The coronavirus crisis could lead to “financial turmoil” for many nursing home and senior living operators thanks to a combination of higher costs — for things like supplies and increased pay for workers — and the inability to create additional revenue from new residents, a new Moody report found.
“Coronavirus-related material event disclosures filed with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system show that the crisis is hurting the nursing home and senior living sectors more dramatically than any other U.S. public finance sector,” Moody researchers wrote.
The report noted that at least nine elder housing borrowers have drawn from debt service reserve funds, violated their bond covenants, or requested a discussion with bondholders to renegotiate the terms of their debt since March.
Researchers also noted that though some other healthcare-based enterprises are seeing “some pinch” during the economic shutdown, “no other sector has seen the singular confluence of both revenue and expenditure difficulties as the elder housing sector.”
“Depending how the crisis unfolds, a sector that consists mainly of unrated borrowers that are risky even in ordinary times may not have seen the worst of it yet. The first few months of the crisis exposed the weakest borrowers, but many more would be unable to withstand a prolonged period of elevated costs coinciding with an inability to generate new revenues,” the researchers concluded.
In other coronavirus-related news:
The Society for Post-Acute and Long-Term Care Medicaid (AMDA) said universal testing mandates for nursing homes will be counterproductive unless providers also receive additional funding for testing and staffing costs. The group also added that testing decisions must be made by individual facilities based on their understanding of how the disease has spread within their surrounding area and local testing ability.
“Any mandate for universal testing must account for the many important considerations detailed in today’s statement. Testing alone is not enough, and there are no one-size-fits-all solutions,” AMDA Executive Director Christopher E. Laxton said.
He added that plans must be developed with strict attention to clinical case-
finding, screening of staff for symptoms, and visitor restrictions, in addition to the prevention of transmission with universal masking, appropriate use of PPE, and environmental cleaning.
And in brighter news, a New York skilled nursing facility celebrated its 100th patient who’s successfully recovered from COVID-19. The patient’s name was added to the facility’s “Recovery Wall” and she was also greeted to applause as she discharged home.