Top 10 Nursing Home Chains

NOTES & INSIGHTS

    These ten chains represent in various unique ways much of the past quarter century of the contemporary nursing home system. The two largest chains – The Ensign Group and the PACS Group – signal what we can expect in the next quarter century. They stand out not only for their size but for the financial model they represent.  Both have been heavily influenced by the BYU Marriott School of Business, where their founders and executives taught. This shared lineage has produced a distinctive approach to nursing home operations: public listing on the NASDAQ, decentralized management, aggressive acquisition, and highly optimized capital structures.

    Roy Christensen, founder of The Ensign Group, launched Beverly Enterprises in the 1960s, soon after joined the BYU faculty, and returned to the industry in 1999 to found Ensign.  By 2007, he had taken the company public.  Today, Ensign is one of the most aggressively valued healthcare stocks on the NASDAQ, reflecting investor enthusiasm for its growth model and its ability to extract returns from a government regulated sector.

   Three beneficial owners – Vanguard, Black Rock, and State Street – own nearly 50% of the 52 million shares of outstanding Ensign stock. These two chains are not simply large – they are reshaping the industry’s financial DNA.

WHY THIS MATTERS

• The largest chains set the tone for regulatory strategy and market behavior.
• Their ownership structures influences staffing and financial transparency.
• The rise of BYU-influenced chains signals a shift toward more financially      engineered models.
• Policymakers, journalists, and advocates need a clear map of who controls the system.

FROM THE EDITOR

    This bulletin inaugurates a new series designed to give policymakers, journalists, advocates, and professionals a clearer view of the corporate structure of the U.S. nursing home industry.  Each issue will present one piece of the landscape – reliable data, brief analysis, and a few notes on why it matters.

    Given that 69% of Medicare and Medicaid licensed nursing homes belong to one of the 619 chains, we begin with the largest chains.  Their scale alone shapes market behavior, and presents challenges to regulatory strategy, experiences of workers, and financial transparency.  Two of the fastest-growing companies – The Ensign Group and the PACS Group – represent a new financial model in the industry influenced significantly by the BYU Marriott School of Business. Their emergence in the government funded long-term care industry signals a shift toward a highly sophisticated and complex integration of real estate, insurance, finance, and public capital in the nursing home space.

    Understanding the biggest chains is a first step to grasping the movement of the industry’s financial and service mode of operating thus far into the 21^st Century and it impact on vulnerable nursing home populations into the future.  This series will map the system, piece by piece.

David E. Kingsley, PhD