In the months leading to the implementation of a new Medicare payment model for skilled nursing facilities, various voices predicted an exodus of smaller, “mom-and-pop” operators who’d rather call it a career than adapt to a completely new reimbursement system. But only a few months after the Patient-Driven Payment Model (PDPM) took effect last fall, the effects of the COVID-19 pandemic could serve as an even greater motivator to push single-site nursing companies out of the business and accelerate a trend toward regional consolidation that has been brewing for years according to finance leaders at the National Investment Center for Seniors Housing and Care’s (NIC) virtual fall conference.
The government’s extensive support of the industry through CARES Act funding and other levers has largely masked the financial impact on the nursing home industry thus far, with the publicly traded real estate investment trusts (REITs) reporting minimal rent deferrals and billions continuing to flow into the space to offset increased testing, labor, and personal protective equipment.
Dependence on government reimbursements, once considered a serious risk given the vagaries of Washington and statehouses, could suddenly become a serious asset in the post-COVID world, especially for real estate-minded investors scared off by upheaval in retail and office space. Although not a “COVID” article, the information is very interesting. It is definitely worth taking a few minutes to read about what financial leaders of our post-acute care world are thinking. Stay well, stay safe, and stay tuned!