Projected Losses and Closures for Nursing Home Industry
The ongoing COVID-19 pandemic has adversely affected industries across the nation and globe. Skilled nursing facilities have been greatly impacted with increased infection rates and deaths.
According to a projection from the American Health Care Association (AHCA), nursing homes will lose $22.6 billion in revenue in the year of 2021. This projection is primarily based on occupancy rates which have been strenuously low since the pandemic. In the year 2020, the nursing home industry suffered a loss of $11.3 billion. With the additional losses expected in 2021, this would amount to a total loss of $34 billion. Expenses have also increased dramatically due to an increased demand for personal protective equipment (PPE), staffing and routine testing for COVID-19. These expenses are estimated to be $30 billion per year.
In the year of 2020, 143 facilities were forced to shut down. AHCA is projecting 1,670 more facilities will be forced to close their doors in the year of 2021. Since the beginning of the pandemic, federal support programs have provided $13 billion of relief funding through the Provider Relief Fund to skilled nursing facilities. The Paycheck Protection Program (PPP) has provided an additional $8 billion in relief. AHCA has requested an additional $20 billion in aid for the upcoming months.
Ohio lawmakers are considering offering nursing home operators $50 million to take beds out of nursing homes. This would help increase reimbursements for the skilled nursing facilities that survive closures. Nursing homes are also being adversely affected by home health companies. The demand for in-home services in on a rise. Home health companies are attempting to grab post-acute patients for in-home services who are hesitant to go in to facilities.