DataPoint: Nursing Home and ACF Operating Margins

Based on a LeadingAge NY analysis of 2017 Residential Health Care Facility (RHCF) Cost Reports received from the Department of Health (DOH), the statewide median operating margin for RHCFs was 1.1 percent, down from 2.05 percent in 2016. Operating margin is a measure of profitability used to determine financial risk. Statewide, 40.8 percent of homes operated with a negative operating margin during 2017. Operating with a negative operating margin was more likely among voluntary homes, with over 60 percent reporting losses. The median operating margin for voluntary homes was -1.72 percent, compared to 2.92 percent for proprietary homes. In the New York City region, 69.3 percent of homes reported a positive operating margin, which was the highest percentage statewide. In contrast, 45.3 percent of homes in the Buffalo region reported positive margins, which was the lowest percentage statewide. Additionally, the Buffalo region’s median operating margin was -0.14 percent, representing the only region with a negative median operating margin.

Based on an analysis of 2016 Adult Care Facility (ACF) Cost Reports received from DOH, the statewide median operating margin for ACFs was 2.16 percent. Of the nearly 500 reporting Adult Homes, 38.6 percent operated with negative margins. 51.7 percent of voluntary ACFs reported operating losses. In 2016, the median operating margin for voluntary Adult Homes was 0.8 percent, while proprietary homes showed a median margin nearly five times higher (3.7 percent).

Contact: Ken Allison, kallison@leadingageny.org, 518-867-8820