Bloomberg News had an article about increases of Medicare payments to nursing home owners and operators. Morgan Keegan analyst Robert Mains said the nursing home industry sector will post strong earnings growth in 2011 due to a "favorable Medicare reimbursement environment and stable operating costs." The national for profit chains will take advantage of the increases in Medicare payments because they have the "economies of scale" to do so.
In October, Medicare changed the payment system which pays nursing homes per patient day, with rates based on acuity and the complexity of the services each patient receives. The system allows operators to make more money to treat patients with major illnesses.
Shares of The Ensign Group Inc. rose 20 cents to $23.75, while Kindred Healthcare Inc.’s stock added 5 cents to $19.04. National HealthCare Corp.’s shares increased 4 cents to $46.68. Skilled Healthcare Group Inc.’s stock rose 3 cents to $8.94.
Hopefully, they will use the increase to hire and train additional staff…….but that would hurt their profits.