CFG team members Erik Howard and Jeffrey Stein were recently interviewed for an article entitled, “Cutting Into Costs,” that ran in the January 2016 issue of McKnight’s Long Term Care News.
The article covers the key changes in financial and operational indicators for nursing homes since 2010, and how changes such as healthcare reform measures are impacting cash-on-hand and other metrics.
Erik Howard, managing director, real estate finance capital funding at Capital Funding LLC, tells McKnight’s that even if the days cash-on-hand metric had gone south, it’s not necessarily a red flag to lenders.
“That’s because skilled nursing facilities have unique challenges,” he says. “Perhaps a better indicator would be how a majority of the operators in the industry manage their cash positions vis-à-vis their working capital lines of credit.”
Adds Jeffrey Stein, executive managing director of Capital Finance LLC, the healthcare working capital arm of Capital Funding Group: “In skilled nursing, depending on which state you are operating in, you are billing and collecting Medicaid on different frequencies. Some states you bill once per month and in others it can be twice a month or weekly with a similar reimbursement frequency. Obviously, operators with a more frequent billing and reimbursement cycle will be in a better liquidity position.”