International Journal of Clinical Case Reports and Reviews Copy rights@ Ecler Jaqua et.al. Auctores Publishing – Volume 9(2)-171 www.auctoresonline.org ISSN: 2690-4861 Page 1 of 2 Markups and Contribution Margins of Nursing Homes Ecler Jaqua MD 1 *, Terry Jaqua PhD, MBA 2 1 Trident University International – Business Administration Department, USA. 2 Trident University International – Health Sciences Department, USA. *Corresponding Author: Ecler Jaqua, Trident University International – Business Administration Department, USA. Received Date: September 03, 2021 | Accepted Date: September 22, 2021 | Published Date: September 30, 2021 Citation: E Jaqua, T Jaqua. (2021). Markups and Contribution Margins of Nursing Homes. International Journal of Clinical Case Reports and Reviews. 8(4); DOI:10.31579/2690-4861/171 Copyright: © 2021 Ecler Jaqua, This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Abstract Markups and profit margins are different accounting terms that analyze similar transactions and use the same inputs but show additional information. The two use costs and revenues as in their calculations. The critical difference is that while profit margins refer to sales less the cost of goods sold, markups refer to the amount that needs to be added to the cost of goods to get to the final selling price. Understanding these two terms ensures that price setting is done correctly. Too low or high price setting may cause lost profits or sales. Also, with time, the price setting of a firm impacts its market share. This research paper discusses markups and contribution margins of nursing homes. Keywords: Nursing Homes; markups; Rehabilitation services; medical care Industry Description Nursing homes are also known as skilled nursing facilities. They offer various personal and health care services. The services in a nursing home focus more on medical care. The multiple services in these facilities include 24-hour supervision, nursing care, constant assistance with daily activities, and providing three meals a day. Rehabilitation services are also available. Such include speech, occupational, and physical therapy. Some people opt to stay at a skilled nursing facility after their discharge from the hospital (Yang et al., 2021). They go home after their recovery. However, many nursing home residents choose to live there permanently. Many have ongoing mental or physical conditions requiring constant supervision and care. A skilled nursing facility has the best care for older adults. They offer custodial care, giving help getting out of bed, assisting individuals with bathing, feeding, and dressing. Also, they provide high levels of medical care. A licensed physician is supervising the patients. Some medical professionals are always on the premises. Other medical professionals, including physical or occupational therapists, are available (Yang et al., 2021). Due to the aging population, many individuals are faced with the prospect of moving their older family members into convalescent or a nursing home. It is a decision that may arrive suddenly following hospitalization. Such decisions come as it becomes more challenging to meet the aging family member's needs. The Margins and Markups on Services in Nursing Homes The nursing home in the United States is both For-profit and non-profit facilities. For-profit facilities are operated and run by businesses and corporations, and shareholders control them. Such facilities prioritize shareholders and put the needs of their residents second. The conflict of interest reduces the quality of care offered to residents. In addition, there is the pressure of keeping the staffing levels. On the other hand, non-profit facilities prioritize residents' quality of care since they have no responsibility to the shareholders. Such tend to higher- quality and more staff. There are also fewer bedsores, lower restraints, and government-cited deficiencies. The majority of nursing homes in the United States (about 70%) are for-profit, and this trend continues to grow. It means that their prime role is profit maximization. The expenses and revenues of a nursing home are linked to its value strategy. The highest value is created when a nursing home delivers quality care and sets low prices (Yang et al., 2021). At face value, the strategy may appear to be at odds with the goal of profit maximization; thus, it may lead to low profitability. A low price-setting would seem to depress the facility's total revenues. But the low price and high-quality care attract more residents, the revenues and profits are expected to increase. On the side of expenses, uncertainty exists due to the high quality- low price strategy. The uncertainty is whether the high quality is more costly to produce than the low quality of care. In case the high quality is expensive, then there is likely to be pressure on profits. However, if patient safety errors and Open Access Short Communication International Journal of Clinical Case Reports and Reviews Ecler Jaqua * AUCTORES Globalize your Research