Raising the minimum wage by 10% would prevent approximately 15,000 deaths in nursing homes per year, according to research examining how wage hikes can improve outcomes and conditions in skilled nursing facilities.
However, the analysis also shows that a 10% minimum wage hike would reduce the number of Medicaid recipients in private facilities by 0.3 residents per 100 beds as nursing home operators would increase costs for private payors by approximately $5.90 per day. The study was published in the Review of Economics and Statistics and distributed widely this week.
“While minimum wages could improve quality by attracting more productive workers or incentivizing greater effort, quality may worsen if employers instead reduce staffing,” wrote author Kristi Ruffini, an assistant professor at the McCourt School of Public Policy at Georgetown University.
The average healthcare support worker earns $13 per hour, and at least 62% of nursing assistants switch jobs each year, according to researchers. Most of those job transitions take place among nursing homes versus other healthcare facilities. Nursing assistants tend to earn higher wages than restaurant workers and similar to retail employees, the study noted.
Boosting the minimum wage also can reduce the number of health inspection violations and incidents of preventable conditions such as pressure sores, Ruffini wrote. In addition, it could lead to enhanced productivity by increasing worker motivation and by attracting new workers to the sector.
Nursing homes are struggling to recover from losing approximately 221,000 workers during the pandemic. The sector is at its lowest workforce numbers since 1994, the American Health Care Association said recently.
Improving wages would help attract more people to the sector, but facilities have little leverage so long as Medicaid reimbursements remain so low they don’t cover the cost of care, providers in a number of states have said. Ruffini’s study cautions that the quality of care could worsen if higher wages result in staff cuts due to higher labor costs.
Still, the research underscores the relationship between compensation and resident outcomes. “Higher wages improve the quality of care that’s provided in nursing home settings,” Ruffini said.