The skilled care sector may be doomed. What else is new?

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John O'Connor
John O'Connor

The first session I ducked into featured a speaker addressing declining payments. The second detailed lengthy new reporting requirements for nursing homes. And then the really negative sessions took place.

So began my first industry trade show. Nearly three decades later, not much has changed. The field continues to face the kinds of funding, occupancy and regulatory challenges that would cause other sectors to give up the ghost.

Currently, the skilled care field finds itself bracing for a new resident classification system, proposed funding cuts by MedPAC and additional requirements aimed at improving rehospitalizaton rates and resident satisfaction scores, while trimming the off-label use of psychotics.

Oh well: another day, another existential threat. Then again, what else is new?

When I first began at McKnight's, the industry was wrestling with the implementation of a massive new federal nursing home law, which was colloquially known as OBRA '87. Then we saw a federal push to move more residents out of facilities and into home care, where the costs would presumably be far less – until of course, federal regulators did the math.

Then came a law in the late '90s designed to tackle mounting budget deficits (back when Republicans actually cared about such things) that essentially gutted rehab coverage — and forced more than 1,000 facilities to seek creditor protections.

And then there was the growth of assisted living, which essentially removed plum customers (private pay, low-acuity residents) from nursing home settings.

So life-threatening challenges are not exactly a recent trend.

Some say it's different this time. Occupancy levels are drooping, despite what amounts to zero new construction. Managed care is tightening the screws. Other senior living operators are trying to get a piece of the post-acute pie. To be sure, those and other challenges are very real.

But here's the thing. Skilled care operators are, if nothing else, survivors. They have always found ways to navigate challenges that would have made others cry uncle. Remember the early '90s, when many hospitals wanted to get into the skilled care business? That was until they discovered they could not operate efficiently enough to survive on the available payments. Yet skilled care operators somehow managed.

If this field had a mantra, it would be: We'll find a way, no matter what.

Does that mean skilled care is unsinkable? Of course not. And to be sure, these are precarious times. But if there is one group of people who have repeatedly mastered the art of making lemonade from lemons, it is skilled care operators. I'd be reluctant to bet against them.

My guess is that 30 years from now, they will still be around. The buildings may look different, and the services may be tweaked considerably. But they'll be standing.

I'm also fairly certain that skilled-care providers will still be meeting every year, figuring out what needs to be done. And to gripe about the unfairness of it all.

John O'Connor is McKnight's Editorial Director.

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McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.

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