John O'Connor
John O’Connor

This may sound hard to believe, but senior living essentially was a private-pay business three decades ago. These days, senior living operators in just about every state are tapping into Medicaid payments. And more than a few players are not content to stop there.

We’re seeing unprecedented interest in Medicare support as well. Why? For the same reasons nursing homes went this route: the pay is far better. In fact, many skilled care providers saw per diem rates for residents more than quadruple, simply by pivoting from the Medicaid- to the Medicare-paid care.

But as has sometimes been said of an even higher authority, the government can giveth; the government can taketh away. For a cautionary tale here, one need look no further than this week’s jaw-dropping announcement from the Centers for Medicare & Medicaid Services: Medicare skilled care payments for fiscal 2023 will be slashed by $320 million.

The bean counters at CMS insist that what really happened is that skilled care operators received too much Patient Driven Payment Model funds earlier, and this is a corrective step. Sort of a make-ungood.

The collective providers’ reaction amounts to: Are you effing kidding? After two years of dealing with a pandemic that has killed thousands of staff and residents, destroyed occupancy and driven up costs, you are going to CUT payments by nearly a third of a billion dollars?

The short answer, at least as far as the federales are concerned is, well yes.

I have a friend who works for a company that is essentially a defense contractor. (In the interest of preserving our friendship, I won’t reveal the name of either.) His firm develops new weaponry that’s used in wars and other places where a lot of young men are trying to kill each other as quickly and efficiently as possible. His day job keeps him so busy that he has not been able to take a vacation in more than three years.

Long story short, his firm can’t get its weaponry to the front lines fast enough. And Russia’s little reclamation project in the Ukraine has only made things that much more frantic.

These things are playing out as Democrats and Republicans in Congress compete to see which side can allocate more of the federal treasury toward what might be euphemistically be called defense spending.

So what are we to make of this confluence? Two things:

First, be very careful about becoming a dependent of the federal government. That funding spigot can be very fickle indeed.

Second, if you want to make absolutely sure those public funds don’t dry up, then get into a business focused on terminating lives rather than preserving them. I know that advice sounds cynical. But trust me, you’ll make a killing.

John O’Connor is editorial director of McKnight’s Senior Living and its sister media brands, McKnight’s Long-Term Care News, which focuses on skilled nursing, and McKnight’s Home Care. Read more of his columns here.