Negative Operating Margins for SNFs?
Always be careful about terminology in health care, and make sure you understand what things mean, like operating margin. It is always important to understand the definitions of certain terms, especially when it comes to health care. There has been a lot of news lately about how the median “operating margin” for skilled nursing facilities nationally has now sunk below zero. I have to admit, this drives me crazy. The implication is that for the median nursing facility, it is operating at a breakeven level….from operations. Operations are usually defined as labor, food, maintenance, utilities, basically everything that is needed to “operate” the facility. As I said last week, if half... Read More »
Cornerstone Healthcare Files For Bankruptcy Protection
Cornerstone Healthcare, an operator of skilled nursing facilities in the Pacific Northwest, filed for Chapter 11 bankruptcy protection. The CEO, Will Masterson, announced the reorganization in a statement filed with the U.S. Bankruptcy Court Western District of Washington that listed lender and lessor issues as the reason for it. Operations across the portfolio weren’t great leading up to the bankruptcy, but they certainly could have been worse. The portfolio includes 14 SNFs and one assisted living community in Washington, Oregon and Idaho, with total capacity of 1,508 beds. Occupancy was 78% based on that capacity. In the year to date through September 2019, the company generated more... Read More »
Required Staffing Increases, Now?
This is no time for Congress to start penalizing skilled nursing facilities and raising staffing minimums. Are people in our nation’s capital really that out of touch with reality on the ground? Yes. Finding quality staff is hard enough in skilled nursing facilities, but then getting reimbursed to pay for them is even harder. So, my senator from Connecticut is a co-sponsor of the Quality Care for Nursing Home Residents Act. Now, who doesn’t want quality care for nursing home residents? I assume everyone, except those who would like to put the sector out of business. For your standard 120-bed nursing facility, the bill proposes having three RNs om duty at night, four during the... Read More »
Solving the Affordability and Aging Inventory Issues
Two growing problems in the senior care industry, aging inventory and a lack of middle-income/affordable seniors housing options, may actually be solved (at least, partially) with one initiative. That has been on the mind of Bill Pomeranz, Managing Director at Cain Brothers, who with the help of David Johnson, CEO of 4SightHealth, recently published his thoughts on converting aging senior living properties to affordable housing. Their main point is that the industry will have to be adaptable: adaptable to aging physical plants; adaptable to a large portion of the population that cannot comfortably afford what is being built now; adaptable providing more services and utility in a... Read More »
Capital Senior Living Hits 10-Year Low
After the earnings reports over the past four weeks, it was unclear whether the seniors housing sector had hit operational bottom or not. Unfortunately, Capital Senior Living’s share price is still trying to find a bottom. But November 19th’s low of $3.45 per share was also the lowest price in more than 10 years, when in March 2009 it hit a low of $2.36 per share. This is not what new CEO Kim Lody wants to see. It is not what shareholders are expecting to see. In March of 2013, the shares hit a peak of $27.90, and hovered below that for the next few years. Acquisition activity was strong, and some shareholders thought they should sell and not wait to see higher values. Within five years,... Read More »Schedule a demo
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