Although nursing home admission and occupancy rates declined in California nursing facilities between 2019 and 2020, a clinical investigation of data from 828 nursing facilities in 2019 and 887 nursing facilities in 2020 finds that “Some but not all California NHs [nursing homes] had a substantial increase in profit margins in 2019 over 2020” – 7.0% profit margins in 2020, compared to 2.26% profit margins in 2019 – with wide variations among individual facilities (from a loss of about 48% to a gain of 74% in 2020). “Examining California nursing home profitability and related factors before and during the COVID-10 pandemic” finds that facilities were more profitable when they had more certified beds; higher occupancy rates (in 2019 only); a higher Medicare census; and higher quality ratings. Lower profitability was associated with a high Medicaid census; chain ownership (in 2019 only); medium and high managed care days; and use of related party transactions. Investigators were surprised to find that, contrary to findings in other studies, for-profit ownership did not affect facilities’ profitability.
April 17, 2023 – T. Edelman