Ziegler’s CFO Hotline report released on Aug. 18 indicates that about one quarter of skilled nursing operators in the country made permanent reductions in the number of beds in the last two years.
The Chicago-based specialty investment bank surveyed nearly 270 skilled nursing providers in July for its report. Roughly 60% were single-site providers, while the remaining 40% were multi-site operators.
Of the respondents who said they had permanently reduced the number of beds during that time frame, the majority did so by fewer than half — 25% reduced the total number of skilled beds by 1-10%; 41% reduced beds by 11-25% and 26% reduced beds by 26-50%.
Four percent of respondents indicated that they had fully exited skilled nursing, while 1% said they reduced beds by 51-75% and another 1% reduced beds by 76-99%, according to the report.
“We don’t have plans to close skilled nursing, but may be forced to if staffing, wages and increased regulations in our industry don’t change,” one operator said; participants were allowed to leave anonymous open-ended comments. “Regulators cannot force us to be closed to admissions for over two weeks every time a staff member tests positive for COVID-19 and expect us to survive.”
A majority of providers, 63%, said that they did not have plans to reduce beds further in the next two years, however, more than one-third of respondents indicated they expect to make at least incremental reductions.
When looking at both the respondents who have recently reduced bed size and those who have plans to do so in the near future, this made up 46% of survey respondents,the report said.
Providers were also presented with seven “pressure points” facing the skilled nursing industry, and were asked to identify their top three concerns: staffing; regulatory environment; reimbursement challenges; consumer preference (to avoid SN); changes in hospital referral patterns; dated physical plant and offerings and increasing acuity of residents.
The most frequently brought up issue was staffing, with 247 mentions, followed by regulatory environment with 118 responses and reimbursement challenges with 109 mentions.
“Problems such as workforce and reimbursement challenges existed prior to COVID-19, but they are now at a crisis point. The pathway forward is very uncertain,” one operator said.
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