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.
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.