TEXAS NURSING HOMES

A chain of six skilled nursing facilities defaulted on its debt with a large commercial healthcare lender. The lender engaged HMP to assess the viability of the provider and chart a possible turnaround. Ultimately, the lender foreclosed on the loan and engaged HMP as the turnaround agent.

Issues

  • $2.5 million negative EBITDA due to inefficient staffing and poor operating model
  • Low occupancy due to low patient satisfaction, ineffective marketing, and obsolete physical plants
  • Low morale among nursing staff due to lack of management attention to quality improvement and training
  • Lender was facing a near total loss under the existing conditions

Approach

  • Consolidated two under performing homes in the same market
  • Immediately focused on quality care and staff training
  • Implemented efficient staffing models to reduce costs
  • Developed an effective sales and communications strategy to effectively reach providers in each local market
  • Modernized and improved the physical plant to enhance the resident experience

Results

  • $3.5 million EBITDA improvement
  • Returned all facilities to full accreditation and licensure compliance
  • Facilitated the successful sale of the facilities by the lender
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