National HealthCare Corporation (NHC): Business Model Canvas [Dec-2025 Updated]

You're digging into the Business Model Canvas for one of the most established senior care providers, and frankly, their structure is fascinating given the current labor market pressures. This company, which runs over 150+ owned and managed facilities across the Southeast, pulls in about $1.50 billion in TTM revenue as of Q3 2025 by owning the real estate and managing the entire care continuum-from skilled nursing to hospice-all tied up with key partners like National Health Investors, Inc. We've broken down exactly how they generate that revenue, which was $382,661,000 in Q3 2025 alone, and where their biggest costs lie, primarily in salaries for their staff, which numbered over 16,000 in 2024. Keep reading to see the precise mechanics of how this integrated model works.

National HealthCare Corporation (NHC) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that keep National HealthCare Corporation (NHC) running, and honestly, the partnership with National Health Investors, Inc. (NHI) is the most financially material one right now. This relationship is under intense scrutiny because the master lease, signed way back in 1991, is set to expire at the end of December 2026.

National Health Investors, Inc. (NHI) for real estate ownership and leasing

This is a classic real estate investment trust (REIT) and operator dynamic, but the terms are reportedly one-sided in NHC's favor, which is why an activist investor is pushing for changes at NHI. You need to know the scope of what's at stake.

As of December 31, 2024, the NHI-NHC master lease covered a specific set of properties, which NHC/OP, L.P., an affiliate, operates. The situation is tense, as NHI issued a formal notice of default in September 2025 to NHC/OP, L.P. for failing to remedy non-compliance with certain non-monetary provisions in that Master Lease Agreement.

Here's the quick math on the portfolio under that lease:

What this estimate hides is the potential rent reset. An activist investor believes NHI could see a 12% increase in annual funds from operations (FFO) per share upon renewal. To put that in perspective, they pointed to a 2024 comparable lease by CareTrust REIT (CTRE) for 3,290 beds at approximately $13,678 per bed, noting that rate was 64% higher than the disclosed NHI rent per bed for the NHC assets. Still, NHC is building financial flexibility; long-term debt was only $129.5 million at the end of Q4 2024, and cash on hand was $111 million as of mid-2025, suggesting they could fund outright purchases by year-end 2026.

Hospital systems for post-acute care patient referrals

Referrals from acute care hospitals are the lifeblood for National HealthCare Corporation's skilled nursing and home health segments. The volume and mix of these referrals directly impact revenue metrics like per diems.

For the quarter ended March 31, 2025, NHC's Medicare per diem increased to $612.13, and total skilled nursing patient days reached 718,136. This operational scale is supported by their physical footprint, which as of December 31, 2024, included 80 SNFs with 10,341 licensed beds.

The national landscape for post-acute care (PAC) destinations shows the competitive environment for these hospital referrals:

• As of October 2023, 18.9% of inpatient discharges went to SNFs.
• In the same period, 17.2% of inpatient discharges received home health care (HHA).
• By Q4 2024, home health referrals saw a modest rise, with 22.6% of inpatient discharges including an HHA referral.

Payors and other post-acute alliances for integrated care delivery

The shift in Medicare payor mix fundamentally changes how National HealthCare Corporation must structure its care delivery alliances. You need to watch the Medicare Advantage (MA) penetration rate closely, as it dictates reimbursement models.

As of February 2025, a significant majority of beneficiaries are under MA plans:

• 55.4% of Medicare beneficiaries were enrolled in Medicare Advantage.
• 30 states now have Medicare Advantage penetration exceeding 50%.

This trend forces alliances toward value-based care models, which is why NHC's focus on quality metrics is key. For instance, as of December 31, 2024, 57% of NHC SNFs were rated 4- or 5-Star by CMS, compared to the national average of 35%.

Third-party healthcare operators for management and accounting services

National HealthCare Corporation is not just an operator; it also acts as a service provider to other entities, which diversifies its revenue streams beyond direct patient care. For the quarter ended March 31, 2025, direct Net Patient Revenues accounted for $361.6 million of the total $373.7 million in net operating revenues, meaning about 96.8% was driven by patient care.

The remaining revenue comes from services like management and accounting provided to third parties. While specific revenue from these management services isn't broken out separately in the Q1 2025 data, the company explicitly states it provides management services, accounting, and financial services to third-party healthcare operators.

Clinical and non-clinical staff, internally referred to as defintely 'partners'

Your clinical and non-clinical teams are the primary resource, and managing their cost is a major driver of margin expansion. National HealthCare Corporation has a substantial workforce.

The company has over 10,000+ Employees. The cost of this labor force has been a major focus, especially given the post-pandemic staffing crisis. For example, agency nurse staffing expenses alone in 2022 totaled $68.9 million, which increased total salary and wage expenses by more than 10% that year. The operating margin has improved significantly since then, rising to 9.4% in Q2 2025 from an average of 6.8% in 2024, partly due to a cooling labor market.

The company's operational success is tied to these internal partners, as evidenced by their quality scores:

• As of December 31, 2024, NHC's 80 SNFs had an average CMS 5-Star rating of 3.6.
• NHC's 34 home health agencies had an average CMS 5-Star rating of 4.35, against a national average of 3.5.

Finance: draft 13-week cash view by Friday.

National HealthCare Corporation (NHC) - Canvas Business Model: Key Activities

You're looking at the core engine of National HealthCare Corporation (NHC), the activities that actually drive the revenue and growth, especially after their big moves in 2024 and into 2025. It's all about volume, acuity, and cost control in a tight labor market.

The primary activity is the direct operation of their care facilities. As of August 1, 2025, National HealthCare Corporation affiliates were operating a portfolio that looks like this:

This scale is the foundation. For the SNFs, the focus is on high-acuity medical and rehabilitative patient care. You see this reflected in their utilization metrics; total SNF patient days in the third quarter of 2025 hit 740,373, up from 673,378 the prior year. The average per diem rate for SNFs in Q3 2025 was $361.42, an increase from $338.86 year-over-year. The core business is showing momentum, with same-facility net operating revenue growth at 8.7% year-over-year in Q3 2025.

A major recent activity was the strategic acquisition of the White Oak Senior Living portfolio, which closed on August 1, 2024, for a purchase price of $221,400,000. This deal immediately added significant capacity:

• 15 skilled nursing facilities, adding 1,928 beds.
• 2 assisted living communities with 48 units.
• 4 independent living communities with 303 units.
• A long-term care pharmacy.

This acquisition was immediately accretive to earnings and cashflow, and it marked National HealthCare Corporation's entry into North Carolina while expanding its footprint in South Carolina.

Managing the cost structure is a constant, critical activity, especially given labor pressures. In the second quarter of 2025, salaries, wages and benefits totaled $226.53M, up significantly from $180.08M in Q2 2024. This pressure caused the EBIT margin to compress sequentially in Q3 2025 to 7.94% from 9.09% in Q2 2025. Aggressively managing labor costs and facility utilization, therefore, is key to margin expansion.

Finally, National HealthCare Corporation supports its core operations by offering other services, which are also key activities:

• Homecare: As of late 2024, their 34 home health agencies achieved an average CMS 5-Star rating of 4.35, well above the national average of 3.5.
• Behavioral Health: The company operates 3 behavioral health hospitals.
• Hospice: They operate 33 hospice agencies as of August 1, 2025.

Finance: draft 13-week cash view by Friday.

National HealthCare Corporation (NHC) - Canvas Business Model: Key Resources

You're looking at the core assets that National HealthCare Corporation (NHC) relies on to run its business as of late 2025. These aren't just line items; they are the engines of their operations, from physical locations to the people who staff them and the cash reserves backing everything up.

The physical footprint is substantial, anchored by an extensive network of owned and managed facilities across the Southeastern U.S. While the outline suggests over 150, the detailed operational count as of late 2025 points to a broader scope of managed entities.

The human capital is a massive resource. As of December 31, 2024, National HealthCare Corporation employed 14,962 partners. This workforce is critical for delivering the continuum of care services they provide.

Financially, the balance sheet remains strong. As of September 30, 2025, National HealthCare Corporation reported $297.383 million in cash, cash equivalents, and marketable securities. This liquidity provides a buffer and capacity for strategic moves.

The real estate component is unique, involving properties leased from National Health Investors, Inc. (NHI), which separates the real estate ownership from the day-to-day management operations, a key structural element for National HealthCare Corporation.

Finally, the operational backbone includes proprietary management and accounting systems. These systems help standardize processes across the diverse portfolio, which is essential for efficiency.

Here is a breakdown of the operational scale, which represents a significant portion of their key resources:

The sheer volume of distinct operational units managed-totaling 185 agencies and facilities based on the sum of the above categories-is a resource in itself, demonstrating geographic reach and service diversification.

You can see the core components that make up their operational strength:

• Extensive network across the Southeastern U.S.
• Skilled clinical and administrative staff.
• Strong balance sheet with $297.383 million in liquid assets.
• Real estate asset base via lease agreements with NHI.
• Proprietary management and accounting systems.

Finance: draft 13-week cash view by Friday.

National HealthCare Corporation (NHC) - Canvas Business Model: Value Propositions

You're looking at National HealthCare Corporation (NHC) and seeing a provider that offers care across almost every stage of senior need. That breadth is a core value proposition, keeping patients within their system as their needs change. Here's the breakdown of what they are offering as of their latest reported figures from early 2025.

Full continuum of care: SNF, Assisted Living, Homecare, Hospice, Behavioral Health

NHC's value is in its scale and diversity of service lines, which allows for seamless transitions for residents. As of the first quarter of 2025, the operational footprint supporting this continuum looked like this:

The company's principal business is the operation of these facilities, including sub-acute and post-acute skilled nursing care, senior living, and home health care services.

High-quality post-acute and long-term rehabilitative services

Quality metrics show NHC facilities generally outperform national benchmarks, which is a key draw for both patients and referral sources like hospitals. For instance, in Q1 2025, Medicare per diem rates showed solid growth, hitting $612.13, up from $581.75 the prior year.

• SNF CMS 5-Star Average (NHC): 3.6 (2024)
• SNF CMS 4- or 5-Star Facilities (NHC): 57% (2024)
• National SNF 4- or 5-Star Average: 35% (2024)
• Home Health Agency CMS 5-Star Average (NHC): 4.35 (2024)
• National Home Health Agency Average: 3.5 (2024)
• Total Skilled Nursing Patient Days (Q1 2025): 718,136

Stability and trust as the nation's oldest publicly traded senior health care company

The longevity of National HealthCare Corporation provides a foundation of trust. The company began business in 1971 and holds the distinction of being the nation's oldest publicly traded senior health care company. This history supports a financially sound operation, as evidenced by their balance sheet as of March 31, 2025, showing total assets at $1.55 billion and cash, cash equivalents, and marketable securities at $243.2 million. Furthermore, the commitment to shareholders is shown through a conservative dividend payout ratio of 39.03% for the year 2024.

Integrated care model keeping patients within the NHC system

The integration is physically demonstrated through strategic growth, such as the August 1, 2024, acquisition of White Oak Management, Inc., which immediately added 22 healthcare operations to the portfolio, including 15 SNFs and 2 ALFs. This model aims to capture revenue across the entire post-acute spectrum. For Q1 2025, Net Patient Revenues accounted for $361.6 million of the total $373.7 million in net operating revenues, showing that about 96.8% of the business is driven by direct patient care services.

Specialized Alzheimer's and memory care units

NHC's business explicitly includes providing memory and Alzheimer's care. They market a unique approach called The MINDful Way™, which focuses on five pillars for dementia care, including validating emotional experience and integrating life history into daily activities. This specialized offering addresses the high acuity trend in the sector, where cognitive decline diagnoses are happening earlier.

The demand for these specialized services is clear, with the Alzheimer's Association estimating 6.9 million Americans living with Alzheimer's or other dementias as of early 2025.

Finance: draft 13-week cash view by Friday.

National HealthCare Corporation (NHC) - Canvas Business Model: Customer Relationships

High-touch, long-term personal care for residents and patients is the core of National HealthCare Corporation's relationship strategy. This is evidenced by quality metrics that stand above the national benchmarks.

As of December 31, 2024, National HealthCare Corporation's skilled nursing facilities (SNF's) registered an average Net Promoter Score (NPS) of 60.0. This compares favorably to the national health care average of 38.0. Furthermore, 57% of National HealthCare Corporation's SNFs were rated 4- or 5-Star by the Centers for Medicare & Medicaid Services (CMS), significantly higher than the national rate of only 35% of skilled nursing facilities achieving that rating. For home health services, National HealthCare Corporation's 34 home health agencies posted an average CMS 5-Star rating of 4.35, against a national average of 3.5.

The scale of operations managed by National HealthCare Corporation necessitates dedicated clinical staff providing continuous care across service lines. As of the first quarter of 2025, National HealthCare Corporation affiliates operated 80 skilled nursing facilities with 10,329 beds, 26 assisted living communities with 1,413 units, and nine independent living communities with 777 units. This direct care infrastructure is supplemented by 34 homecare agencies and 33 hospice agencies.

The direct sales and admissions teams manage placement into this extensive network. The total net operating revenues for the trailing twelve months ending September 30, 2025, reached approximately $1.50 billion. For the quarter ended March 31, 2025, net operating revenues were $373,697,000.

Management service contracts with third-party operators represent a key relationship channel, often involving a fee structure based on performance.

Patient and family engagement through facility-based programs is measured through satisfaction scores, reflecting the success of these interactions. The high Net Promoter Score indicates a strong likelihood of recommendation from patients and families.

• SNF Average Net Promoter Score (NPS) as of December 31, 2024: 60.0
• National Health Care Average NPS: 38.0
• Percentage of SNFs rated 4- or 5-Star by CMS (Dec 2024): 57%
• Home Health Agencies rated 4- or 5-Star by CMS (Dec 2024): 94%

The company's focus on quality care ratings is a direct investment in the long-term relationship with the patient base.

National HealthCare Corporation (NHC) - Canvas Business Model: Channels

You're looking at how National HealthCare Corporation (NHC) gets its services in front of patients and clients across its integrated care continuum. The channels are primarily the physical locations where care is delivered, supplemented by professional referral networks and direct outreach.

The physical network forms the backbone of National HealthCare Corporation's channel strategy, allowing them to offer a full spectrum of post-acute and senior care services, which is key to keeping patients within the NHC system.

Here is the breakdown of the physical assets that serve as primary delivery channels as of August 1, 2025:

The SNF channel, being the largest by bed count, shows strong performance metrics that reflect the effectiveness of this channel in attracting and retaining patients. For instance, the average CMS 5-Star rating across these 80 SNFs was 3.6, with 57% of facilities rated 4- or 5-Star by CMS, significantly above the national average of 35%. Also, the average Net Promoter Score (NPS) for NHC SNFs was 60.0, compared to the national healthcare average of 38.0.

For in-home services, National HealthCare Corporation utilizes a network of agencies to deliver care outside of its facility walls. This addresses the growing preference for aging in place.

• Homecare Agencies: 34 agencies
• Hospice Agencies: 33 agencies

The quality channel for homecare agencies is also statistically strong; the 34 home health agencies had an average CMS 5-Star rating of 4.35, against a national average of 3.5.

Beyond the owned and operated facilities, National HealthCare Corporation uses referral sources and direct outreach to fill beds and secure patient volume. These are critical soft channels that feed the physical network. The primary mechanisms for patient acquisition are:

• Hospital discharge planners: Key professional referral source for post-acute and skilled nursing admissions.
• Direct-to-consumer marketing: Efforts targeting seniors and families seeking assisted living, independent living, or in-home services.
• Management Fee Income: Providing management and accounting services to eight third-party facilities, which serves as a channel for relationship building and potential future acquisitions.

The success of these referral channels is reflected in the operational volume; for example, total SNF patient days expanded to 729,519 in the second quarter of 2025. This volume is directly tied to the effectiveness of the referral and direct marketing channels feeding the SNF beds.

National HealthCare Corporation (NHC) - Canvas Business Model: Customer Segments

The customer base for National HealthCare Corporation (NHC) is segmented across the continuum of post-acute and long-term care needs, heavily influenced by the payer source that funds the care delivery.

Post-acute patients requiring short-term skilled nursing and rehabilitation represent a core, high-acuity segment. This group drives the higher-reimbursement Medicare revenue stream. For the quarter ended September 30, 2025, total skilled nursing patient days reached 740,373. You can see the payer mix impact on per diem rates, which is critical for this segment.

Long-term care residents needing continuous medical and custodial support form the foundation of the stable, recurring revenue base, often funded by Medicaid or private pay.

The operational scale supporting these segments as of the first quarter of 2025 filings includes:

The patient mix utilizing National HealthCare Corporation facilities is directly tied to government and commercial payers. The financial performance of the skilled nursing segment is highly sensitive to the rates negotiated with these entities.

Patients utilizing Medicare, Medicaid, and Managed Care insurance are the primary payers for the inpatient services. The revenue quality is clearly visible in the per diem rates achieved:

• Medicare per diem increased to $612.13 in Q1 2025 from $581.75 the prior year.
• Medicaid per diem rose to $281.67 in Q1 2025 from $265.27.
• The overall average skilled nursing per diem was reported at $361.42 for Q2 2025.

It's important to note that while volumes were robust, the Managed Care per diem dipped in Q3 2025 due to delayed quality incentive payments, even as ex-incentives MA per diem grew by 2.7% year-over-year.

Seniors seeking assisted living or independent living residential care are served through the AL and IL communities, which are part of the inpatient services segment. Net operating revenues for this entire segment were strong, with Q3 2025 net operating revenues hitting $382.661 million, with Net Patient Revenues accounting for about 96.8% of the total $373.7 million in net operating revenues for Q1 2025.

Third-party healthcare facility operators for business services form a smaller, yet strategic, customer segment. National HealthCare Corporation provides management and accounting services fees to these external operators. This segment falls under the "all other" category, which also includes rental income and insurance services, helping to diversify the revenue base beyond direct patient care.

National HealthCare Corporation (NHC) - Canvas Business Model: Cost Structure

You're looking at the core spending that keeps National HealthCare Corporation (NHC)'s facilities running, which is heavily weighted toward personnel and property. Honestly, in this industry, labor and real estate are almost always the biggest line items, and the numbers from late 2024 confirm that trend for National HealthCare Corporation (NHC).

Salaries, wages, and benefits (largest cost driver)

This is the engine room of the cost structure. For the fourth quarter ended December 31, 2024, salaries, wages, and benefits for National HealthCare Corporation (NHC) reached $234.32 million. This was a significant jump compared to the $186.56 million reported for the same period in the prior year, reflecting both industry-wide cost pressures and the expanded footprint from acquisitions like White Oak Manor.

Facility operating expenses (utilities, supplies, maintenance)

These are the day-to-day costs to keep the lights on and the care flowing. While a single, consolidated figure for all utilities, supplies, and maintenance across all operations isn't explicitly itemized in the same way as labor, the broader category of Total Operating Expenses for the full year 2024 was $410.69 million. Other operating expenses, which would encompass many of these items, totaled $91.94 million for Q4 2024.

Rent and lease expenses for real estate holdings

Leasing arrangements form a substantial part of the fixed cost base. For the first quarter ended March 31, 2024, National HealthCare Corporation (NHC) reported facility rent expenses of $77,429,000. This figure is separate from other operating costs and represents the base commitment for their leased properties.

Here's a quick look at some of the key expense components based on the latest available quarterly and annual figures:

Costs associated with integrating strategic acquisitions

The August 1, 2024, acquisition of the White Oak portfolio, which added 22 healthcare operations, immediately impacted the cost base through expansion and integration efforts. While specific integration costs are not isolated, the growth in Total Operating Expenses reflects absorbing these new operations. The company also records operating results for newly opened operations not yet at full capacity, which was a factor in 2024 results.

Regulatory compliance and insurance costs

National HealthCare Corporation (NHC) manages a significant portion of its risk internally. The company owns a Tennessee domiciled insurance company that provides workers' compensation coverage for substantially all of its owned, leased, and managed healthcare facilities as of December 31, 2024. This structure centralizes a key compliance and risk management cost.

The cost structure also includes other significant, though less granularly detailed, items:

• Depreciation and amortization for the year ended December 31, 2024, was a material non-cash charge.
• Interest expense for Q1 2024 was $10,048,000.
• General and administrative expense for Q4 2024 was $11.33 million.

Finance: draft 13-week cash view by Friday.

National HealthCare Corporation (NHC) - Canvas Business Model: Revenue Streams

You're looking at the top-line numbers for National HealthCare Corporation (NHC) and seeing solid growth, which is what we expect from a company with this kind of operational footprint. The revenue streams are heavily concentrated in direct patient care, which is the core of the business, but the diversification across different care settings helps smooth out any payer mix volatility.

The most recent quarterly data confirms this concentration. For the third quarter of 2025, National HealthCare Corporation reported net operating revenues of $382,661,000. This figure reflects both organic momentum and the impact of strategic growth moves, like the White Oak acquisition.

To break down where that revenue comes from, looking at the first quarter of 2025 gives us a clear picture of the revenue composition. Net Patient Revenues from direct services were the overwhelming driver, accounting for approximately 96.8% of the total Q1 2025 revenue base. The remaining portion comes from other ancillary and management services.

The revenue generation is directly tied to the scale of National HealthCare Corporation's operations as of late 2025. Here's a look at the physical and service capacity that underpins these revenue streams:

The direct patient revenue stream is segmented by payer, which is crucial for modeling cash flow stability. You'll see the mix is heavily influenced by government programs, but private pay remains a vital component for higher-margin services.

• Net Patient Revenues from direct services (approx. 96.8% of Q1 2025 revenue)
• Medicare and Medicaid reimbursements for skilled nursing care
• Private pay revenue from assisted and independent living residents

Also, don't forget the smaller, but still important, revenue sources that support the core operations. These are the other revenues from pharmacy, rehabilitation, and management services, which provide service diversification.

For example, the Q1 2025 breakdown shows that Net Patient Revenues were $361.6 million out of total net operating revenues of $373.7 million. This leaves the other revenue streams-pharmacy, rehab, and management services-contributing the remaining $12.1 million in that quarter. Finance: draft 13-week cash view by Friday.