which now has 246 owned or operated healthcare properties in its portfolio. We profiled the company’s operating strategy a few weeks ago.
Its latest acquisition featured the operations of a 99-bed skilled nursing facility in Downey, California. Ensign’s California-based operating subsidiary Flagstone Healthcare South, Inc. took over management.