I do almost exactly as you do. Actually though, I'm not sure I've ever had a decrease in blooms from needing to be divided, except for Stella d'oro. It is my motto to not mess with what is working so I have many large clumps, but sometimes it has to be done. They just start taking up too much space. Some daylilies are just so easy to divide, just washing them off with the hose & they practically fall apart, wish they all were so easy. Others entwine & have to be cut apart. Most fall somewhere in between.
