SNN Survey: Most Providers Will Survive into 2021, But Capital Providers Remain Worried About Census

A recent Skilled Nursing News survey of nursing home operators found cautious optimism about the near-term future of the space, with a majority seeing a clear path to the future even without additional government support.

At the same time, operators have largely been pouring that federal largesse — including CARES Act grants, Payroll Protection Program (PPP) loans, and Medicaid rate increases — into personal protective equipment (PPE) and payroll expenses amid the ongoing COVID-19 pandemic.

Just 12% of respondents to the voluntary survey indicated that they could only sustain operations for at most three months once relief funds were exhausted, with an additional 25% seeing between four to six months of runway at current elevated expense rates.

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By contrast, a full 45% said they could maintain the breakneck pace of coronavirus spending for six months or more, and 18% had no concerns about their future stability.

SNN invited readers to answer a series of questions about their organizations’ income and spending during COVID-19 between August 17 and September 14. All told, 170 representatives from Medicare-certified skilled nursing facilities participated in the non-scientific poll, designed to capture a snapshot of the novel coronavirus’s financial impact on nursing home finances and operations.

More than 85% of respondents indicated the receipt of some form of federal relief, with the blanket cash injection for Medicare providers as the most common. Among the least-cited programs was the Federal Medical Assistance Percentage boost from Congress, with just 20% reporting an FMAP benefit; the blanket increase in the federal government’s share of Medicaid funding did not always trickle down to nursing homes in every state.

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PPE procurement led the list of top outlets for federal relief cash at 39%, with 25% citing making regular payroll as the primary use for stimulus funding. Bonuses and incentive pay came in third place at 15%.

More than half, or 57%, of survey participants reported investing in technology during the pandemic. Of that group, 85% indicated spending on telehealth services — coverage of which the federal government and other payers have greatly expanded during the COVID-19 pandemic — and 72% put money into virtual activities and engagement, including tech that facilitates remote visits with family members.

Finally, SNN asked operators for the top concerns expressed by their capital providers — including real estate investment trusts (REITs), banks, and private equity sponsors. The vast majority, 68%, said their financial backers were most worried about occupancy levels, with staffing far behind in second at 15%.

Despite the very public controversy around lawsuits and potential immunity for nursing home operators in multiple states, just 3% of operators said their capital partners were most concerned about legal issues, the least-cited worry among the options presented.