The projected costs of meeting a possible nursing home staffing mandate have skyrocketed by $1.3 billion over the last five months, a report issued Thursday by accounting firm CliftonLarsonAllen on behalf of the American Health Care Association found.
In July, CLA issued initial projections. The latest report uses updated Payroll Based Journal and Medicare cost report data.. Due to higher labor costs and persistent staff shortages across the US, CLA now estimates more than 191,000 nurses and nurse’s aides are needed at the annual cost of $11.3 billion if nursing homes are to meet a staffing minimum of 4.1 hours per patient day. That’s up from original estimates of 187,000 caregivers and a yearly cost of $10 billion.
During the pandemic, nursing homes lost more workers than any other healthcare category — over 200,000, according to the Bureau of Labor Statistics. Skilled nursing providers are the only ones in healthcare still struggled to get back to pre-pandemic levels, despite aggressive hiring campaigns and rising wages.
“This report once again highlights how our nation’s policymakers should be investing in our long-term caregivers, not mandating quotas,” Mark Parkinson, president & CEO of AHCA, said in a press release. “Nursing homes have been doing everything they can to recruit and retain staff — including increasing wages — but it has not been enough to stem the tide.
If Washington wants to increase staffing in nursing homes, then they need to put their money where their mouth is. Otherwise, we’ll fail to address the underlying issue here, and our residents will have fewer long-term care options.”
CLA conducted its analysis using three different staffing minimums: 4.1 hours power day, 3.6 hours per day, and 3.1 hours per day. The 4.1 hours per day model is frequently used as a model by regulators, based on a 2001 study of ideal nursing home staffing levels.
In Thursday’s report, CLA found 94% of nursing homes would be unable to comply with a potential 4.1 hours per day staffing minimum, and that almost 450,000 residents might be displaced if facilities aren’t able to boost their workforces and thus have to reduce their census in order to meet a 4.1 hours per day minimum.
“The additional burden of meeting minimum staffing requirements with no funding mechanism will potentially increase the number of facilities operating with negative margins,” said Deb Emerson, Principal at CLA. “Although there have been improvements in workforce availability in some areas of the country, nationally, nursing homes are still challenged to find the appropriate workforce. If nursing homes are unable to increase their workforce, hundreds of thousands of residents could be impacted by census reductions.”
The CLA 37th Annual SNF Cost Comparison and Industry Trends report identified 7,741 out of 13,193 SNFs (59%) that had negative operating margins, if public health emergency funding was removed.
“Unfunded staffing mandates do not create jobs or attract individuals to apply,” said Holly Harmon, RN, AHCA’s senior vice president of quality, regulatory and clinical services. “Investing in our caregivers, developing recruitment programs, and building a pipeline of caregivers will help us rebuild the long term care workforce.”