Introduction
Every business faces challenges, but in the healthcare industry, setbacks can be particularly high-stakes. From financial downturns to regulatory changes, long-term care providers must navigate a complex and often unpredictable landscape.
Paul Contris, with 40 years in the industry, has led multiple healthcare organisations through both growth and hardship. One of the biggest challenges he faced was the 2015–2019 downturn in the long-term care sector, which led to the restructuring of Welcov Healthcare. Instead of resisting change, Paul took a strategic and measured approach to restructuring, ensuring a smooth transition for employees and residents.
In this blog, you will learn how healthcare businesses can navigate setbacks, restructure effectively, and emerge stronger.
The Reality of Industry Setbacks
No business is immune to setbacks, and the healthcare sector presents unique risks:
- Declining occupancy rates – Many long-term care facilities saw occupancy drop quarter after quarter from 2015 to 2019.
- Financial pressures – Reimbursement changes, rising operational costs, and labour shortages placed significant financial strain on the industry.
- Regulatory challenges – Compliance requirements continued to evolve, increasing operational complexity.
During this period, many top nursing home chains filed for bankruptcy or underwent major restructurings. Rather than wait for financial pressures to escalate, Paul Contris and his team took proactive steps to manage the crisis.
The Welcov Healthcare Restructuring: A Case Study
Welcov Healthcare, under Paul’s leadership, had expanded to 58 locations across multiple states. However, the broader industry downturn made sustaining operations increasingly difficult. In March 2018, Paul worked with a restructuring firm, Configure Partners, LLC, to explore possible solutions.
Key Steps in the Restructuring Process
- Assessing the Situation Honestly
- Instead of denying financial realities, Paul and his team conducted a detailed financial review.
- They evaluated which facilities were financially viable and which needed restructuring or transition.
- Exploring Lease Restructuring and Alternative Solutions
- The initial focus was on renegotiating lease agreements to improve financial stability.
- When lease restructuring was not a viable solution, they sought responsible transition plans for the facilities.
- Ensuring a Smooth Transition for Residents and Employees
- Paul prioritised a strategic and orderly transition, ensuring that new operators could maintain quality care.
- Employees were given clear communication about the changes and support during the transition.
- Maintaining Leadership and Reputation
- Throughout the restructuring, Paul led with transparency, communicating with stakeholders, employees, and healthcare partners.
- Rather than allowing the situation to spiral into a crisis, he focused on responsible decision-making and long-term solutions.
By February 2019, the transition of facilities to new operators was complete, allowing for an orderly restructuring rather than a chaotic shutdown.
Lessons for Healthcare Entrepreneurs
Paul’s experience offers valuable lessons for business leaders facing industry setbacks:
- Be Proactive, Not Reactive
- Waiting too long to address financial issues can limit available options. Early intervention is key.
- Focus on Long-Term Sustainability
- Short-term cost-cutting may offer relief, but businesses must develop a strategy for long-term financial health.
- Put Residents and Staff First
- During transitions, clear communication and stability for employees and residents should be a priority.
- Seek Expert Guidance
- Partnering with financial advisors and restructuring specialists can help businesses make informed decisions.
- Reputation Matters
- How a business handles setbacks and transitions affects its reputation in the industry. Integrity and transparency are crucial.
Conclusion
Setbacks are an inevitable part of running a healthcare business, but how leaders respond to them determines their long-term success. Paul Contris’ approach to strategic restructuring ensured that Welcov Healthcare navigated a challenging period responsibly, minimising disruption for employees and residents.
For healthcare entrepreneurs, the key takeaway is this: difficult decisions must be made with a focus on sustainability, integrity, and the well-being of those affected. A well-planned restructuring is not the end of a business—it can be the foundation for future opportunities.