State Reports Huge Increase in Nursing Home Profits
A June 2010 report by the California Office of Statewide Health Planning and Development (OSHPD) reports that nursing home profits (net income) grew by 640 percent from 2003 to 2007, increasing from $70 million in 2003 to almost $448 million in 2007.
The report attributes the increase to AB 1629, a 2004 law that sets Medi-Cal payments to nursing homes. Developed by the nursing home industry, the law has increased Medi-Cal payments to skilled nursing facilities by about a billion dollars per year since 2004 despite no change in the number of people being served.