The Skilled Nursing Rebound

Average prices per bed ticked up over the past four quarters, and Genesis Healthcare posted better results.

In this month’s SeniorCare Investor, I talked about the recent rise in the average price per bed for skilled nursing facilities for the most recent trailing four quarters. A small rise, but up nonetheless. Perhaps the start of a SNF rebound.

And then Genesis Healthcare reported its second quarter results, and while they still have a ways to go, they too have seen some improvement. Small, but we will take it.

Compared with the year-ago quarter, occupancy was up 250 basis points to 86.6% and the EBITDAR margin was up 79 basis points to 13.6%. Now, some of this improvement most likely came from shedding some underperforming operations, but I can live with that. On a same-facility basis, occupancy increased by 80 basis points in the second quarter. Not too shabby.

Genesis still operates 400 facilities in 27 states, and we still would like to see that number come down. In July, they completed their exit from Ohio by divesting 11 leased SNFs and one owned assisted living community. They generated a pre-tax loss of $4.7 million. It was time to say goodbye.

 

 

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