This week, a number of organizations issued Year in Review reports on M&A activity and predictions for 2022. Staffing and financial issues facing skilled nursing facilities also made headlines. We have included a summary of a number of the Year in Review articles, along with several stories on the skilled nursing industry.
- The American Hospital Association is asking Congress to add $25B to the provider relief fund to help hospitals respond to recent COVID-19 surges per Becker’s Healthcare.
- Kaufman Hall released its 2021 M&A Year in Review. The number of M&A transactions was down (2020 included 79 transactions and 2021 included 49), but the size of the deals were larger in 2021 (16.3% of the deals were mega-mergers, compared to 8.9% in 2020).
- Cain Brothers released its 2021 M&A Year in Review. Large for-profit systems made a number of plays to exit non-core markets and M&A activity will likely slow down in 2022 due to federal antitrust enforcement.
- New research on hospital mergers was released. Mergers often lead to changes in leadership teams, management practices and produce some cost savings by implementing new technology systems, although they do not improve financial or patient outcomes and often result in increased pricing per Centre for Economic Policy Research.
- Skilled Nursing News published its predictions for 2022, including: 1) PE firms will dominate M&A activity; 2) Nursing homes will begin to experience financial strain and some may close as stimulus funds dry up; 3) The federal government prefers home care over nursing home care; and 4) Nursing homes must accept that COVID-19 may hang around for a while.
- CMS predicts that home health expenditures will reach $201B by 2028, a 73% increase from 2020. Home health demand is driven by limited hospital resources, growth in telehealth and changes in Medicare policy per HealthPayerIntelligence.
- Skilled nursing facilities continue to struggle with staffing as the nursing home industry has lost 420K jobs since the start of the pandemic. Low pay is causing nursing home employees to seek other opportunities and the median annual wage for nursing assistants is $30,120 per The Washington Post.
- United Methodist Retirement Communities will be offering a bonus to its front-line senior housing/nursing home workers in hopes of retaining them. Bonuses will range from $4K to $14K and will be paid out over two years per McKnight’s Senior Living.
- New information is out on retail health utilization. According to a Morning Consult poll, only 8% of respondents went to a retail clinic for medical services “often” and 27% said they used the clinics “sometimes”; however, 70% of the respondents said they trusted retail health clinics and most respondents said they valued the quality, cost and convenience of such clinics per Managed Healthcare Executive.
- Mass General Brigham, the largest employer in Massachusetts, is supporting legislation that would increase real estate transfer taxes. The additional transfer taxes will be used to support the construction of affordable housing as housing and health care are linked according to the hospital per Commonwealth Magazine.
