Federal Staffing Mandate For Nursing Homes Means Trouble For Staffing
March 06, 2024 | BY Moshe Schupper, CPA
Hard hit by the pandemic, the nursing home industry is still struggling to recover and rebuild its workforce. Standing in its way is the Biden Administration’s proposed federal staffing mandate. If passed, this mandate will cost nursing homes billions of dollars, compromise access to care for seniors, and increase the challenges already facing operators who are already responding to industry flux by limiting admissions and closing facilities.
According to a recent report by the American Health Care Association (AHCA), despite higher wages, the nursing home sector suffered the worst job losses out of all other health care sectors in the Covid period. In order to return to pre-pandemic levels, another 130,000 workers would still need to return to the industry.
The industry is up in arms and urging support for the Protecting Rural Seniors’ Access to Care Act, which would prohibit the Centers for Medicare and Medicaid Services (CMS) from finalizing its proposed federal staffing mandate for nursing homes, and would establish an advisory panel on nursing home staffing. The staffing mandate proposed by CMS would compel nursing homes to meet unjustified staffing minimums, without offering any resources or workforce development programs to soften the impact.
The proposed rule consists of 3 central staffing proposals:
- The first calls for minimum nurse staffing standards of 0.55 hours per resident day for registered nurses and 2.45 for nurse aides.
- The second rule mandates having an RN on site 24 hours a day, 7 days a week.
- The final rule imposes additional facility assessment requirements.
According to a joint letter of protest written by the American Health Care Association and the National Center for Assisted Living, nearly 95% of nursing homes do not meet at least one or more of the three proposed requirements of the proposal. If the proposed rule is implemented, facilities would be forced to downsize or close down – displacing hundreds of thousands of nursing home residents.
The AHCA’s 2024 State of the Sector report asserted that if the staffing proposal is finalized, the sector will need to inject 100,000 more staff members into the workforce at an annual cost of $7 billion. An anticipated 280,000 residents would be displaced as facilities would be forced to downsize or close and the result would limit access to care for our most vulnerable population.
Ensuring that our nation’s sick and elderly population receives safe, reliable, and quality nursing home care is crucial. Further limiting the nursing home industry’s access to a competent workforce, without offering programs or funding to soften the blow, is untenable for both the industry and its beneficiaries.
This material has been prepared for informational purposes only, and is not intended to provide or be relied upon for legal or tax advice. If you have any specific legal or tax questions regarding this content or related issues, please consult with your professional legal or tax advisor.
Perform an Operational Review to See How Well Your Real Estate Business Is Running
March 06, 2024 | BY Ben Spielman, CPA
In the wide, wide world of mergers and acquisitions (M&A), most business buyers conduct thorough due diligence before closing their deals. This usually involves carefully investigating the target company’s financial, legal, and operational positions.
As a business owner, you can perform these same types of reviews of your own company to discover critical insights.
Now you can take a deep dive into your financial or legal standing if you think something is amiss. But assuming all’s well, the start of a new year is a good time to perform an operational review.
Why Perform an Operation Review?
An operational review is essentially a reality check into whether – from the standpoint of day-to-day operations – your company is running smoothly and fully capable of accomplishing its strategic objectives.
For example, a real estate business relies on recurring revenue from established clients as well as new revenues, in order to survive and grow. It needs to continuously ensure that it has the knowledge, talent and resources to acquire, buy or lease properties to develop or resell. The point is, you don’t want to fall behind the times, which can happen all too easily in today’s environment of disruptors and rapid market changes.
Before getting into specifics, gather your leadership team and ask yourselves some big-picture questions:
- Is your company falling short of its financial goals?
An operational review can spotlight both lapses and opportunities for increased profit and can offer recommendations to improve management performance.
- Are day-to-day operations working efficiently?
Implementing system controls like automated financial tracking systems and data analytic tools can help real estate companies streamline their operations and improve efficiency.
- Is your company organized optimally to safeguard its financial records and reports?
Protecting financial information is especially important in the real estate industry where most transactions involve large sums of money.
- Are your company’s assets sufficiently protected?
Implementing system controls to protect your business and its properties can prevent unauthorized access; making regular inspections will identify any issues or damage.
What to look at
When business buyers perform operational due diligence, they tend to evaluate at least 3 primary areas of a target company:
- Operations: Buyers will scrutinize a company’s structure and legal standing, contracts and agreements, sales and purchases, data privacy and security and more. Their goal is to spot performance gaps, identify cost-cutting opportunities and determine ways to improve the bottom line.
- Selling, general & administrative (SG&A): This is a financial term that summarizes a company’s sales-related and administrative expenses. An SG&A analysis is a way for business buyers — or you, the business owner — to assess whether the company’s operational expenses are too high or too low.
- Human resources (HR): Buyers typically review a target business’s organizational charts, staffing levels, compensation and benefits, and employee bonus or incentive plans. Their goal is to determine the reasonability and sustainability of each of these factors.
A Funny Question to Ask Yourself
Would you buy your real estate company if you didn’t already own it? It may seem like a funny question, but an operational review can tell you, objectively, just how efficiently and impressively your business is running. Roth&Co is happy to help you gather and analyze the pertinent information involved.
This material has been prepared for informational purposes only, and is not intended to provide or be relied upon for legal or tax advice. If you have any specific legal or tax questions regarding this content or related issues, please consult with your professional legal or tax advisor.
Buffet Wisdom
March 06, 2024 | BY Our Partners at Equinum Wealth Management
Within this flurry are what we call ‘bellwether’ companies, whose earnings reports carry significant weight in gauging the overall economic health. Want to gauge consumer spending? Keep an eye on iPhone sales and airline bookings. Curious about food prices? Look into the restaurant chains and food suppliers. You get the drift. However, amidst the hustle and bustle of earnings season, a few events hold sway far beyond the immediate financial realm. Among them are the much-anticipated letters and shareholder meetings hosted by Warren Buffett.
This year, Buffett’s letter began with a heartfelt tribute to his longtime friend and business partner, Charlie Munger, who recently passed away just short of his 100th birthday. Following this poignant start, Buffett delved into insights about Berkshire Hathaway, along with nuggets of wisdom about business and investing:
“One fact of financial life should never be forgotten. Wall Street – to use the term in its figurative sense – would like its customers to make money, but what truly causes its denizens’ juices to flow is feverish activity. At such times, whatever foolishness can be marketed will be vigorously marketed – not by everyone, but always by someone.”
True success in investing lies in maintaining a steady hand through the inevitable ebbs and flows of the market. But, there’s a catch. Media outlets thrive on sensationalism. When things are tranquil, people tend to switch off, so it’s in the best media’s interest to stir up drama to recapture attention. Wall Street – as Buffet explains – yearns for action.
We can’t stress enough the importance of being aware of the biases inherent in the sources we so often rely on. Are they tied to defense contracts, hyping up tensions in Ukraine? Are they predicting market volatility while pushing investment newsletters? Or are they perhaps peddling doomsday scenarios about nuclear conflict while selling long-shelf-life emergency rations?
There will always be a cacophony of distractions. It’s those who can tune it out who will reap the benefits in the long run.
This material has been prepared for informational purposes only, and is not intended to provide or be relied upon for legal or tax advice. If you have any specific legal or tax questions regarding this content or related issues, please consult with your professional legal or tax advisor.