Nursing homes are in a world of hurt
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A new study concludes that the nation’s nursing homes are in danger of going out of business, and not because there aren’t enough senior residents to go around. Indeed, there are so many seniors with special needs these days that many retirement communities have waiting lists, and there's a building boom in many parts of the country. So what's happening? Good question.
The Moran Company survey, commissioned by the Washington, D.C.-based American Health Care Association, finds that skilled nursing communities, which operate on an average margin of 0.75 in the first place, have been hard hit by government funding reductions, to the point where any additional cuts now on the floor of Congress could restrict access to the facilities and send seniors out into the cold.
If that happens, warns the AHCA, expect more emergency room visits, more out-of-pocket payments by seniors already on unfairly fixed incomes and, of course, a heavier burden on the taxpayer.
Congress has taken aim at the Medicare physician fee schedule – the so-called “doc fix” – as an easy target for trimming billions off the bottom line. But included in that are allotments for skilled nurses and facilities. With margins as tight as they are, the Moran report concludes many of those facilities will find it impossible to keep operating if the cuts continue.
Meanwhile, the handful of publicly traded players in the field -- such as Brookdale Senior Living (NYSE: BKD), Skilled Healthcare Group, Inc. (NYSE: SKH), and Sunrise Senior Living, Inc. (UNKNOWN: SRZ.DL) -- will join the thousands of small, independent nursing homes that are keeping a watchful eye on Washington.
"Selling to Seniors" editor Buzz McClain owns no stocks mentioned in this story.