Medicaid pays for long-term care and accounts for about 65 percent of nursing home revenues. Medicare and private insurers pay for seniors who need a short stay. Patients with Medicare or private insurance are highly sought after by nursing homes because their bills are reimbursed at higher rates than those of residents in the Medicaid program. But Medicare has been cutting back on the length of stay allowed at nursing homes. Patients are now often sent directly home with home healthcare, or they are sent home sooner than they previously would have been. Outpatient total joint replacements are on the rise, skipping the need for a hospital or nursing home stay altogether. "Everyone is getting dinged by length-of-stay issues," says Talya Nevo-Hacohen, chief investment officer at Sabra Health Care REIT (NASDAQ: SBRA) based in Irvine, Calif. The company currently owns 409 skilled facilities that are, on average, about 30 years old.