McKnight’s Long-Term Care News simultaneously offers two diametrically opposing views of the state of the nursing home industry today: industry analysts say conditions are improving as staff return, occupancy rates increase, and Medicare and Medicaid rates are higher than ever vs. the major nursing home trade association, which claims that facilities face staffing shortages and insufficient government funding and nearly 450,000 additional residents will be displaced if the Biden Administration imposes minimum nurse staffing ratios.
In “SNF Outlook: REITs to Play Offense as Private Buyers ‘Partially Sidelined,’ Operating Trends Improve,” Skilled Nursing News reported on August 22, 2023 industry analysts’ observations that “as occupancy and labor continue to improve, and reimbursement increases [citing many states’ Medicaid rate increases and the 4% increase in Medicare reimbursement in fiscal year 2024],” and as the population ages (“‘People get sick and age no matter what’”), real estate investment trusts (REITs) are expected to use their accumulated capital to acquire more facilities. In light of the industry’s continuing financial recovery, analysts do not see a minimum staffing regulation as dampening REITs’ enthusiasm for the acquisition of additional nursing facilities.
On the other hand, a day later, Skilled Nursing News reported in “Nearly 450K Residents at Risk of displacement if Mandate is Enacted, As Access Issues Compound,” that the American Health Care Association (AHCA) reiterates, in its Access to Care Report (August 2023), a constellation of dire problems currently facing nursing facilities – “labor shortages, inflation, and a lack of government funding” – which result in facilities’ providing care to a declining number of residents. AHCA predicts that if the Biden Administration follows through on its commitment to mandate minimum nurse staffing ratios (which AHCA predicts as a minimum of 4.1 hours per resident per day (HPRD) of care), facilities will be able to serve 446,715 fewer residents. But see “A Chaotic Week in Nursing Home Reform” (CMA Alert, Aug. 31, 2023.
AHCA’s gloom and doom predictions are both typical for the trade association and not credible.
AHCA admits that the number of facilities has declined since 2014, but claims that “the decline accelerated by nearly 4 times during the pandemic.” (But see 2009 article “Factors Associated with Increasing Nursing Home Closures,” and Center Alert). However, facilities that closed, as described by AHCA, are atypical in significant respects: 38% of facilities were 4- or 5-star facilities; 31% of facilities were non-profit. Many of these facilities are unlikely to be AHCA members.
What AHCA does not acknowledge is that two additional factors totally unrelated to the coronavirus pandemic have led to fewer people using nursing facilities. First, the “institutional bias” in Medicaid, which made nursing homes a mandatory service and limited payments for non-nursing home care, ended more than a decade ago. The majority of Medicaid’s long-term care spending shifted irrevocably to non-institutional alternatives, which are preferred by older people and their families. Second, the growing use of Medicare Advantage (MA) has both reduced the use of nursing homes by MA plan enrollees and led to shorter Medicare-covered stays.
Most disturbing in AHCA’s “the sky is falling” prediction is that the 4.1 HPRD of nurse staff time that AHCA claims its members cannot meet is a staffing standard developed by Abt Associates, after a multi-year study, in a Congressionally-mandated report released in 2001, The Appropriateness of Minimum Nurse Staffing Ratios in Nursing Homes. With residents more medically complex and needing far more care than residents 20+ years ago, a 4.1 HPRD standard is, if anything, far too low to meet current residents’ needs for high quality of care and quality of life.
If AHCA continues to engage in relentless predictions of disaster and fear-mongering, prospective residents and staff will vote with their feet and go elsewhere to live and work.
August 31, 2023 – T. Edelman