With Current Operating Costs, 40% of Nursing Homes Could Shut Down in Six Months or Less

August 13, 2020

The costs of operating a skilled nursing facility have increased significantly during the COVID-19 pandemic, and a new survey from the nursing home trade group American Health Care Association indicates that providers may not be able to keep up with them much longer.

The survey, which drew from the responses of 463 nursing home providers from August 8 to 10, found that 72% cannot sustain operations at the current pace for another year, while 40% said they would last less than six months.

Fifty-five percent of respondents reported to AHCA that they are currently operating at a loss, and 97% of nursing homes have lost revenue because of COVID-19, the survey indicated.

“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,” AHCA said in its announcement releasing the results of the survey.

Specifically, PPE supplies were the top costs related to the ongoing COVID-19 response for 95% of providers, while staffing expenses and testing followed at 78% and 74% respectively.

Read more in Skilled Nursing News.