The latest results available from the annual Long-Term Care Imperative's Financial Indicators Study, conducted by Larson Allen, demonstrate a marked decline to the delicate status of the financial health of Minnesota's nursing facilities.

Here are a few observations from the survey:

• The typical or median nursing facility's operating margin declined sharply from 2.39% in 2009 to 0.99% in 2010. With October 1, 2009 and 2010 rates frozen, and two more years of frozen rates and/or reduced funding ahead, it is fully expected that the nursing facility financial health will decline to the poor performing levels of past years when the median has hovered around 0.00%. Facilities need to have an operating margin of at least 3% to be successful and provide good services to residents in the long term.

• The typical nursing facility has just 24.8 days of cash on hand. This is essentially enough cash to cover only one payroll, and is indicative of the financial difficulty faced by providers. A desirable number of days’ cash on hand is at least 30 days. Between 45-60 days is preferred, or 1½ to 2 months of operating reserves.

• According to the survey, roughly 83% of the typical nursing facility’s revenue is directly paid or indirectly controlled by the State of Minnesota.

The 2010 Financial Condition of Minnesota's Nursing Facilities is posted on the Care Providers of Minnesota website.

If you have questions about the results of the financial study, please contact Todd Bergstrom at our Association, 952-851-2486 or tbergstrom@careproviders.org.

Todd Bergstrom
952.851.2486
tbergstrom@careproviders.org

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