Big changes are afoot at Brookdale Senior Living (NYSE: BKD), but the company remains committed to home health and is actively looking to grow its hospice business.
A new CEO is set to take the reins at Brentwood, Tennessee-based Brookdale, which is the largest senior living provider in the nation and is also one of the largest home health companies. Effective Feb. 28, current CFO Cindy Baier will assume the CEO role, replacing Andy Smith.
Baier is tasked with reviving the company’s fortunes after years of struggle. The trouble began with Brookdale’s 2014 acquisition of rival Emeritus Corp., after which it experienced integration woes. More recently, the company has felt the sting of new competition in the senior housing sector.
Throughout these challenges, Brookdale has touted its ancillary services—including home health and hospice—as a valuable asset. Baier reiterated that position on Thursday, after the company announced her promotion to CEO in conjunction with releasing its fourth quarter and full-year 2017 earnings.
“There’s an advantage to being able to deliver ancillary services,” she told Home Health Care News.
Specifically, Brookdale perceives offering a full continuum of care as a differentiator from many of its competitors. That is, a person could live in an independent living or assisted living community, a skilled nursing facility or continuing care retirement community (CCRC), and receive home health and hospice, all from the same company.
Baier—whose own mother received home health and hospice care prior to passing away last year—is especially keen on the hospice opportunity, saying she “definitely” foresees growth in this area.
“It’s so important for our residents, and it’s growing nicely because of how important it is,” she told HHCN.
This echoes what Baier said about hospice in November, when the company announced its third-quarter 2017 earnings. Its hospice operation took in about $17.3 million that quarter. In the fourth quarter, that increased to $18.2 million, according to an earnings document. Home health revenue increased from $87.3 million to $89.3 million over that period.
While she seeks to expand in hospice, Baier is seeking to shrink Brookdale’s senior housing portfolio, selling assets to unlock real estate value. It’s part of a larger turnaround plan, which also includes shifting more decision-making authority and resources from the corporate level to the local level.
Brookdale is moving forward with this strategy after a year-long process of considering strategic alternatives, including buy-out offers. The provider recently rejected the most recent offer, of $9 per share, and ended the formal review process, opting to move forward under the new CEO.
Investors have not immediately embraced this move; BKD shares were down more than 19% at the end of regular trading on Thursday.
While the company remains open to opportunities that could enhance shareholder value, Baier is clear about where her focus lies.
“Our top priority is to turn around our company performance,” she said.
Written by Tim Mullaney