Money, occupancy, and staffing…
Occupancy and Safe Staffing
The pandemic diminished occupancy rates. However, occupancy in nursing homes have been steadily declining since the late 1970s. Back then, occupancy was 93 percent of nursing home beds nationally. Occupancy should be higher based on demographics alone.
Mark Parkinson is president and CEO of the American Health Care Association (AHCA). The lobbying group is optimistic for the future of the industry because occupancy continues to increase. He speaks for the nation’s 15,000-plus skilled nursing facilities.
“As gloomy as it has appeared at times during COVID, the bright side is there are a lot of people turning 80 who are going to need our services,” Parkinson said. “The number of units on the skilled nursing side is declining, so if we can get past this very, very rough past year and half and what’s likely to be a very rough nine to 12 months, we’re going to be fine.”
In February, Parkinson said facilities needed to gain about 1% in census monthly. Each Thursday, updated census figures are delivered by the Centers for Disease Control and Prevention’s National Healthcare Safety Network (NHSN). The prognosis is good. Consistent, steady growth.
However, staffing must improve. Studies have found the nursing homes that have higher numbers of nursing staff are better equipped to handle COVID-19.
Safe staffing is necessary to meet the needs of the residents. The industry cannot attract caregivers because of low pay, lack of benefits, and burnout. The industry is struggling to find workers. Many facilities cannot accept new residents due to historically low staffing levels. Some facilities request family bring their own nurses to help care for loved ones.
Financial Mismanagement
Previous studies prove that residing in a for-profit nursing home increases the risk of COVID-19 infection or death. Studies link Private Equity ownership to a roughly 10% increase in the probability of death. Many for-profit facilities operate on complex ownership structures and financial agreements that limit financial transparency.
Parkinson admitted that the industry’s biggest problem is financial mismanagement and poor business decisions. Parkinson told McKnight’s Long-Term Care News:
“If your mortgage payment is too high to a bank, your lease payment too high to a REIT, if the returns you have to give to PE are so high that you can’t afford to have adequate staff, that’s a real problem. But there is nothing inherent about private equity that creates that. Over leverage is the problem.”
Critics agree. Congressional hearings continued through a summer of discontent. He called it “perplexing that some folks have focused on private equity” when the “real” problem is “bad business decisions.” Parkinson told McKnight’s Long-Term Care News:
“We have no concerns about any legislation about disclosing who owns the buildings. The private equity issue is more complicated because it doesn’t matter whether the money comes from a bank or a REIT or from private equity. If you overpay for a facility, you’re going to have difficulty running it well. They’ve paid too much for nursing homes and then they’re either stuck with either leases or bank payments or private equity payments that make providing care difficult. It’s hard to regulate against stupidity. It’s hard to regulate against people paying too much for an asset.”
Less Money, Less Staff, Less Quality
Only around a quarter of U.S. nursing homes are nonprofit organizations. Roughly 70 percent are for-profit. Most are part of corporate chains with related entities providing management and consulting services. 11 percent are owned by private equity firms.
Because the nursing home pays rent and management fees to related entities first, the facility has less money to pay for staff. Without safe staffing, caregivers are unable to meet the needs of the residents. The result is abuse, neglect, and caregiver burnout and turnover. AARP’s Susan Reinhard is senior vice president and director of the AARP Public Policy Institute. She explains:
“If you have less money, it’s going to have an effect. [Facilities] really start tightening down. They have less to spend on residents. Quality tends to suffer.”
Maybe CMS should require additional taxpayer funds go to resident care and services. The funds should not go to related entities that do not provide care to the residents.