Story at a glance

  • Following the pandemic, fewer patients are opting to reside in nursing homes.
  • This has created a newfound financial crisis among nursing homes and long-term care centers.
  • More than 1,600 are anticipated to shut down or merge.

A new survey reveals that roughly just one-quarter of nursing homes reported feeling confident that they could last one year or more following the economic devastation of the COVID-19 pandemic, which had an intense effect on nursing homes as the institutions emerged as one of the first COVID-19 hotspot locations. 

Based on an analysis conducted by the American Health Care Association and National Center for Assisted Living (AHCA/NCAL), which surveyed more than 600 nursing homes and 120 assisted living facilities, more than half of the nursing homes and nearly half of the assisted living communities said that they are operating at a profit loss.

This financial crisis is largely due to large drops in revenue from admitted patients. In addition to the previous statistics, 84 percent of nursing homes report losing revenue due to fewer patients coming from hospitals. 

Despite the vaccination rate rising and the pandemic broadly waning, fewer people appear interested in staying at nursing homes given the risk of a COVID-19 infection. 

Beginning with the Life Care Center of Kirkland in Washington, nursing homes and other long-term care centers were hotspots for COVID-19 outbreaks. Data from AARP reveals that more than 184,000 residents and staff of these institutions perished due to COVID-19 infections and complications.

The close proximity of residents and staff in nursing homes helped the virus transmit. With this knowledge, fewer patients opted to enroll as residents. 

On top of this revenue shortage, other expenses weighed on nursing homes. The top three costs reported due to the pandemic include additional pay for staff, hiring more staff and purchasing personal protective equipment (PPE).

An estimated $30 billion was spent on PPE and staffing needs in 2020 alone, all while the industry is expected to lose $94 billion in revenue.

“Even though COVID cases in long term care are at historic lows, providers are struggling to recover from the economic crisis the pandemic has induced,” said Mark Parkinson, president and CEO of AHCA/NCAL. “Too many facilities are operating under shoestring budgets simply because policymakers have failed to dedicate the proper resources, and this can have devastating consequences.”

Parkinson says that lawmakers need to prioritize the survival of nursing homes and other care facilities, mainly through the passage of or implementation of parts of the AHCA’s Care For Our Seniors Act. 

Some 143 total closures and mergers have occurred in 2020, with another 1,670 projected changes in operating nursing homes forecasted for 2021.

“Facility closures will have a devastating impact on long term care residents, most of whom are older adults with multiple underlying health conditions,” the report writes. 

Published on Jun 29, 2021