Nursing Shortage: What the Future Holds for Nursing Homes

The nursing shortage in the United States adds to the growing problem of how to provide appropriate care for senior citizens who need nursing home services. Nursing homes have lost funding in recent years while, at the same time, more and more senior citizens are in need of nursing home services- experts predict that by the year 2050, there will be 15,000,000 seniors who need long-term care. There are several factors that contribute to the nursing home shortage; if the economy improves, some of these problems may resolve themselves, but something still needs to be done. 

There Are Many Factors Contributing to the Decline of Nursing Homes

Over 9,000 nursing homes were built with federal dollars through the 1960s. With an increasing budget for the elderly, nursing home construction was opened up to non-profit organizations and by 1965, there were 300,000 nursing home residents across the country. Unfortunately, these “homes for the aged” were often under-regulated and resident mistreatment was prevalent, as was substandard care and living conditions.

But now that these federally-constructed nursing homes are getting older and medical reimbursement rates have dropped, administrators are unable to maintain structures. In addition to insufficient budgets, a lack of residents has contributed to a large number of nursing home closures. The areas with the most closures were predominantly rural, creating housing insecurity for already at-risk seniors who are often forced to move farther from their families to receive the aging services they need. 

With the introduction of more affordable home care and luxurious assisted living communities, nursing homes have become a relic of the past in the minds of many people. As people desire a high quality of life that was unfortunately not often offered in federal facilities, nursing homes have been shutting down across the country and people have been spending their healthcare dollars elsewhere. Below are some of the top reasons why nursing homes are closing, and a glimpse into what the future holds for senior care. 

Cuts in Reimbursement

Since the implementation of the Older Americans Act, most seniors rely on Medicare and Medicaid to help them pay for nursing home care. The implementation of Medicaid and Medicare and the Older Americans Act in 1965 made it possible for seniors to receive federal financial assistance to pay for at-home care and needed aging services. While there was an aging services budget of over $280.3 million in 1960, the budget has not increased to keep up with the number of people aging in America, where healthcare advances continue to increase the lifespan. Cuts in these programs significantly affect how many people can afford nursing care. In 2011, the federal government cut reimbursement to nursing homes from Medicare by 11 percent

The elder services budget in 2018 was $455.1 million, 62% more than what it was in 1965, though the number of seniors has risen to over 300 million in 2010. There is a clear need for senior services, as studies show that 93% of seniors use Medicare insurance for at least some of their medical costs, though half of long-term care needs need to be funded by other sources. Nursing homes tend to lose money on Medicaid patients, as Medicaid doesn’t pay for the entire cost of the patient’s treatment. However, it is illegal for Medicaid certified homes to turn any patient away who is on Medicaid and/or no longer has enough financial resources to pay for care. As a result, nursing homes don’t have the money they need to keep themselves open and provide appropriate care to all patients.

Many areas have very little funding, and other areas have none at all. In rural areas across the country, reimbursement rates can be $20 lower per day than in urban facilities, which adds up quickly when you consider the average nursing home stay is 270 days for a person who recovers and leaves, and 835 days for people who pass away while in the facility. According to the National Center for Health Statistics, nursing home facilities are more common in the West and Northeastern states, but many of these states have been experiencing nursing home closures as well. In 2019, there were record nursing home closures in many states:

  • In Washington state, where Medicaid reimbursement pays for 60% of nursing home care, there have been 31 nursing home closures between 2010 and 2019.
  • South Dakota nursing homes lose an average of $42 a day on Medicaid residents, and seven nursing homes have closed between 2016 and 2019.
  • On top of 20 closures in 2019, 95 more nursing homes in Massachusetts are at risk of closing in the near future due to lack of reimbursement causing negative margins for the past five years.

The main consequence of these funding problems is that many nursing homes have had to cut staff, and more cuts are expected in the future. Nursing homes simply cannot afford to pay for all of the staff they need to stay open or maintain updated facilities. This is a direct result of the lack of funding and patients’ inability to pay for nursing home care themselves. In addition to the consequences affecting corporations and seniors, healthcare workers themselves continue to struggle with low wages (and hard hours), creating a long-term care worker shortage as interest in the aging services industry wanes due to low quality of life for workers.

The Number of People Needing Long-Term Care Continues to Grow

While nursing homes are struggling to admit patients and care for them properly, the number of patients that need nursing home care services is steadily increasing. People are living longer–it’s not uncommon for people to live into their 90s or even reach 100 years of age–and the Baby Boomer generation is reaching retirement age. 

According to MSN Money, by 2030, 20 percent of the US population will be over 65, and the number of 85-year-olds and 100-year-olds will double or triple. Many of these people will need nursing care services. In 2016, the most common needs in nursing homes were bathing (96.7%) and dressing (92.7%), followed closely by toileting (92%). It’s safe to assume that the services people require will be similar in the future. A recent study by the CDC shows 83.5% of nursing home residents are over age 65. Of these people:

  • 18.2% are between 65 and 74
  • 26.7% are between 75 and 84
  • 38.6% are over age 85

In addition to needing help with activities of daily living, a large number of elders face the threat or ongoing challenge of Alzheimer’s disease and related dementias. Experts anticipate that when the first Baby Boomers turn 85 in 2031, more than 3 million people will be living with and needing care to manage their dementia. In 2019, approximately one in ten Americans over age 65 has Alzheimer’s disease, with the percentage of people living with dementia increasing with age:

  • 3% of those over 65 are diagnosed with some form of dementia
  • 17% of people between the ages of 75 to 84 have Alzheimer’s disease or another type of dementia
  • 32% of seniors over age 85 have dementia

This places additional pressure on the already strained healthcare system to provide care for an influx of people with extensive care needs. Nursing homes that want to be certified to care for those with dementia need to possess a few key features, including:

  • 24-hour overnight medical staff and security
  • Secured units that prevent those exhibiting wandering behaviors from leaving the facility
  • Special dietary and cognitive care activities designed for those with dementia
  • Cognitive care training for all staff interacting with those with dementia

While the direct care staff shortage has been a big problem for those in need of specialized long term care services, states have begun to implement policies to increase their local healthcare workforce. In 2020, 27 states have raised wages for direct care staff. Workforce development has also been a priority in the new long term care policies, with fifteen states having a direct care training initiative in place and another five being created in 2020. 

These programs are designed to attract quality healthcare workers and offer access to the education needed to earn licensure as a healthcare worker. The various strategies being used across the states to succeed in educating caregivers is by improving education and compensation for family caregivers, and offering higher pay to existing caregivers if they receive healthcare training. 

Alternatives to Nursing Home Care

While the number of nursing home facilities may be on the decline, assisted living facilities continue to be constructed and new forms of retirement communities have begun to emerge. The first assisted living type facilities were created in the late ’60s, targeted at retirees who wanted daily meals and a larger community of seniors to retire with. Medical services weren’t offered at these retirement communities, but residents were usually welcome to invite their personal nurses and some facilities offer on-call medical professionals. These first assisted living facilities were left largely unregulated for nearly two decades

A booming economy continued to improve healthcare standards and quality of life expectations, and seniors began to demand more access to a lifestyle they enjoyed. By 2016, there were 28,900 assisted living facilities and only 15,600 nursing homes. In addition to residential care facilities, home-care aging services grew with over 12,200 home health provider groups. Seniors today often report that their desired retirement setting is their own home, and the aging services industry has continued to try to meet this need by offering in-home services as well as more home-like retirement communities. 

Those with dementia needs can also find licensed nurses and caregivers to help them in residential care communities. In 2016, 14.3% of residential care communities featured a dementia wing, and 8.7% of them only served those with dementia. This is an improvement from the 8% of residential care communities that offered any specialized cognitive care for dementia in 2000, indicating those with Alzheimer’s have a growing number of options for alternatives to nursing care as well. Recent studies show that about 25% of assisted living facilities offer special dementia units.

Long-Term Care Is Changing to Meet Today’s Needs

Studies show that 8% of seniors wish to age in place rather than in a retirement facility. Expanded long-term care services at a state policy level have begun to address this need by adding services to the traditional Medicare model to assist those people with their aging-in-place efforts. While nursing home use has continued to decline in recent years, people that need long-term care services might find alternative options in their area. Healthcare policies take into account factors such as quality of life, and have been improving highly-requested programs like home-care waivers and expanded community support to help people that need help paying for services are able to continue enjoying their lives. 

Across the country, a majority of the states have implemented policy changes in 2019 and 2020 that improve community care access, including support for those living in their own homes. In 2019, 47 states had budgeted for community supports for seniors such as Home and Community Based Services waiver programs. In 2020, an additional eight states began to implement their own housing support programs.

To meet the growing need for affordable and easy-to-access aging services, most communities around the country have some sort of senior services department in addition to federal and state support networks. The aim of these non-profit and community centers are to help residents with services such as reduced fare on bus lines and dial-a-ride services to take seniors shopping and to medical appointments. Across the country, there are around 10,000 senior centers that help manage personal transportation services with the help of community case managers. These senior services case managers also arrange for seniors to utilize other community resources alongside transportation services, including:

  • Daily meals in the local community centers
  • Adult day programs to provide respite to caregivers
  • Social programs like art and gaming groups that give seniors safe and comfortable places to hang out with friends
  • Exercise programs, often offered free of charge

In addition to shifting the focus to client satisfaction in residential care facilities, with the use of community-based care, healthcare dollars spent on services can be redistributed through the local economy using community supports instead of relying on one company to maintain all needs. Due to policy changes based on community input from both healthcare providers and the aging community, seniors are beginning to find more options to improve their autonomy as well as potentially save money in the long run.

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