Effective and rapid COVID-19 testing — and not just a vaccine — will put skilled nursing facilities back on a path toward normalization after being ravaged by the public health crisis, according to Sabra Health Care REIT executives.
“We have more testing now than we’ve obviously had in the past. We still don’t have enough, but once we get to really adequate and effective rapid testing, we’ll begin the path to complete normalization in the facilities,” Sabra chairman and CEO Rick Matros reported during the company’s third-quarter earnings call Friday.
“We’ll be able to test quickly, screen people better and have a more normal environment within the facility because the social isolation component of dealing with the pandemic has been extremely tough on our patients, our residents and their families,” he added.
The federal government in mid-October announced a partnership with pharmacy retailers CVS and Walgreens to administer the coronavirus vaccines, once ready, free of charge to long-term care facilities. The expectation is that a vaccine will be ready for distribution later this year or in early 2021.
Matros noted that he’s been skeptical about the distribution of a potential coronavirus vaccine but comments from federal and industry leaders have indicated that it should be ready between January and February. He said if that’s true then it will “accelerate the normalization of the business.”
“I’m cautiously optimistic, but we shall see. I still have some level of skepticism there and still focused on testing as being the most immediate answer to the challenges that these states are currently facing,” Matros said.
The Irvin, CA-based real estate investment trust reported that its average quarterly occupancy for its skilled nursing/transitional care portfolio decreased 134 basis points during the third quarter.
Additionally, its average monthly occupancy for the portfolio increased 31 basis points from June to September, and decreased 32 basis points from September to October — bringing its total decline in average monthly occupancy to 877 basis points since February.
“In other words, occupancy has been slowly building,” Matros said. “It came down a little bit and started spiking all over the place in the first weeks of October and then started picking up again at the end of [the month].”
He also said it’s important to note that there will be margin recovery ahead of occupancy, which has already started to happen in different parts of the country. Margin recovery will come as social aspects begin to normalize, like the return of smaller groups instead of one-on-one activities, which will in turn help labor expenses decrease. He also noted that equipment supply costs will also start to decrease as operators have more success with building inventory.
“I just want to point that out so we’re not solely focused on occupancy as a means to recovery,” Matros said.