An economic downturn that is causing convulsions in most states and many businesses has largely avoided the long-term care sector. But that doesn’t mean that operators are breathing easy.
So far, independent living and continuing care retirement communities have been the only players to see a significant downturn in new occupancies. That can be traced directly to a de facto housing sale requirement that many incoming residents must make. For nursing homes, Medicaid and Medicare payments have remained relatively stable. But with many states facing reduced funding from sales and other taxes, it’s increasingly likely that Medicaid budgets will be targeted more aggressively going forward.
“With state budgets across the nation under rising pressure, federal relief is essential to protecting care, preserving key staff and promoting quality,” stated Bruce Yarwood, president and CEO of the American Health Care Association.
Many operators looking to expand or refinance are viewing a rapidly tightening credit market with anxiety. But if vendor attendance at three recent major industry shows is any indication, capital will continue to be readily available. However, there is little doubt that lenders will be watching the qualifications and intentions of providers more closely.
For now it’s likely that the current economy’s downturn may hit providers indirectly.
From the November 01, 2008 Issue of McKnight's Long-Term Care News
