By Steve Moran
I didn’t head to the NIC fall conference thinking I would be writing about -- or even thinking much about -- the world of skilled nursing.
In some sense, skilled nursing is what skilled nursing is. It is puzzling, necessary, and, honestly, kind of weird. Here is what I mean:
There is no question that we have a very real need for skilled nursing and I have a hard time imagining there will ever come a time when we don’t need skilled nursing.
Even when you take a look at the very best skilled nursing facility in the whole world, no one is ever going to say, "Yes!" to skilled nursing as a lifestyle choice.
Skilled nursing is expensive -- even when done poorly -- and super expensive when done well.
If we are honest, much of what is done in skilled nursing could be done as well in assisted living and at a much lower cost . . . and this is almost entirely true because of the regulatory and reimbursement environment we live in, which, is it’s own kind of nuttiness, and actually not the subject of this article.
We have a whole bunch of people living in senior living who are not really living. They have tubes in and tubes out. Little to no cognitive function. Yet, their bodies are still pumping blood, though with limited or no quality of life.
Don’t get me wrong here, while this is not how I would choose to live my last few years, weeks or months -- I have no quarrel with someone who chooses to do it this way. But I am convinced that in the coming years we will see much less of this.
Salt Lake City Airport
Getting to NIC I had a plane change in Salt Lake City which turned into an hour delay. I found myself standing in line out the gate with someone else who was headed to NIC. It turns out that he is a very successful operator of skilled nursing facilities and is actually building new facilities and growing his organization. He is completely bullish on skilled nursing and for good reasons. I plan on visiting some of his facilities and writing about what he is doing… but not today.
My very first scheduled meeting was with some folks at Greystone Capital out of New York. They own and a significant portfolio of nursing homes -- among a bunch of other stuff they do -- and are in an acquisition mode.
On top of all of that, just talking to people, I find more often than not when nursing homes go up for sale there are lots of bidders and great prices (from the seller's point of view).
So . . .
Then there is a whole other group of operators who sound like they are half a step in and half a step out of bankruptcy. From their perspective, regulations and reimbursement rates are about to kill them. And, in fairness, we have seen some big failures over the last year.
At The End of The Day
No matter how you slice it, everything revolves around operations. Great operators who care about their team members and their residents will do great and those who care mostly about profits -- in a kind of perverse form of justice -- will be the ones whose profits suffer the most.
It seems clear that today we have too many nursing home beds available. Therefore, this shaking that has already begun will likely put us a lot closer to the right number of beds and those remaining beds will improve the quality of care.