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Assessment of Dependence in Activities of Daily Living Among Older Patients in an Acute Care Unit

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Published on: September 30, 2020

COVID-19 Pandemic Impact on Nursing Homes Financial Performance.

Gregory N Orewa¹, Robert Weech-Maldonado², Justin Lord³

¹University of Texas San Antonio, San Antonio, TX, USA.

Inquiry : a Journal of Medical Care Organization, Provision and Financing

|March 22, 2024

Summary

The COVID-19 pandemic significantly worsened nursing home financial performance, decreasing operating margins and increasing costs. This highlights the need for improved financial transparency and accountability in long-term care facilities.

Keywords:

COVID-19 financial performance long-term care nursing homes operating cost operating margin operating revenue

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Published on: November 7, 2020

Area of Science:

Healthcare Management
Health Economics
Long-Term Care Administration

Background:

Nursing homes faced significant financial concerns due to the COVID-19 pandemic, including potential closures.
The pandemic was anticipated to negatively impact both income and expenses for these facilities.

Purpose of the Study:

To longitudinally analyze the financial performance of nursing homes during the COVID-19 pandemic.
To examine the pandemic's specific impact on operating margins, revenue, and costs per resident day.

Main Methods:

Utilized secondary data from CMS Medicare cost reports, LTCFocus, Payroll-Based Journal, Care Compare, Area Health Resource File, Provider Relief Fund, and CDC NH COVID-19 data.
Analyzed 45,833 nursing home-year observations from 2018 to 2021 using fixed-effects regression.
Controlled for organizational and market characteristics in the analysis.

Main Results:

Nursing home financial performance declined during the pandemic.
Operating margins decreased by approximately 4.3%.
Operating costs per resident day rose by $26.51, exceeding revenue increases by $17.

Conclusions:

The COVID-19 pandemic imposed substantial financial strain on nursing homes.
Factors like occupancy rates, payer mix, and staffing intensity influenced financial outcomes.
There is a critical need for enhanced financial transparency and cost report accuracy in nursing homes.