A Study on Operating Profitability of Non－profit Corporations：Focusing on the Elderly Care Facilities of the Elderly Long－term Care Insurance
Asian Tax Journal Vol. 22 No. 1 (2021), pp. 217-239
Abstract
The long－term care insurance system, which has been in place since 2008, has started to show different perspectives from each other as there are various interested groups. Representatively, there is a difference in opinion on operating profitability between the National Health Insurance Corporation, which operates the long－term care insurance system, and the long－term care service provider. Therefore, this study analyzes the operating profitability by focusing on the elderly care facilities among the payment types of the long－term care insurance system. Specifically, six institutions were selected among the nationwide elderly care facilities, and the major financial ratios of the target institutions (cash inflow－outflow ratio, long－term care margin, net profit margin) were compared with previous studies. Next, it was estimated how the major financial ratios would change when applying the reimbursement standards for nursing care workers recommended by the Ministry of Health and Welfare. Finally, the break－even point was analyzed by estimating the cost function. As a result of the analysis, the cash inflow－outflow ratio was 1.95%, the long－term care margin was －3.09%, and the net profit margin was 0.41%. These are lower than those of previous studies. The long－term care profit margin worsened to －18.35% and net profit margin to －14.87% when applying the reimbursement standards for nursing care workers recommended by the Ministry of Health and Welfare. The number of residents per day at the break－even point of the sample institution is estimated to be 72, but the average number of residents per day at the actual sample institution was 57, below the break－even point. The results of this study are contrary to the opinion of the policy authorities claiming that the operation of elderly nursing facilities is profitable, which means that long－term care institution profitability analysis and long－term care fees need to be reviewed. In addition, it implies that it is necessary to revise and implement unified accounting standards applicable to long－term care institutions.
Keywords
- Long－term care insurance system
- long－term care facilities
- long－term care margin
- break even point