Healthcare companies continue to make up a large part of the Business Journal’s annual list of fastest-growing public companies based here, but the industry’s presence is a little less pronounced this year.
Some 14 companies on this week’s list count ties to the healthcare industry—a combination of drug makers, medical device and other product makers, and nursing home and hospital operators.
Together they offer a notable example of how the area’s healthcare industry has held up better than others during the downturn.
Still, this week’s total is down from the 15 healthcare-related companies on the list a year ago.
Another downward trend: Among companies in the top 10, there were two healthcare-related businesses, compared with four a year ago, and seven in 2008 and 2009.
This week also is the first time since 2006 that a healthcare-related company hasn’t topped the fastest-growing list.
Will the slide continue next year?
Federal regulators’ announcement in July that they will cut government payments to nursing homes by an average of about 11% starting this month has the potential to slow the growth of at least two companies on this year’s list: Mission Viejo-based Ensign Group Inc. (No. 23) and Skilled Healthcare Group Inc. of Foothill Ranch (No. 42).
They compete with Irvine-based Sun Healthcare Group Inc., which has about $1.9 billion in yearly revenue and until this year was a frequent member of the fastest-growing list.
Sun last year spun off Sabra Health Care REIT Inc., also in Irvine. Sun now leases many of the nursing homes it operates from Sabra. The spin-off accounts for Sun’s absence from this year’s list.
Acquisitions could counteract some of the regulatory-related slowdown in revenue for the three companies.
Ensign is looking for opportunity amid the recent tumult touched off by the reimbursements cuts, with plans to buy more nursing homes and related businesses, an executive said last month.
—Mark Mueller
Download the 2011 OC’s FASTEST-GROWING PUBLIC COs list (pdf)
