LTC Imperative Nursing Facility Financial Survey Finds Facilities Facing Risk of Closure
Posted on August 18, 2022 by Jeff Bostic
A recent survey of nursing homes conducted by the Long-Term Care Imperative found that several settings throughout the state are closing beds, considering a sale, or considering closing their doors. Due to lost capacity in the system overall, Minnesota seniors are losings access to care in the communities they call home.
The key findings of the Long-Term Care Imperative survey offer a sobering picture of the financial condition of nursing facilities. The most significant takeaways include:
- The median operating margin for the second quarter (April through June) was -3.5%, which translates to an annual loss of $230 thousand. Greater Minnesota facilities are performing even worse (-4.9% and $263 thousand).
- Operating margin has improved since our last survey for March (-8.7% median), but ongoing losses mean a mounting cash shortage.
- About 10% of nursing facilities have exhausted all reserves and borrowing options.
- About 20% of nursing facilities are more than a month behind on payments to at least one major vendor (food, therapy, or temporary nurse staffing), indicating that they are delaying paying bills due to being short of cash.
- More NFs are considering sale than closure. Sale is the primary option in the metro (30%), and closure (10%) is the more common choice in greater Minnesota. Closure of close to 10% of nursing facilities would be more than 30 statewide.
- Key workforce indicators (lack of interest in jobs, using managers to cover direct care, turnover increasing the risk of regulatory issues) are all worse for nursing facilities considering sale or closure
About the Survey
Earlier this month, the Long-Term Care Imperative completed a survey of nursing facility members to evaluate their financial health and to look at key factors driving those results. We want to thank the more than 100 members who were able to respond within just a few days.
How We're Using the Results
We used this data to inform Gov. Walz's administration about the trends in a meeting with his office last week. We are hopeful that the meeting will lead to short-term assistance for facilities most at risk, as well as a commitment by the administration to work toward systemic fixes aging services payments in the next legislative session.
Additionally, we are sharing the data with key media to shape ongoing conversations, influence the coverage of our issues, and ultimately drive policy outcomes.
The Long-Term Care Imperative will continue working with the administration to try and address these issues, both in the short term and in the longer term, once the new legislature is in St. Paul early next year.