Question:

How profitable is owning a nursing home?

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My sister & I are both RN's that would love to open a quality alzheimer's nursing home. We recently placed our grandmother in an alzheimer's home and found that there was a huge shortage of beds in Maine. We are interested in opening a nursing home, but have been informed that they are extremely expensive to open & maintain. Any information in regard to the profitability of owning a nursing home? We aren't looking to become wealthy, just to make a good living and provide a quality service that is in great need. Thanks!

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  1. Most of your patients will be relying on Medicare.  It does not pay much at all.  Nursing homes are going out of business - that's why there's a shortage of beds.


  2. "Care (nursing) Homes" are closing due to lack of capital, huge ever increasing costs, huge liability insurance, and patients have little assets to pay.

    If you are going to do this, it will cost a fortune ($100's thousands to several million - building facility, medical machines, maintenance, proper medical staff, state licensing, compliance, accounting/ auditing, legal representation, supplies, insurance, etc).

    You might cater to more wealthier older people, and refuse to accept Medicare. You can't use any federal or government funds. You would be a private care facility. It is still very risky, but a nice gesture.

    Working as a nurse qualifies you to provide certain care. It is not the same as running a business.

    Seek the advice from SUCCESSFUL homes in your area. You need a business person who has lots of specific business management experience in this specific area.

    Good Luck!

  3. a huge factor is going to be your financing costs.  i've analyzed a lot of privately held nursing home operators.  the market was great until the amount of capital available dropped dramatically in the late 90's.  For a short period, it was nearly impossible to get a loan from a bank for a nursing home.

    The market has recoverd though.  REgulations have changed as well.  check   nih.gov for alot of great info, including benchmark financial statistics to give you some idea of what profit margins are in the industry.  valuation cap rates are available too on a quarterly basis.

  4. Medicare does not pay for long term care in a nursing home.  They pay for short term care in a Skilled Nursing Facility (SNF) which is often a nursing home.  Medicaid will pay for long term nursing home care, if your income and assets are low enough.  Meaning pretty much destitute.  The rest is private pay and long term care insurance.  Most nursing homes are for profit and that trends is increasing with the increasing age of the population, so it must be pretty profitable..  Most residents in nursing homes are 85 or older so its going to be a few years before this trend picks up steam.  You can do what you described on a small-scale residential basis.  Ask in the Health Care section of Yahoo Answers.

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