Why Nursing Homes Are Losing Against COVID-19

“U.S. Coronavirus Deaths in U.S. Nursing, Long-Term Care Facilities Top 10,000” read the headline. Wallstreet Journal published a story about how nursing homes and long-term care facilities seemingly can’t keep COVID-19 from decimating their residents. How can COVID-19 be spreading so aggressively from one nursing home to the other when the residents are all quarantined?

CDC and state public health departments have issued strict orders to nursing homes and long-term care facilities that should have stopped COVID-19 from even entering most nursing homes. No visitors. Everyone stays in their rooms.

These nursing homes are generally private-sector endeavors which depend on public sector funds. With prices for nursing home stays costing upwards of $8K per month, many elderly Americans depend on Medicare to subsidize their nursing home costs. In fact, only about 1/3 of long-term care spending comes from private money — the other 2/3rds is from government programs.

Because many long term care facilities are capital and labor intensive, and the government has been trying to rein in spending, the profit margins for long-term care (LTC) operators are quite low. If you look up some of the annual reports for publicly traded LTC companies, you’ll find some depressing numbers. Brookdale Senior Living, operator of 800 senior…