By Max Filby
A majority of nursing homes are operating at a loss, due in part to the coronavirus, a new national survey found. Some fear they won’t be able to continue operating for another year unless more stimulus money is provided.
As the COVID-19 pandemic progresses, nursing homes face financial fights on two fronts with fewer clients and more spending needed to combat the virus.
Fewer clients mean nursing homes have less money to begin with, and the pandemic is proving to be a costly burden as facilities are forced to buy more protective gear and implement broad testing strategies, said Patrick Schwartz, a spokesman for LeadingAge Ohio, a nonprofit group that advocates for long-term care facilities and hospices.
About 55% of nursing homes nationally are operating at a loss, due in part to the pandemic, according to a recent survey from the American Health Care Association. About 89% of all nursing homes are turning a profit of just 3% or less.
“Providers are definitely between a rock and a hard place right now,” Schwartz said. “We know that long after everything opens back up that this will still be something long-term care providers will have to deal with. ... It’s a funding issue.”
The pandemic was just the latest financial disruption for nursing homes, which were struggling long before the virus hit, according to the AHCA.
More than 60% of all nursing home residents rely on Medicaid to cover their care. But Medicaid reimburses facilities for only about 70% to 80% of costs, leaving them to figure out how to cover the rest, according to the AHCA.
That Medicaid funding gap has been further compounded by COVID-19 in various ways.
The cost of a single disposable gown went from about 25 cents January to $7 in August after the pandemic was in full swing, Schwartz said. That means the price of a single gown increased by 28 times over the span of eight months.
Those higher costs, coupled with concerns about how easily the virus spreads in congregate living settings, have created the perfect COVID-19 storm, Schwartz said.
The median age of Ohioans killed by COVID-19 is 80, according to the Ohio Department of Health. About 55% of the state’s 4,226 COVID-19 deaths have occurred in long-term care facilities as of Thursday, state data shows.
At the start of the pandemic, Gov. Mike DeWine and then-Ohio Department of Health Director Dr. Amy Acton imposed strict rules on long-term care facilities. For months, for example, families were not allowed to visit loved ones who were living in facilities.
Some people are putting off finding the right nursing home or community for their family member because they fear another lockdown could be imposed and would prevent them from visiting, said Ken Daily, executive director of Greenville Health and Rehabilitation Center in Darke County.
The multitude of concerns is why the Greenville center saw its resident population drop by 40%.
The center had 82 residents in March. Following the death of 17 residents, that number declined to a low point of about 49 and has since climbed back to 62, Daily said.
“It’s kind of the worst-case scenario,” Daily said. “It has been tough. We have extraordinary costs, there’s just all the PPE cost and testing cost.”
Daily said he is required to have residents and staff tested twice a week. That can cost the nursing home anywhere from $5,000 to $10,000 each time, he said.
Willow Brook Christian Communities, which runs facilities for assisted living, rehabilitation, memory care and more in Columbus, Worthington and Delaware, also has felt the pinch.
Willow Brook estimates it’s lost close to $1.5 million due to COVID-19, while the Greenville center is still seeing a profit of less than 1%.
Like the Greenville center, the loss is partially due to a decrease in residents, with Willow Brook estimating it lost about 50 clients since the pandemic began and is at 425. Willow Brook has also purchased an additional $150,000 in protective gear, said Tom Poulson, chief financial officer at Willow Brook.
Despite the loss, Willow Brook hasn’t had to lay off any employees or pause any capital projects yet. Stimulus money paid out by Ohio and the federal government has helped keep the organization afloat.
About 96% of nursing homes nationwide have received some government funding to help address virus-related costs, the AHCA reports. Willow Brook received $744,000 in stimulus funding, while Daily estimates his facility has received about $300,000 in state and federal dollars.
“We can tolerate this for a time period, but tougher decisions will come if there isn’t further government stimulus,” Poulson said. “It definitely did not cover all of those revenue losses.”
Willow Brook isn’t the only long-term care provider that may need more stimulus funding.
If the pandemic continues well into next year as experts believe, nursing homes and assisted-living facilities could all find themselves in a more difficult financial situation, said Pete Van Runkle, executive director of the Ohio Health Care Association, a trade-industry group. Van Runkle and others said they’re hopeful Congress will come to an agreement on another stimulus package, though specific legislation still remains in limbo.
Most nursing home and assisted-living providers appear to agree.
About 40% of those surveyed by the AHCA won’t be able to sustain their operations for another six months, and 72% said they won’t be able to keep up with COVID-19 for another year.
“They’re very happy and
grateful to receive some of this funding,” Van Runkle said. “The big
concern is really what happens in 2021 if we’re not out of this. ...
Your costs are rising and your revenue is going down and that’s a recipe
for disaster.”
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