Although some of the short-term pandemic-related costs faced by skilled nursing facilities likely will fade over time, the industry’s current overall model may be financially unsustainable without broad changes, according to a Forbes article Monday.

The article points to escalating expenses, due to the need for redesigning interior spaces to maximize infection control, a potential loss of beds and increased staffing and pay raises. Even as costs increase, overall per patient revenues from Medicare and Medicaid are likely to continue to fall. 

Skilled care facilities also likely will be under even greater regulatory and consumer pressure to maximize infection control but will need to strike a balance between safety and providing a comfortable, engaging and social community. 

The industry is likely to see a massive ownership shakeout, the article noted, with some analysts predicting that as many half the current operators may go out of business, unable to find the capital they need to keep going. Industry analysts disagree on whether this will result in ownership consolidation or a net decline in beds — or both.

“There never will come a time when we will return to the old normal,” Robert Kramer, president of the consulting firm Nexus Insights, told Forbes.

Editor’s Note: This article appeared in the McKnight’s Business Daily, a free daily newsletter that is a joint effort of McKnight’s Senior Living and McKnight’s Long-Term Care News. For subscription information, visit this page.

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