New Wave of Closings?

Struggling SNFs could lead to new wave of closings, analysis finds (article by Danielle Brown, McKnight’s Long-Term Care News)

A facility’s CMS star rating and operating profit margins are correlated, according to recent cost comparison data released.  Facilities with an overall star rating of 3 or above experienced an operating margin above the national level.  Understanding these ratings as well as the corresponding financial metrics is the key to creating opportunities in today’s market.

Read the article below:

A declining median operating margin means more skilled nursing facilities — particularly poor performers — are entering an economic danger zone, according to the latest analysis from CliftonLarsonAllen. 

CLA found that SNFs’ median operating margin, which compares net income to revenues, dipped below zero for the first time in the report’s history. It currently sits at minus-0.1%. 

In 2018, SNFs that received an overall star rating of three stars or higher experienced an operating margin above the national median, according to the report. SNFs that received an overall star rating of one or two stars, however, experienced operating margins below -1% for 2018. 

Read more here