US Nursing Homes are Facing a Profitability Crisis

The American Healthcare Association (AHCA) has announced that over half of nursing homes in the US are unprofitable, leaving the future of long-term care in question. The report found that key contributors include increasing prices for drugs and medical supplies, Medicaid payments that are lower than the cost of care, and a decreased patient population.

According to Nate DiCamillo and Annalisa Merelli, “Once the pandemic arrived, nursing homes — facing already stressed budgets — had to spend more on things like personal protective equipment. The homes also lost money on short-term patients who would have stayed in a nursing home facility to recover after elective surgery (which wasn’t available during the height of the pandemic), and on long-term residents who died from covid (more than 160,000 nursing home residents have died because of the virus, according to the US Centers for Disease Control and Prevention). The pandemic also accelerated a trend toward a preference for receiving nursing home-style care at home. This trend is partially the result of staffing issues, but also because patients realized during the pandemic that they could get a lot of the same care while living in their own homes.”

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(Source: Quartz, February 8^th, 2023)