A new company from HealthSwap Advisors is looking to bring transparency and efficiencies to the buying and selling of health care bed licenses.
Launched last year, the Bed License Exchange is a marketplace that allows investors and operators to buy and sell these licenses in a confidential, auction-style platform.
“Up until this point, bed license availability and pricing has been somewhat hidden in the industry,” Brandon Bohland, co-founder and CEO of Bed License Exchange, said in a statement. “We hope this solution will provide the industry with more transparency, allowing the investors and operators to see the fair market value of bed licenses being traded in the market.”
Buyers have the ability to search based on geography, price, and care setting, and use the platform to acquire the licenses. Providers who are looking to build new facilities or expand current communities often run into challenges in Certificate of Need (CON) states, where there are limits on the number of beds available.
“You can’t just call up the state and say: ‘I want to build a new skilled nursing community,’” Bohland said during an interview with Skilled Nursing News. “You can do that for independent living or memory care, but in the CON states, they don’t typically hand out beds.”
These laws are common, with 34 states having some type of CON program and three more having CON variants, according to a report from the National Conference of State Legislatures.
Bed licenses can become available for a range of reasons. Sometimes an operator might be renovating a current building, which no longer needs the same number of licensed beds.
For example, if a 100-bed skilled nursing facility composed of semi-private rooms wants to convert them all to private, the operator would have 50 beds that they could list on the exchange to extract some value. The pricing and availability of the bed licenses vary, but often come to market in groups of 30 to 50 at a time, Bohland said.
“We have some people that want to sell two beds and some other REITs that sold 350 beds,” he said.
The price for each license fluctuates based on the demand, but could range anywhere from $3,000 to $50,000 per bed — and beds in states with construction moratoria or CON laws typically command the highest prices, according to Bohland.
Written by John Yedinak