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