Marcum LLP Releases Annual Nursing Home Benchmark Study; Cost of COVID Documented for the Long-Term Care Industry

FEBRUARY 15, 2022 (New York City, NY) – Marcum LLP’s Healthcare Services Group today released its fourth annual benchmarking analysis of nursing home operations.

The 2021 Marcum Three-Year Nursing Home Statistical Review reveals the significant increases in the long-term care industry’s cost structure caused by the COVID-19 pandemic, and documents that reimbursement and government stimulus packages have not kept pace with those increases. The report covers the period 2018-2020.

Download the Three-Year Nursing Home Statistical Review

Among the study’s key findings:

• Staffing Shortages: The pandemic exacerbated the effect of ongoing, industry-wide staffing shortages, with nursing homes forced to increase in-house staffing hours to make up for the shortfall, resulting in significantly higher contract staff costs. Nationally, in-house staffing hours increased 2.8% between 2019 and 2020, after no change from 2018 to 2019. The cost of contract nursing per patient day increased 11%-16% in the 2019-2020 period. This compares to an increase of 2%-4% in 2018-2019.
• Reimbursement: Public Health Emergency Fund reimbursements averaged $24.98 per patient day in 2020, while the year-over-year change in total cost from 2019 to 2020 averaged $35.98 per patient day. The $11.00 gap represents the challenge that the industry is still facing in reconciling rising costs with government reimbursement.
• Occupancy: Nationally, nursing home occupancy sharply declined by 6.89% from 2019 to 2020, following an upward trend of 0.21% from 2018 to 2019.

“The progression of the virus has dramatically slowed in senior living communities since the height of the pandemic. However, census has not yet rebounded to pre-pandemic status. In fact, while the Northeast currently leads the nation with the highest increase in overall occupancy, occupancy remains significantly lower than pre-pandemic levels,” said Matthew S. Bavolack, a Marcum advisory partner and the Firm’s national healthcare services leader. “Together with runaway inflation and limited government support, staffing shortages look to be a continued bedevilment for long-term care facilities for the foreseeable future. If there is a silver lining, we believe it is that the need for quality care for seniors remains and, if our demographic indications are correct, will grow as the population continues to age in place.”

“In the past, our annual report on the trend lines shaping the long-term care industry has covered five-year periods, in an effort to provide as much historical context as possible for our findings. This year, we narrowed our focus from five years to three, to facilitate planning against a more manageable set of contemporary data,” Mr. Bavolack said.

About the Marcum Nursing Home Benchmark Study

Marcum’s annual benchmarking analysis of long-term care industry trends is a yardstick to help facilities improve both operational and financial performance and to guide strategic planning. The study is based on a meticulous review of the Center for Medicare and Medicaid Services (CMS) database of Medicare cost reports (Form 2540-10) filed annually by the nation’s nursing homes.

More than 38,000 Medicare cost reports were factored into this year’s analysis. To illustrate trends and identify any local deviations from the norm, data are presented both nationally and regionally. Regions include the Midwest, Northeast, Pacific, Southeast, Rocky Mountains and Southwest.

Data are analyzed in 18 financial and operational categories. These include:

• Occupancy and payor mix
• Occupancy percentage by state
• Average length of stay
• Nursing
• Dietary
• Laundry
• Housekeeping
• General service cost per patient day
• Therapy
• Average hourly wage
• Employee benefits to total salary
• Revenue analytics
• Covid-19 public health emergency funding
• Total cost per patient day
• Covid-19 PHE funding PPD vs. 2019–2020 change in total cost PPD
• Balance sheet analytics
• Days in accounts receivable
• Days in accounts payable

Data reference tables are also provided for each of the three years covered by the study.

Download the Three-Year Nursing Home Statistical Analysis

About Marcum LLP
Marcum LLP is a top-ranked national accounting and advisory firm dedicated to helping entrepreneurial, middle-market companies and high net worth individuals achieve their goals. Marcum’s industry-focused practices offer deep insight and specialized services to privately held and publicly registered companies, and nonprofit and social sector organizations. The Firm also provides a full complement of technology, wealth management, and executive search and staffing services. Headquartered in New York City, Marcum has offices in major business markets across the U.S. and select international locations. #AskMarcum.