During this year’s second quarter, Ensign Group said its strategies for underperforming skilled nursing facilities (SNFs), which included removing old leadership teams, pushed its SNF revenue to $286.3 million, an increase of 4 percent, year over year.
According to Ensign’s CEO Christopher Christensen, the acquisition of SNFs in 2017 and 2018 turned an EBIT margin that was 760 points above the SNFs it took possession of in 2015 and 2016. The key difference was how Ensign managed the SNFs leadership teams, which once left in place caused challenges in operationalizing the provider’s management system. During a quarterly earnings call this month, Christensen looked back on the 2015/2016 management issues,
We made a mistake thinking we could make it work. And it didn’t work. And we kind of had to start all over again in those acquisitions
Skilled Nursing News reports that Christensen attributes the success of its SNF acquisition to Ensign’s decentralized model: Each local operator has significant autonomy over purchasing and management decisions, while a single operations center handles certain back-end functions to form a kind of local-national hybrid.
In June 2018, Ensign acquired the operations of Sun West Choice Healthcare and Rehabilitation, a 140-bed skilled nursing facility in Sun City West, Arizona, subject to a long-term lease.
CNBC covered the acquisition and interviewed Christensen,
Sun West Choice is a perfect example of an off-market acquisition resulting from relationships built by our local operators over many years. While we continue to evaluate many potential acquisition opportunities with extreme care and thought, this operation stood out as one that shows significant long-term potential while adding strength to our growing footprint in Arizona.
Ensign’s portfolio includes 184 skilled nursing operations, 22 with assisted living operations, 51 assisted and independent living operations, 22 hospice agencies, 20 home health agencies and four home care businesses across fifteen states. Ensign owns the real estate at 67 of its 235 healthcare operations.
Bandera Healthcare, Inc., is Ensign’s Arizona-based subsidiary.
Read more about Ensign’s quarterly earnings call in Skilled Nursing News