Despite recession, nursing homes profitable
McKnights had an interesting article about how nursing home corporations are very profitable despite the downturn in the economy. Many nursing homes are private corporation and not publicly traded; those private companies seem to be doing extemely well. For-profit nursing home companies' stock values are holding strong, despite an overall shaky economy, a new Dow Jones report notes. The key has been relatively stable Medicare and Medicaid payments, though there is complaints about a potential adjustment to payment levels for fiscal 2010, report authors note.
Kindred Healthcare, Skilled Healthcare Group, and Sun Healthcare Group have seen their share values fall from 52-week highs. But each also has been holding steady in 2009. The recently signed economic stimulus bill will provide about $87 billion in Medicaid funding, which is helping company values.
Nursing homes may have decreased revenue in the future although that is doubtful considering Democratic control of the Congress. Many observers are very interested in what the Centers for Medicare & Medicaid Services might do to counterbalance providers being overpiad by $770 million more than anticipated in Medicare payments for nine higher-acuity reimbursement groups that were added in 2006. Most insiders predict Medicare cuts, or at least a proposed freeze in annual automatic increases.
