The federal government likely will make more funds available to assisted living providers soon, although it is unclear how much will be directed to the industry, and further help is needed given an estimated $17 billion financial impact that Covid-19 is set to exact on the senior living industry.
This is the message from the American Seniors Housing Association (ASHA), which has been pushing the Department of Health and Human Services (HHS) to expand on the financial relief going to assisted living.
Recently, HHS announced that private-pay assisted living providers would be allowed access to the Provider Relief Fund, and are eligible to receive 2% of their gross 2019 revenue. ASHA expects that within the next 10 days, HHS will open another phase of distribution to cover additional lost revenue and new expenses. However, the methodology for determining how much money providers will be able to secure is still unclear.
In the meantime, ASHA continues to lay out the case for why additional financial support is so critical. In a Sept. 22 letter to HHS Secretary Alex Azar and Deputy Secretary Eric Hargan, ASHA shared statistics from a recent analysis conducted by HealthTrust.
Based on the loss of revenue and added expenses that assisted living providers faced between March and June, HealthTrust estimated the $17 billion annual financial impact facing the industry. A single, 100-unit community is incurring an average of $40,096 a month, while experiencing a $54,903 monthly revenue shortfall.
In the months ahead, providers will continue to spend significant amounts of money related to the pandemic, as testing continues to ramp up and buildings need to be updated with touchless systems and other equipment to facilitate safe visitation.
“The confluence of both revenue and expenditure strain on this industry is not sustainable,” ASHA President David Schless wrote in the letter. “It is critical for the continued viability of this industry to serve our seniors that additional financial support be directed from the remaining Provider Relief Fund dollars to these deserving companies.”
Another industry group, Argentum, also has been urging the federal government to increase financial support for assisted living and other senior housing providers. At the organization’s Senior Living Executive Conference, a virtual event held this week, HealthTrust COO and Partner Colleen Blumenthal shared further findings from the firm’s financial analysis, warning that providers might now be making their debt service “by a hair.”
The good news is that nimble senior living providers have so far found ways to at least partially alleviate the severe financial pressure they are under, such as by cutting expenses in areas such as marketing. But Blumenthal warned that the pressure could keep building into 2021, with the rapidly increasing cost of liability insurance one factor to keep in mind.
“We may get our arms around what we need on a sustainable basis going forward, [but] I think occupancy and liability are going to create huge challenges for operators,” she said.