COVID-19 Exacerbates Financial Challenges Of Long Term Care Facilities

Long term care facilities continue to dedicate extensive resources in order to protect their residents and staff from the COVID-19 pandemic. The cost of personal protective equipment (PPE), routine testing and staff support have severely strained providers’ budgets. For many providers, financial challenges have existed for years. But in the wake of the pandemic, long term care facilities are in a crisis – and many are at risk of permanently closing unless they receive help.

The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) conducted an analysis that estimated that the long term care industry is expected to lose $94 billion over a two-year period (2020-2021). In 2020, nursing homes spent roughly $30 billion on PPE and additional staffing alone.

The analysis also estimated that more than 1,600 nursing homes could close in 2021 without financial assistance — more than 10 times the number of facilities that closed last year. The average nursing home has the capacity to serve approximately 100 residents.

Declining occupancy due to fewer new residents is also fueling the crisis. AHCA/NCAL President and CEO Mark Parkinson called it a “business nightmare.” Parkinson said in a recent interview, “In three short months, we’ve gone from 71% to 67% … We need census to recover at a rate of about 1% a month, and while that doesn’t sound like a lot, it’s not as easy as it might seem … If the census doesn’t recover at all, or recover slower than that, the sector has a real problem.”

Financial burdens have become too difficult to overcome for many providers. Facilities continue to shutter, leaving thousands of vulnerable seniors in search of new care. Most residents have multiple underlying health conditions and require a high-level of around-the-clock, specialized care. Closures leave residents displaced from their long-standing communities and loved ones, and reduce their options for quality care, especially in rural areas.

The struggle to stay open has been document in stories nationwide in California, Indiana, Connecticut, Massachusetts, Kansas, Michigan, Nebraska, New Hampshire, New York,​ and Rhode Island.

The need for financial assistance is urgent. Long term care providers are working around the clock to protect our most vulnerable citizens, and they must be made a priority. AHCA/NCAL is urging Congress to rally around America’s long term care residents and their caregivers by:

  • Continuing to make long term care residents and workers a top priority for vaccine distribution.
  • Allocating $20 billion to the long term care industry either through an enhanced Federal Medicaid Assistance Percentage for long-term services and supports, or through a dedicated portion to the Provider Relief Fund.
  • Continuing to prioritize long term care facilities’ access to testing and proper equipment.
This financial support will bring much-needed relief and enable providers to keep residents and staff safe. While progress has been made, there is still a long road ahead. Long term care providers need adequate funding so they have the proper tools to protect residents and staff from the virus, and to continue delivering the high-quality care seniors depend on.

ABOUT AHCA/NCAL
The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) represents more than 14,000 non-profit and proprietary skilled nursing centers, assisted living communities, sub-acute centers and homes for individuals with intellectual and development disabilities. By delivering solutions for quality care, AHCA/NCAL aims to improve the lives of the millions of frail, elderly and individuals with disabilities who receive long term or post-acute care in our member facilities each day. For more information, please visit www.ahcancal.org.