U.S. Nursing Homes Facing Financial Woes due to COVID-19

Aug 13, 2020 at 10:45 am by WGNS


Nursing homes around the country are experiencing significant problems with finances due to the COVID-19 Pandemic.

An executive summary released by the American Health Care Association and the National Center for Assisted Living shows that 55% of nursing homes are operating at a loss now (nearly 90% at a razor thin margin or loss) with 72% saying they won’t be able to sustain operations another year at the current pace. 

Reports indicate this has been largely driven by the increase in costs responding to COVID-19 (personal protective equipment (PPE), additional staffing and testing) and Medicaid’s underfunding, which only covers 70 to 80% of the actual cost of care. 

EXECUTIVE SUMMARY

Survey of 463 U.S. nursing home providers, August 8-10
U.S. NURSING HOMES FACING FINANCIAL CRISIS

  • 55% of nursing homes are operating at a loss (89% operating a profit margin of 3% or less).
  • Nearly 60% of funding for nursing homes comes from Medicaid (which only covers 70 to 80% of the actual cost of care).
  • 72% of nursing homes said they won’t be able to sustain operations another year at the current pace (40% said less than six months). 

COVID-19 RESPONSE HAS SIGNIFICANTLY INCREASED COSTS WITH SHARP DROP IN REVENUE

  • PPE supplies (90%), staff hero pay (78%) and additional staff (46%) are driving significant cost increases for nursing homes. 
  • Nursing homes say their top costs in continued response to COVID-19 include PPE supplies (95%), staffing (78%) and testing (74%).

 
IMPORTANCE OF CONTINUED GOVERNMENT SUPPORT

  • 96% have received some government funding (82% federal, 52% state).
  • Nearly 60% will experience significant problems with increased costs and lost revenue when government funding ends.
  • 93% said government funding is very important to helping with COVID-related costs and losses.

 

 

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