The SeniorCare Investor: The Skilled Nursing Market Enigma -
A Very Difficult Business Continues To See Strong Demand
Years ago, the once nursing home magnate and former Forbes 400 member, Abe Gosman, delighted in telling audiences that there were only two institutional living environments that were always full but where no one wanted to be: prisons and nursing facilities. While a bit harsh on the skilled nursing side, and said 20 years before the skilled nursing business really became a short-term-stay health care business, for the consumer the skilled nursing facility is still regarded as “The Home” that no one wants to move to.
For the provider, skilled nursing has become more technical where success is measured not by how well you can take care of someone until they die, but how quickly you can rehab them from their acute episode, move them out to a lower care setting or back to their home (not in quotes), and prevent future re-hospitalizations that would start the cycle all over again. That’s not an easy thing to do, especially when you have so many (44) Resource Utilization Groups in which to “place” a patient for Medicare billing, and so many grey lines that can be crossed. A case in point is the Department of Justice allegations against Life Care Centers of America for inappropriate therapy protocols and usage. Did the company merely cross a “grey