Romeo Raabe
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Nursing Home Profit Margins Half That of Three Years Ago

Skilled Nursing Facilities are not doing well financially.  One third of U.S. nursing homes have no profit or are losing money per the June 7th issue of McNights LTC News.  The problem is two fold.  Nursing homes lose money on the Medicaid remibursement rate.  Many nursing homes have a significant percentage of their residents on Medicaid.  It is not possible to cost-shift to the fewer and fewer paying residents when there are less and less of them every year.

The profit center for skilled nursing homes is the Medicare reimbursement they receive for short term recovery stays following 3 days in a hospital.  The patient must transfer to the skilled nursing home within 30 days of hospital discharge, and for the same reason they were hospitalized for.  While in the skilled nursing facility the patient must be undergoing some type of receovery care and making progress for it to be healthcare and thus paid for by Medicare.

The reimbursement rate for this type of care has dropped by over a third in the past few years.  This can no longer make up the shortfall caused by the Medicaid reimbursement rate of those longer term residents.

Why is this of concern to you?  If you ever need a skilled nursing home, hopefully there will be several to choose from in the area.  More importantly, if you are planning on Medicaid being your Long Term Care provider, and knowing that this often means a nursing home with no other choices, good luck finding one that can afford to accept you.

Nursing homes can and do say no to admissions.  They have to in order to keep their doors open.  If they have too many Medicaid residents that reimburse them less than the cost of care, and not enough higher paying clients to make up the difference, how can thye stay in business?

If you lose money on every customer, can you make it up in volume?

It has already happened in Green Bay.  One skilled nursing home closed up some years back when they had 32 residents, all on Medicaid, and had to close.  Think of the difficulty of those residents trying to find another facility to accept them.

If you want access to Long Term Care, in the setting you desire (home, day care, assisted living, or nursing home) then it would be a good idea to be able to pay for it.  If you are paying for your care and are unhappy, you can change that care.

How can you be sure you have enough money to pay for your Long Term Care?  One way is to be rich, but another way is just like you handle the risk of an auto accident or a tornado damaging your house – insurance.  You don’t need enough insurance to cover the entire bill since your lifestyle will change when care is needed.  You won’t need as many cars, boats, campers, etc., and won’t be doing the traveling you might do while healthy.  Thus some of your income can pay part of the bill.  Insurance lets you pay pennnys now for dollars when needed.  Perhaps you should investigate it now, while still healthy enough to purchase it?

If you do, consider investigating with an expert in the field, someone who has worked in Long Term Care financing exclusively for over 20 years.  Romeo Raabe – click the link –www.TheLongTermCareGuy.com  (920) 884-3030  (800) 219-9203

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The Long Term Care Guy