A new report paints a troublesome picture of the US nursing home sector at mid-year, with new facility openings at a standstill, even with the number of beds rapidly declining.
As of June, labor shortages have led 21% of operators to downsize, according to The Access to Care Report, which was published Wednesday by the American Health Care Association/National Center for Assisted Living. That has meant dropping either beds or units, while 24% have closed a wing, unit or floor.
Also in that time period, 55% of nursing homes have turned away prospective residents and patients and 48% have waitlists of a few days or more.
The effects of the pandemic and lack of policymaker foresight have impacted growth, AHCA/NCAL officials said.
From 2020 through today, a pre-pandemic decline in the number of nursing homes accelerated nearly fourfold, with 579 facilities closing. Meanwhile, only three nursing homes have opened so far in 2023, according to the authors’ analysis of CMS Quality and Certification Oversight Reports data. That’s compared to an average of 64 opening each year from 2020 to 2022.
“For decades, Medicaid has failed to adequately fund the actual cost of care for our nation’s most vulnerable and keep up with rising costs,” the organization told McKnight’s Long-Term Care News. “This has left many nursing homes struggling to maintain everyday operations, much less make structural improvements.”
More than two years ago, AHCA put forth a reform agenda to address these problems and “fully fund nursing home care.”
Multifaceted problem
Nursing home operators see additional factors playing into this stalled growth.
Chris Chirumbolo, CEO of Carespring, said that the pandemic interrupted the two-to-three year timeframe needed to develop new facilities. Lenders, wary of the industry’s challenges, have become more conservative and selective when working with operators, and higher interest rates and the loss of COVID-19 funds to support prior reimbursement shortfalls have also contributed to the problems, he told McKnight’s.
“Our country and nearly every state seem to ignore the fact of the aging physical plants as the average nursing facility is over 40 years old,” added Chirumbolo, whose company has 17 locations in Ohio and Northern Kentucky.
In addition, “the regulatory process in particular makes it incredibly difficult and expensive to open new nursing home beds. And that’s unfortunate because they are needed,” Josh Jergensen, president and COO of Providence Administrative Consulting Services (PACS), said.
PACS, which provides administrative support to 197 affiliate facilities across 9 states, has experienced this issue itself, with completion on one new facility taking about five years from start to finish due to state regulatory hurdles, Jergensen said.
Although policymakers’ current focus on home care is necessary, Chirumbolo said, states also must invest in the infrastructure to create new nursing facilities with private rooms for a growing segment of the population who can only receive care in these settings.
Nursing home ‘deserts’
Instead, since 2020, 45,217 beds have been lost and more than 21,000 residents have been displaced by nursing facility closures, with 30 additional counties becoming nursing home deserts, the Access to Care Report found. Nursing homes that closed during the pandemic tend to be smaller facilities in urban settings, with the majority of residents receiving Medicaid. Two out of five closures overall had 4- or 5-star ratings.
Difficult closure decisions are tied to a financially unsustainable reimbursement system, Jergensen noted. Yet, he sees bright spots, with some states recognizing these problems, altering their Medicaid reimbursement rates accordingly, for example.
“Those states are making it feasible for their operators to remain open,” he said.
Stakeholders pointed to well-known workforce shortages as another culprit behind dwindling bed counts. Nursing homes have lost more of their workforce than any other health care sector, amounting to approximately 15%, or 250,000 workers, AHCA/NCAL reported. A workforce rebound to pre-pandemic levels is not projected until 2026, it added.
A survey of 425 providers accompanying the new AHCA/NCAL report found 77% of operators facing worker shortages, and 95% of nursing homes are experiencing difficulty hiring staff despite most offering higher wages and bonuses.
“Too many of our nation’s seniors are having to look farther and wait longer for the long term and post-acute care they need. These are sobering numbers and should serve as a wake-up call to policymakers to help nursing homes rebuild,” Mark Parkinson, president and CEO of AHCA/NCAL said in a statement.
The Biden administration’s planned staffing mandate could make things worse, stakeholders said. If workforce numbers don’t rise and facilities must reduce census to comply, perhaps with a 4.1 hours-per-resident-day staffing minimum, the AHCA/NCAL forecasts that there could be more than 446,000 displaced residents, despite a growing population of people needing care.
“Instead, we need comprehensive policies and meaningful investments that will address the caregiver shortage and protect access to high-quality nursing home care,” Parkinson said.
Writing on the wall for access issues
Nearly all nursing home providers are concerned that they will be unable to meet a potential federal staffing mandate, the AHCA/NCAL survey found.
With facilities unable to readily admit high-acuity patients, and states struggling to reimburse costs post-COVID, the situation is already difficult, PACS’ Jergensen noted. “A staffing mandate, particularly one that is unfunded or underfunded, would only exacerbate these problems.”
“Now is not the time for a one-size-fits-all federal mandate,” Chirumbolo of Carespring said. He recommends that the Centers for Medicare & Medicaid Services expand its staffing measure in order to represent the total care being provided to each resident.
As a physical therapist who has provided a range of skilled care including toileting to residents each day, for example, his care is not counted as part of direct care hours, Chirumbolo added.
“Just counting nursing and nurse aide hours alone in a silo is outdated and does not capture the entire picture. Let’s assess all facilities under this updated standard.”
A staffing mandate would instead serve to shut down the throughput of patients between acute and post-acute care, force many skilled nursing facilities to lower census to obtain the ratio CMS expects and leave vulnerable patients waiting in hospitals, he added.
“If we want to see what happens when this occurs, please see what occurred to hospitals at the height of the COVID pandemic,” he said.
AHCA/NCAL has proposed several solutions to rebuilding the workforce in its Care for Our Seniors Act. These include “proper Medicaid funding” and programs to attract and retain caregivers.
“With a rapidly growing elderly population, the time is now to strengthen this critical aspect of our healthcare system,” the Access to Care Report noted. “Long-term care needs meaningful investments by our nation’s policymakers to help nursing homes on shoestring budgets recruit more staff and keep their doors open.”
