Class Act for Washington State?
Washington has passed its version of a long-term care insurance bill, sort of, using a payroll tax to fund it. Unlike the misconceived Class Act that was originally part of the Affordable Care Act, which was designed to rob Peter to pay Paul, Washington State has just passed its own version, The Long-Term Care Trust Act. While the intent is worthy, I don’t think it will accomplish its goals. As now passed, the Act will be funded by a payroll tax of 58 cents for every $100 of salary. For someone making $20 per hour, that comes to about $240 per year, and they can least afford it. I have seen no mention of an employer match, but I am sure that is coming. The sponsors claim that family... Read More »
Misleading Information for Consumers
A professor with a new book on dementia care claims a semi-private room in a “decent” nursing facility in a big city costs $240,000 per year. Hogwash. I hate it when bad information gets out there, and a professor of psychiatry and bioethics at the Albert Einstein College of Medicine should know better. Especially someone coming out with a book called: Dementia Revisited: Building a Life of Joy and Dignity from Beginning to End.” Dr. Tia Powell published a story last weekend in The Wall Street Journal called “New Hopes for Dementia Care.” In it, she claims that the cost for a semi-private room in a “decent” nursing home in a big city is $240,000 a year if you don’t qualify for... Read More »
Doom and Gloom for SNFs?
Skilled nursing facilities are closing at an alarming rate, so should we be worried about a shortage of beds in 10 years? There have been a lot of reports in the media recently about skilled nursing facilities closing down, just shutting their doors, and this is not just in rural areas. Low Medicaid rates have been blamed for this, and in many states, reimbursement levels have not even come close to keeping up with wage inflation, not to mention other costs. And this is 10 years into our economic recovery. Imagine what will happen during the next recession when state tax receipts decline. But there is something else going on as well. Skilled nursing occupancy rates have been trending down... Read More »
Five Star Finally Restructures With Landlord
Five Star Senior Living and Seniors Housing Properties Trust announce a dramatic restructuring of their relationship, and all shareholders seem to lose, at least for now. Five months after Five Star Senior Living issued its “going concern” announcement, the financially troubled company finally came to an agreement with its landlord, Senior Housing Properties Trust, to restructure its leases. Looking at the terms, it appears that both companies had a gun to their heads, as there really do not appear to be any winners here. Five Star will have the leases convert to a management contract by the end of this year, with reduced rents in the meantime, which obviously gives them a cash flow break,... Read More »
Strong M&A Activity Continues
As we head to the end of the first quarter, seniors housing and care M&A activity may reach 100 transactions for the fourth consecutive quarter. I should no longer be amazed by how strong the seniors housing and care M&A market remains, given all the headwinds we hear about all the time. From the public companies, Capital Senior Living’s stock took another tumble last week and Five Star Senior Living continues to struggle, but may soon get some rent relief. Nevertheless, buyers keep on snapping up senior living and skilled nursing properties. We are approaching the end of the first quarter, and that often means a fair amount of deal announcements the last week. Before we get those,... Read More »Schedule a demo
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