Mainstreet has sold the operations of four Rapid Recovery Centers in Texas to a former executive and his newly formed operations company.
Mark Fritz — the former executive who helped create the “Rapid Recovery Center” model for the Carmel, Indiana-based senior care developer — is the one who purchased the facilities in Fort Worth, Round Rock, San Antonio, and Webster, Texas. His new company, Bridgemoor, now operates the four buildings.
Invesque (OTC: MHIVF), the health care investment firm that spun off from Mainstreet in June 2016, still owns the real estate for the properties, according to Invesque CEO Scott White. The deal officially closed February 1, with the terms of the transaction left undisclosed. SHN’s sister site, Skilled Nursing News, first reported on the deal.
Mainstreet first launched its Rapid Recovery Center format in early 2017. The model was meant to focus on short-term, post-acute rehabilitation residents by creating a luxe, resort-style setting. Mainstreet CEO Zeke Turner originally planned to open 11 Rapid Recovery Centers open in Texas and Arizona in the 18 months of the announcement, with the properties serving representing its first venture into the operations side of the business.
“We think it’s going to be a really important part of our business on a go-forward basis,” Turner told SHN in 2017.
But the fanfare was short-lived, and the company encountered turbulence in its plan in the months and years that followed. By last March, Mainstreet announced it was halting all Rapid Recovery Center development in Arizona and laying off about 70 employees there. Start-up costs for the those facilities ran higher than projections, and that was a major factor in the company’s decision to pull out of the state.
Still, Turner insisted that the company’s operations would proceed as normal in Texas.
“We have three centers open in Texas right now and are scheduled to open five more over the next 12 months,” Turner said last year. “This is already a huge undertaking and commitment, which did contribute to the Arizona decision.”
In an interview with SNN Thursday, Turner classified the handoff as a way for Mainstreet to return to its core focus of real estate development, not operations.
“We really found that our best position in the industry is to be supportive to those operators in helping them grow, and really bringing in those best practices,” Turner said Thursday.
Mainstreet still plans to complete its planned properties in Amarillo, Temple, and Beaumont, Texas, which the company’s website lists as set for a 2019 opening. Still, Turner said the company hasn’t decided whether it will sell the operations or stay in the game after construction finishes.
“We’ll see. Those properties aren’t yet complete,” Turner said. “We’ll see as we get a little closer to completing what, ultimately, the plans are for those properties.”
Turner denied that the company’s troubles in Arizona had anything to do with the decision to sell in Texas, and also praised the Bridgemoor management team, noting that the core operations leadership group will not change.
“They are wonderful operators and wonderful people, and we’re really excited about their opportunity to step into this,” he said.
Fritz, who is now president of Bridgemoor, still has high hopes for his new company’s technology, amenity, and medical care-focused product. While Fritz and the rest of the team at Mainstreet didn’t know about the Patient-Driven Payment Model (PDPM) when developing the RRC model starting in 2016, he noted that the Rapid Recovery model’s focus on short lengths of stay and positive outcomes gels within the new reimbursement system.
“I think we all had a pretty good idea that it was not going to be minute-based therapy reimbursement, and it was going to be a much more coordinated care model,” Fritz said. “As we were training to develop this, we always kept our eye a little bit ahead of the ball, trying to figure out where it may go.”
Turner seconded that notion in explaining the reasoning behind Mainstreet’s decision to sell the facilities’ operations.
“The intention for us, of building an operating platform, was to really set the stage for what could be,” Turner said. “I can’t profess to know that we were going to be in front of a full payment model regulatory change, but we certainly felt like that the industry was moving in that direction, and wanted to take innovative leadership on that path.”
The company has already married its in-house electronic medical records (EMR) system and the Epic platform used by one of its major hospital partners, which will allow acute physicians to monitor residents’ conditions and prevent avoidable rehospitalizations.
“We can manage that patient in place, and that’s becoming, I think, a big asset as we grow and discuss with hospital system,” Fritz said.
Fritz has extensive experience in the post-acute sector. He previously worked as CEO of TRISUN Healthcare and founding Remington Medical Resorts in 2006. Genesis HealthCare (NYSE: GEN) bought Remington in 2015, renaming the properties under the Genesis PowerBack Rehabilitation brand, and Fritz joined Mainstreet the following year.
While Fritz said his new company will explore expansion opportunities, for now, the four-property size fits his current goals as Bridgemoor attempts to integrate with local hospital networks, managed care organizations, and bundled payment systems.
“We really look at our size as our advantage,” Fritz said.
Skilled Nursing News editor Alex Spanko contributed reporting to this story.