John O’Connor

New survey numbers from the American Health Care Association paint an industry portrait that is anything but flattering. Shocking might be more like it.

Here are the, ahem, highlights:

•  Almost nine in 10 facilities have profit margins at or below 3%.

•  More than half (55%) are losing money.

•  Nearly  three-in-four (72%) will be out of business in a year if current trends continue.

•  Make that out of business in half a year for 40%.

Those are the kinds of takeaways that can indeed take an industry away.

Look, this has always been a tough business. But an unexpected pandemic has made things dramatically worse, in record time. Cost increases for personal protective equipment have been astronomical. Meanwhile, the number of arriving residents has slowed to a trickle.

Even the math-challenged among us can see that reduced revenues and increased costs are bad for business. This survey fills in the blanks.

Some outside the industry might take issue with these findings. This survey is, after all, hardly the work of an impartial third party. Critics might add that the timing is a bit convenient as well, seeing as Congress is in the midst of pandemic-relief negotiations. 

Well then, let’s assume for the sake of argument that those critiques are spot on. Further, let’s even concede the numbers might be slightly off. In fact, just for grins, let’s even allow that that the true carnage is only half as bad.

Once those points are conceded and we take a fresh look at the numbers, it quickly becomes apparent the situation for nursing homes is actually … well … still dreadful.

Conversely, let’s take the position that the reported survey numbers are reasonably in line with a reality that exists not just at the 463 responding nursing homes, but at most facilities nationwide. In that case, yikes!

If that second scenario is anywhere near accurate, operators should be petitioning lawmakers for help as never before. For without billions of dollars in additional relief, many operators might soon be asking themselves this soul-searching question:

Now that my career in long-term care no longer exists, what should I do now?

John O’Connor is the Editorial Director for McKnight’s.