The skilled nursing sector is set to lose $94 billion over the two-year period of 2020 and 2021 as a result of ongoing COVID-19 costs and projected losses. That’s according to a new analysis released Tuesday by the American Health Care Association / National Center for Assisted Living.
The analysis shows that skilled nursing facilities spent an estimated $30 billion in 2020 on personal protective equipment and staffing to help fight COVID-19 and that these additional costs are expected to continue in 2021 as the pandemic lingers. Meanwhile, revenue has significantly declined due to fewer patients coming from hospitals as well as fewer potential residents seeking long-term care.
“Nationally, nursing home occupancy has significantly dropped 16.5%, from 85% in January 2020 to 68.5% in January 2021,” AHCA / NCAL noted in the analysis. Nursing homes experienced $11.3 billion in losses in 2020, and the sector is projected to increase in 2021 to $22.6 billion, according to the association.
Although AHCA / NCAL acknowledged that the nursing home industry benefited from some much-appreciated federal aid, this funding has not covered the enormous response this public health crisis has required, the analysis noted. The U.S. Department of Health and Human Services has estimated that long-term care providers received $21 billion in total from the federal government, including testing equipment, some small business loans through the Paycheck Protection Program, and approximately $13 billion to nursing homes through the Provider Relief Fund. This was a major lifeline and helped prevent numerous providers stem the tide last year, but as the pandemic persists, more is needed in 2021, AHCA / NCAL said.
“Due to chronic underfunding and now the pandemic, thousands of facilities are in danger of closing their doors permanently and uprooting the frail seniors they serve,” AHCA/NCAL said in a statement to the McKnight’s Business Daily. “Congress must do more to direct specific aid to long-term care. We must rally around residents and staff to protect them from COVID as well as ensure access to long term care for those who will need it in the near future.”
This article appeared in the McKnight’s Business Daily, a joint effort of McKnight’s Senior Living and McKnight’s Long-Term Care News.