Long-term Care Industry Forecast to Lose $94 Billion Amid Pandemic

The long-term care industry will lose $94 billion over a two-year period as a result of COVID-related costs and revenue losses, according to a new forecast from the nation’s largest nursing home association. 

The American Health Care Association/National Center for Assisted Living detailed its projections Tuesday. Its analysis found that providers spent an estimated $30 billion in 2020 on COVID-related costs, such as hiring more staff members and purchasing personal protective equipment. That number is projected to be $30 billion again for 2021.

In terms of revenue, nursing home operators have lost $11.3 billion in 2021. Provider losses are projected to rise to $22.6 billion in 2021, according to AHCA/NCAL.  

The combination of revenue declines and increased costs resulted in 143 facility closures and mergers in 2020, the report stated. That’s projected to reach 1,670 closures/mergers in 2021 if business conditions do not change. 

AHCA/NCAL is an industry advocate, of course, but it claims the findings justify the need for additional and immediate support for long-term care. The association called for allocating $20 billion to the long-term care industry through enhanced Federal Medicaid Assistance Percentage (FMAP) for long-term services and support, or through a dedicated portion to the Provider Relief Fund, top priority for vaccine distribution and access to testing and supplies. 

“Congress and the Biden Administration must prioritize the long-term care industry and ensure the dedicated front-line workers of these facilities have the necessary resources to protect their residents and themselves,” AHCA/NCAL warned.

Of course, consumers, in the end have the most to lose.  Concerns regarding quality care, security, and staffing, for example, are only heightened when the industry is not profitable.  

Source:  D. Brown, "Long-term care to lose $94 billion due to pandemic: forecast," McKnight's Long-term Care News.