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Senior Housing > Blog > 2014 > March

Arizona’s Skilled Nursing Homes

A lot of people move South to avoid the cold, snow, rain or other inclement weather. Arizona is one of these states with a large senior population. There are 144 nursing homes approved for Medicaid and Medicare throughout the state with just over 16,000 beds. If you are interested in senior housing for sale in Arizona, you may want to consider these statistics.

Characteristics of Arizona Nursing Homes

There is a large breakdown of the capacity and type of ownership in Arizona’s nursing homes. Rather than having a similar profile, each of these facilities falls into one of three categories. The one statistic most share is the placement. Only a mere one percent of Arizona’s nursing homes are in a hospital setting. Other statistics you can use for comparison when looking for ARF for sale include:

Bed Capacity

  • Over 100: 13 percent
  • 75-99: 25 percent
  • 50-74: 25 percent
  • 25-49: 13 percent
  • Under 24: 25 percent

Ownership

  • Government: 29 percent
  • Non-Profit: 14 percent
  • For-Profit: 57 percent

Continuing Care

  • Yes: 21 percent
  • No: 79 percent

Ratings of Arizona Nursing Homes

When you are comparing properties with your skilled nursing brokerage agent it is advisable to compare the ratings with the property characteristics. The satisfaction patients and their family members have with the nursing home may be indicative of the success of a skilled nursing home. To stay ahead of the competition, you want to ensure you are ranked higher than the others. Sadly, two percent of the homes are rated with zero stars. While this is not a category any property should fall into, you do want to be above average. Consider these statistics:

Rankings

  • 5 Stars: 26 percent
  • 4 Stars: 28 percent
  • 3 Stars: 15 percent
  • 2 Stars: 19 percent
  • 1 Star: 10 percent

Complaints

  • More than 3: 69 percent
  • 3: 6 percent
  • 2: 6 percent
  • 1: 9 percent
  • 0: 10 percent

When you are looking at senior housing for sale, it is wise to be well informed.. Analyzing these statistics from Arizona skilled nursing homes illustrates the majority of homes hold a capacity of 50 or more and are for-profit. Most rank in at 5 stars, but have had a number of complaints. You want your facility to compare favorably with these or be better than, in order to gain more residents and profit.

Characteristics of a Doomed Assisted Living Facility

In California, there is concern carried over from the last decade about failing assisted living facilities. Many are forced to declare bankruptcy, which negatively affects not only the owner, but other workers and residents as well. In order to see if the growing concern was valid, the state began researching facilities. In this research, it was found that certain characteristics are inherent in failed nursing homes. These issues should be addressed `during your assisted living brokerage appointment.

Beds and Occupancy

The largest determinant of a nursing home at risk for bankruptcy is its occupancy. The number of beds available directly relates to the facilities profits. The more beds; the more patients. This means there is more money coming in on a daily basis. Statistics found during the research show:

  • 1-59 beds loss $4.86 per patient per day
  • 60-99 beds profits $1.82 per patient per day
  • 100+ beds profits $2.55 per patient per day

Essentially, when you want to buy an assisted living facility, you may want to consider larger population facilities. It is difficult to bring in a profit with just a few beds. .Beds must be filled to insure a healthy profit. If you have empty beds, profits are reduced.

Patient Care Costs

Once you determine the number of beds and occupancy rates that fit your home, consider patient care costs. The higher the patient costs, the more likely the business is to declare bankruptcy. This is linked to lower patient occupancy as well. The lower the occupancy rates the higher the patient care costs. This ratio is dependent upon the level of required care for each resident. The smaller assisted living homes for sale are generally populated by special needs people. Patients are unable to care for themselves in grooming, feeding, and other necessities. More staff is needed around the clock in order for proper care to be given, which raises costs without raising profit.

Ownership

Non-profit and government retirement homes are not allowed to declare bankruptcy. This means the study covered for-profit and not-for-profit only. This illustrates that these facilities are at a higher risk dependent on successful marketing campaigns to bring in new residents. Likewise, research shows chains are less likely to declare bankruptcy. Chains generally maintain lower operational costs. Brand recognition also often favors higher occupancy.

Not every California nursing home is going to face bankruptcy. It is advisable to speak with your assisted living broker to find how to create a successful business. There are a number of facilities for sale that can meet your needs and those of your potential residents.

California Sees 19 Skilled Nursing Facilities File Chapter 11

Like many senior living and skilled nursing operators, Country Villa Service Corp was struggling financially in recent years. This, along with class action lawsuits, forced 19 of the facilities to declare bankruptcy. The Chapter 11 filing is not for the entire corporation, but individual assets seeking protection. The two biggest reasons for this move include Medicaid along with the lawsuits.

Medicaid Responsibility

When a patient qualifies for Medicaid, he pays only necessary co-payments or out-of-pocket expenses. Like most other insurance companies, Medicaid is responsible for sending Country Villa funds. Unfortunately, the state of California has been slow in processing and sending money to the skilled nursing facilities. This can be detrimental to the company who cannot then finance their company needs, such as paying wages, attaining medical supplies, or general care needs. Country Villa also experienced lower credit and could not finance through loans.

Class Action Lawsuits

Along with missing funds from Medicaid, Country Villa is up against a number of class action lawsuits. These are due to paid wages and hours along with poor care of patients and medication usage. A total of seven lawsuits are still pending. This led the franchises to file for bankruptcy as a means of protection. It means there are no funds to pay out if the plaintiffs win.

Moving Forward

Country Villa believes there will be no senior housing facilities for sale due to this. There is an overall rate of 90 percent occupancy with a few of the homes at 100 percent. These homes include:

  • Plaza Convalescent Center
  • Westwood Healthcare Center
  • Sheraton Healthcare Center

This means that with diligent planning and financial guidance, the company should be able to move forward. A new financial model was already created so the skilled nursing facilities are ready to start a new chapter after this bankruptcy.

There are a number of reasons skilled nursing facilities must file bankruptcy. Government owned and non-profits cannot use this as a means of protection, but others do and will. It is extremely difficult to make a profit generally, but when the home runs a poor financial plan and does not receive funds due, it is inevitable. If you find yourself stuck and do not think you will move forward from bankruptcy, contact a reputable skilled nursing brokerage. He can help you manage the sale of your senior home and get you out of trouble.

JCH Sells Bay Area Skilled Nursing Bankruptcy Assets in 363 Sale

for blog

Shep Roylance of the Premier Housing and Senior Housing & Skilled Nursing Brokerage Firm, JCH Consulting Group announces his representation of both the Debtor and Seller in the 363 sale of A&C Healthcare Service’s two skilled nursing assets.  The successful sale consisted of 60 Bed Camden Convalescent Hospital and the 140 bed A&C Convalescent Hospital of Millbrae.

Shep Roylance was employed by the Federal Bankruptcy Court to market and sell A&C Healthcare Services’ three senior housing assets.    At the auction conducted by Alan Stomel, Javed Ellahie and Shep Roylance, three bids were made from Roylance’s pool of qualified nursing home buyers.  The highest bids were made by a two groups of investors highly experienced in the operation of skilled nursing facilities. The Camden Convalescent Hospital transaction was structured by the sale of the business and the assumption of a 15 year lease NNN lease.   The A&C Convalescent Hospital of Millbrae transaction was structured by the sale of the business and the assumption of a 5 year lease.  Landlord and Tenant are negotiating a new 20 year NNN lease for Millbrae.

In his capacity as Senior Vice President of JCH and with unparalleled knowledge of the healthcare industry, Roylance specializes in the acquisition and disposition of skilled nursing facilities and healthcare facilities across the entire spectrum of the senior housing market.  Additionally Roylance’s knowledge and experience in the intricacies of the Bankruptcy court is invaluable in the execution of transactions of facilities in Bankruptcy.  The successful close of A&C’s transaction marks Roylance’s second closing of facilities in Bankruptcy since the beginning of the year.

For more than a decade Shep’s main goal has continued to be the improvement of the quality of care of the senior population, providing world-class nursing home brokerage and assisted living brokerage service to both buyers and sellers of long term care facilities.  Although Roylance services individual owner/operators, regional and national healthcare providers, he specifically targets the representation of institutional investor’s healthcare portfolios in part or in entirety.   As a problem solver in troubled facilities in bankruptcy, Roylance contributes to the continuing growth of a stable healthcare industry.  His judicious representation of the entire spectrum of the senior housing market has earned him an outstanding nationwide reputation.