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ngd- The business model of these facilities has been slowly degrading over the years with no real end in site. The effort to improve profit by providing lousy care is one of the current drivers…
The median operating margin at the nation’s skilled nursing facilities sank underwater for the first time in 34 years, according to one long-running analysis, with the lowest quartile of properties sitting at -6.5%.
After hovering at about 0 in 2017, the median figure dipped to -0.1% in 2018, consulting firm CLA announced in its 34th annual skilled nursing cost comparison report, released Thursday.
“This is an alarming metric for the industry, as this number reveals that roughly half of the SNFs in the country are not operating at a profitable level,” CLA’s Cory Rutledge, Matthew Wocken, and Seth Wilson wrote in their report. “Given the multi-year trend of declining industry margins, this calls into question the long-term financial viability of lower performing SNFs.”
Properties with Centers for Medicare & Medicaid Services (CMS) scores of three stars or above had positive median operating margins, while one- and two-star properties were in the red on a median basis — prompting CLA to identify star ratings as “one of the most insightful indicators” of financial performance.
