Specialist
Former President at Genesis Healthcare Inc
Agenda
- SNF (skilled nursing facility) market overview, including coronavirus impacts on census volumes and reputational risks
- Competitive positioning of major players including Genesis Healthcare, The Ensign Group (NASDAQ: ENSG) and Golden Living
- Labour cost spikes – ability to reduce costs, preserve margins and improve retention via flexible staffing models and other levers
- Turnaround strategy considerations, players’ potential reliance on further government stimulus and effects on facility multiples
- Regulatory environment, strategic assessments and outlook for Q4 2021 and beyond
Questions
1.
What are the most important trends and developments you’ve been monitoring in the US SNF [skilled nursing facility] and post-acute care sector over the past year or so?
2.
How has Genesis Healthcare’s story evolved over the past few years?
3.
What major, long-term effects may coronavirus have on the senior living and SNF market? What reputational fallout could operators suffer from the negative press around facility mismanagement, and how much of a headwind could this be to a player such as Genesis?
4.
How do you assess the regulatory environment for senior living, rehabilitation and long-term care? Are there any developments that could materially affect operators, perhaps in response to the pandemic-related issues we’ve discussed?
5.
What’s your take on patient diversion from SNFs to home care given the Biden administration’s focus on the home setting? How could this migration unfold over the next few years?
6.
How are industry census volumes trending for rehab and skilled nursing, respectively? How do you anticipate volumes trending over the next several months given your previous commentary?
7.
What is Genesis’s rough reimbursement mix across commercial, Medicare, Medicaid and self-pay? How do reimbursement levels compare? I appreciate this will vary substantially by region.
8.
How much of an increase in the Medicaid population would you anticipate for SNFs over the next several years, perhaps due to coronavirus patient population shifts to government insurance and the macroeconomic employment environment?
9.
What could a successful Medicaid strategy entail? How can operators make profits from this population despite its lower relative reimbursement?
10.
How do you assess Genesis’s contract negotiation efforts with managed care providers to secure favourable reimbursement? Is this an underutilised opportunity to improve performance? What leverage do operators have with payers to increase reimbursement levels?
11.
How important are Genesis’s relationships with key referral sources across skilled nursing and rehab? How important are these referral pathways to maintaining healthy census volumes?
12.
Could you discuss Genesis’s announced move to a “market-driven model”? To what extent will this lead to less centralisation of initiatives, services, vendors and so on? What are the main implications for company operations and performance?
13.
What are the typical attrition rates for nurses and other ancillary staff for most skilled nursing and rehabilitation centres? How would you evaluate major players’ efforts to retain qualified employees?
14.
How detrimental are vaccine mandates to labour challenges? What kind of profitability impact can these mandates have on Genesis and other operators?
15.
Can Genesis pull any variable cost levers to save cash and preserve margins as they weather headwinds from coronavirus and labour pressures? Is there any low-hanging fruit to increase operational efficiency?
16.
How viable are the turnaround prospects for more beleaguered operators such as Genesis? How should we frame restructuring efforts, specifically app
17.
Could Genesis’s new market-driven model mean the outsourcing of housekeeping and dining becomes a more localised decision? How are you assessing the centralised vs decentralised dynamics on primary service offerings for operators?
18.
What would you say is the rough breakdown between operators owning their own facilities and leasing?
19.
Could you discuss competitive dynamics across major operators such as Genesis, Ensign, ProMedica, Golden Living and others? How do you compare those names on facility make-up, relative geographic footprints and overall reputation?
20.
How much importance do patients place on CMS [Centers for Medicare and Medicaid Services] star ratings when choosing facilities? How do you evaluate the larger operators on these kinds of quality metrics?
21.
How could consolidation dynamics evolve over the next year or so? Could aggregation accelerate due to pandemic headwinds straining the balance sheets of regional operators?
22.
Which players could become increasingly acquisitive? Which beleaguered names could become take-out targets at attractive multiples?
23.
Do you expect more SNF operators to go out of business in today’s environment? Are any operators of particular concern?
24.
Could you discuss the scenario implications if more stimulus is allocated to the harder-hit operators? What could happen if stimulus isn’t received by the more beleaguered players given the ageing population and sustained long-term demand for senior care?
25.
Is anything else especially important to highlight around Genesis Healthcare and the SNF market?
26.
What’s your 12-18-month outlook for Genesis Healthcare and the SNF market? How could volumes trend and what are the turnaround prospects for SNF operators?
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