Assisted Living Facilities
We have years of experience in this industry for the valuation of the business, equipment and real estate. Let us help you with our valuation consultation in all areas of the valuation of assisted living facility/retirement communities and continuing care retirement center (CCRC) businesses. Below is a brief synopsis of the industry.
Description of Business
An institution for the care of patients that require assisted living.
General Industry Information
The nursing care industry in the US includes about 30,000 companies with combined annual revenue of $100 billion that operate 60,000 nursing facilities. About 10,000 companies are nonprofit, generally affiliated with churches, charities, and local governments. Large for-profit companies include Beverly Enterprises and Sun Healthcare Group. Nursing homes are a cheaper alternative to long-term hospital care. The profitability of nursing facilities depends greatly on efficient operations, because revenue per patient is largely controlled by the large government insurance programs, Medicare and Medicaid. The majority of companies operate a single facility, with average annual revenue of $1 million, but about 600 operate ten or more facilities. Large companies tend to run larger facilities that have economies of scale in purchasing and staffing, with average annual revenue of $3 million.
The industry includes skilled nursing facilities for recovery from acute or chronic medical conditions, mental health and substance abuse facilities, and various types of community care and assisted living (AL) arrangements. A wide array of healthcare and dependent-care services are provided, ranging from expensive 24-hour nursing care to help with daily living tasks such as bathing, eating, and dressing.
Red Flags and Risks
The profitability of the industry is determinate on the elderly population. Without a large elderly population, there is not much business for assisted living centers. Another problem for the industry is being able to afford the increasing costs of technology. Because many firms within the industry are non-profit or state-run, expenses are paid by various sources such as Medicaid, the participants, donations, grants, and private long-term care. This means that the success of the industry in dependent on continued funding from outside sources. Because there are constant advances in the medical field, adequate funding is required to afford the equipment, personnel and other expenses in order to keep the facilities in operation.
Have a Question? Contact Us!
We will try to answer you within the next 24 hours