Survey of Nursing Homes Shows Significant Cost Increase and Financial Hardship in Response to COVID-19

AHCA recently released a national survey of long-term care providers showcasing the increased costs and financial hardship that nursing homes are facing in response to COVID-19.

Click HERE to view the survey.

The key takeaways are a majority (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. 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.

The executive summary is below:

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.
Posted in COVID-19