Five Star Senior Living (NYSE: FVE) has officially exited the skilled nursing business as part of a wider plan to shift its focus toward independent living and active adult properties, the company announced on Thursday.
The Newton, Mass.-based Five Star announced back in April that it would close or transition skilled nursing units at all of its continuing care retirement communities (CCRCs), for a total shed of 1,500 units, in a process expected to conclude by the end of 2021.
“We have been successful in repositioning our management business to focus on our operational strengths at larger senior living communities and target active, older adult customers by transitioning 107 DHC owned communities to other operators and closing one community and approximately 1,500 skilled nursing facility living units to fully exit the skilled nursing business,” said Katherine Potter, Five Star president and CEO in a press release.
“In the coming months, we expect to turn our attention to efforts to enhance the resident experience at our communities and develop a cost-efficient and scalable platform to support our operations and drive growth,” Potter added.
Five Star also said it would continue its investment in Ageility, the company’s rehabilitation and wellness services segment, which serves roughly 14,600 older adult customers in 223 outpatient clinics across 28 states.
The move also included the offloading of 107 senior living communities owned by real estate investment trust (REIT) landlord Diversified Healthcare Trust (Nasdaq: DHC).
Five Star now operates 140 senior living communities, either managed or owned, with about 20,000 units, located in 28 states.
The talk of a partial or complete exit from the skilled nursing space has been ongoing for Five Star, with former CEO Bruce Mackey noting occupancy declines and reimbursement pressures back in 2018.
Mackey said at the time that efforts by accountable care organizations (ACOs) and managed Medicare programs resulted in shorter lengths of stay for patients, and therefore resulted in a move toward home-based care over skilled nursing.
Companies featured in this article:
