State Spotlight: Wisconsin - The Atrium & North Shore Story
I'll be taking a deeper look at a new state every month. This month it's Wisconsin.
North Shore which is the biggest operator in the state is asking for buyers to come forward. Word on the street is that they're asking for a ridiculous price and have not had a single buyer bite.
Let's take a look at where they came from.
The Atrium Disaster
Atrium Health & Senior Living was a New Jersey-based company that owned 33 facilities across Wisconsin and Michigan. In 2014, Kevin Breslin bought 22 Atrium companies from Larry Rice and his family, financed by MidCap Funding.
Here's where it gets juicy: Breslin and his crew were basically running a Ponzi scheme. They were diverting millions in Medicaid and Medicare funds from the Wisconsin facilities to make "guaranteed payments" to the Atrium owners in New Jersey, regardless of what the facilities actually needed.
Kevin Breslin and KBWB Operations (doing business as Atrium Health & Senior Living) pleaded guilty in federal court in December 2024 and January 2025 to healthcare fraud and tax conspiracy charges. They're facing up to 10 years in prison for healthcare fraud and 5 years for tax conspiracy.
The Numbers: From 2015-2018, Atrium billed Medicare for $189 million (received $49 million) and Medicaid for $218 million (received $93 million). Instead of using that money for resident care, Breslin diverted $37 million in "guaranteed payments" to Atrium owners in New Jersey, plus over $20 million to investors financing New Jersey construction projects.
The Horror Show: While New Jersey owners got guaranteed returns, Wisconsin residents had shortages of clean diapers, inadequate wound care supplies, and broken medical equipment. Vendors weren't paid, so facilities lost physical therapy services, fire alarm monitoring, phone/internet service (preventing staff from accessing medical records or getting prescription orders).
Employee Theft: Breslin withheld health insurance premiums from employee paychecks but never paid the insurance company - employees thought they had coverage until claims got denied in March 2018. Same with 401k contributions and tax withholdings that never made it to the IRS.
I mean stealing from the Gov is bad and illegal and you should not do it but stealing from employees health insurance? Wow.
Atrium was also withholding taxes from Wisconsin staff paychecks without paying the IRS. By September 2018, they owed MidCap over $13.5 million and the whole thing collapsed into receivership.
Enter North Shore Healthcare from Glendale, Wisconsin. They'd already made their name buying distressed properties - in 2017 they took over 25 facilities from Fortis Management Group when that company went under.
North Shore swooped in and bought 22 of the remaining Atrium facilities for an undisclosed amount in December 2019 (i.e. a steal she'bi'steal). They'd been competing with Atrium for referrals and employees, so they knew the market well.
Just goes to show when a company explodes from 1 home to like 700 in 18 months there's definitely a story about someone screwing up royally.
North Shore's Ridiculous Growth
Started from Almost Nothing: North Shore Healthcare was founded in 2015 by Jeffrey Hoehn and Troy Baumann with just 2 properties. David Mills became CEO and has a 30-year background including senior positions at Beverly Enterprises, Golden Living, and Villa Healthcare.
Growth by Acquisition Strategy: They figured out the receivership game early:
2017: Took over 28 facilities from Fortis Management Group (which had bought 65 facilities from Canada-based Extendicare for $870 million in 2015, then went into receivership two years later - ouch)
2019: Bought 22 facilities from the Atrium disaster
2025: Now operates 70+ facilities across Wisconsin, Minnesota, Michigan, and North Dakota
The Secret Sauce: Mills calls it the "regional density strategy" - when you have multiple facilities in the same area, you can create specialized "clusters" for dementia, cardiac, orthopedic care, etc. Plus operational efficiencies and shared staffing. Hmmm somehow we're not convinced. Could it be you just got 2 incredible deals and got to buy over 40 snfs at fire sale prices?
Plus we've heard from chevre in the state that north shore is not doing too well - maybe why they're selling? We don't know and that's unverified rumors but heard from a few people who should know that they grew too quickly, have no real culture, losing staff near constantly and are not profitable on lots of their homes.
Remember if someone tells you they have 100 snfs before you get impressed maybe first check their P and L to see if they're making or losing money. Roughly half of all homes lose money in this country.
The Fortis Disaster
The Setup: Formation Capital (private equity) bought Extendicare's entire U.S. portfolio for $870 million in 2015 - 65 facilities across Wisconsin, Michigan, Minnesota, Oregon, Idaho, and Washington. They created Fortis Management Group to run them.
The Problem: Private equity did what private equity does - leveraged the hell out of the deal, then couldn't make the math work when the industry got tough. After just 2 years, Fortis filed for receivership in July 2017. An employee review on Indeed says it all: "Only in business 2 years, employees never received raises or any type of recognition."
The Collapse: Fortis couldn't pay vendors, landlords, or employees. Michael Polsky (the same receiver who'd later handle Atrium) was appointed to liquidate the company. The 65 facilities were split among 4 operators:
North Shore Healthcare: 28 facilities in Wisconsin
Prestige Care: 12 facilities in Michigan
Villa Health Care: 8 facilities in Minnesota (I believe this is the Villa run by Ben Israel and Mark Berger. They left the state in exasperation a couple years ago. "I am personally familiar with at least two or three operators that I believe are on the brink of insolvency and bankruptcy," CEO of Villa Healthcare Mark Berger said before leaving. "I don't know that they'll go on the record with how badly they're struggling. But they are, and ultimately we're making the decision to exit the state." Villa left Wisconsin at the end of 2022.
A study put together data from the Wisconsin Division of Quality Assurance, which is in charge of administering nursing home surveys. They found that a small region surrounding Milwaukee in the southeastern corner of the state received the highest percentage of recertification surveys with immediate harm or jeopardy for the past three years.
"As a multi-state operator, it's hard to imagine that in some states we do just so well and in some states we do just so poorly," Villa's Berger told SNN. "We have the same operating teams and infrastructure in one state versus the other, so, you will see that disparity usually is driven by dysfunction or a subjective process interpretation by specific regional teams." That's a polite way of saying "Fix your survey issue Wisconsin!"
