Financial and Quality Metrics of A Large, Publicly Traded U.S. Nursing Home Chain in the Age of Covid-19.

ABSTRACT

Nursing homes faced serious challenges with large COVID-19 resident infection rates and deaths during the pandemic. This descriptive case study examined the structure, operations, strategies, care outcomes, and owners of The Ensign Group Inc. the second largest U.S. for-profit chain, between 2007 and 2021. Ensign, as a holding company, has a complex organizational structure that uses more than 430 corporate entities to manage its 228 nursing homes and senior living facilities. With mostly Medicare and Medicaid revenues and favorable government COVID-19 relief, Ensign grew rapidly, even during the pandemic, to $2.5 billion (all amounts in U.S. Dollars) in revenues with a market capitalization of $4.5 billion and strong profits and financial metrics in 2020 to 2021. The company used real estate purchasing, debt financing, and spin-off companies, and tax arbitrage to optimize shareholder value. Before and during the pandemic, its 198 nursing homes had low registered nurse and total nurse staffing levels and regulatory violations with below-average ratings, and they had high COVID-19 infection rates during the pandemic. Ensign's small board, executives, and institutional investors protected and enhanced shareholder interests rather than ensuring that its nursing homes met professional standards and regulatory requirements.