Nursing Home Diverstiture and Corporate Restructuring: Final Report

摘要

Over the past two decades, the nursing home industry has experienced changes in the financial, regulatory, and competitive environments. Nursing homes have been greatly impacted by federal and state policies, such as the regulatory reforms of the Omnibus Budget Reconciliation Act of 1987 and the payment reforms of the Balanced Budget Act of 1997. Occupancy rates have fallen in the context of shortened lengths of stay for residents and increased competition from assisted living facilities and other home and community-based care. State Medicaid payment rates vary substantially across states and have gone through periods of relative generosity and parsimony. Nursing home malpractice litigation has increased causing an increase in overall operating costs, especially in a handful of states. Responding to these and other policy and market factors, the nations largest chains have undergone periods of considerable expansion, contraction, and retrenchment. The role of chain providers, which represent more than half of all facilities, is significant in the nursing home industry, and a recent study by Medstat found that many chains have reacted to recent trends by divesting ownership in certain markets and pursuing other types of corporate restructuring.