A vast majority of nursing home operators don’t believe they’ll be able to sustain operators for another year if current conditions caused by the public health crisis continue. That’s according to results of a new survey released Thursday by the American Health Care Association/National Center for Assisted Living.
In addition, 40% of providers said they’ll be able to sustain operations for less than six months. Fifty-five percent said they’re operating at a loss, while 89% are operating at a profit margin of 3% or less.
“This has been largely driven by the increase in costs responding to COVID-19 personal protective equipment, additional staffing and testing) and Medicaid’s underfunding, which only covers 70% to 80% of the actual cost of care,” AHCA/NCAL said in a statement.
Several operators have reported tough conditions for providers amid the pandemic. This week, Genesis HealthCare executives questioned its ability to operate in the near future during its second-quarter earnings call. Its lost revenue and increased expenses for the quarter totaled $213 million.
A majority of providers also reported that their top costs have been for PPE supplies, staffing and testing.
They also stressed the importance of continued government support, with 93% saying government funding is very crucial to helping with COVID-related costs and losses.
Additionally, 96% of providers said they’ve received some government funding, and about 60% said they’ll experience significant problems with increased costs and lost revenue when government funding ends. The Trump administration announced an additional $5 billion in relief funding for nursing home providers in late July.