A systemic underinvestment in senior care has left workers and those they care for exposed to unnecessary risk, calling into question nursing homes’ viability, operators and policy experts said.
While some providers were able to adapt more quickly than others, the response to the pandemic has largely been a reactive one. They are hopeful that the crisis will shape a new approach to post-acute and long-term care, both from an operational and philosophical perspective, but to this point the outlook has been bleak.
“Our nation has decided that elderly people are dispensable,” said Daniel Reingold, CEO of Hebrew Home at Riverdale in New York City. “We are prepared to reopen the country knowing that most of the people who will suffer and die are the old and infirmed people in nursing homes, instead of recognizing the ageism in this country.”
More immediately, skilled-nursing, assisted-living and other senior-care facilities need a greater share of the COVID-19 relief funding as well as priority testing and equipment, advocates said. Although long-term care facilities have been the most susceptible to the outbreak, they were among the last groups to get personal protective equipment, testing and funding, said Terry Fulmer, president of the John A. Hartford Foundation, which works to improve care for older adults. “We love to say we know someone who is 100 years old, but we as a society look the other way in ensuring we provide quality care.”
Taking a longer view, advocates are pushing for a comprehensive investment in public health, an improved payment structure, a redesign of physical space, a revamped regulatory framework and a more cohesive care continuum. “Our entire healthcare system is set up to do transactions as efficiently as possible because they all follow the money, whether you are for-profit or not-for-profit,” said Vincent Mor, professor of health services, policy and practice at Brown University’s School of Public Health. “The virus has shown all the flaws that are apparent in a maximally efficient, transaction-based healthcare system.”
Cross-sector partnerships have helped, but they haven’t been a panacea. Hebrew Home at Riverdale teamed up with New York-Presbyterian to help the long-term care provider equip its COVID-19 recovery building. During the early days of the pandemic, New York-Presbyterian provided additional PPE, allowing Hebrew Home to convert an entire building to accommodate about 150 COVID-19 patients.
Having a trusted hospital affiliate has been critical, said Reingold, noting that the virus knocked out about 30% of the workforce. “To have a big brother to help us with PPE, a partner that has the confidence that they have a high-quality long-term care facility to discharge to, is huge,” he said.
Residents account for about a quarter of COVID-19 related deaths even though less than 0.5% of the U.S. population live in one. In some states like Massachusetts, that share exceeds 50%.
It is such an insidious threat because workers and patients can carry the virus without symptoms, and then it spreads quickly through these communal settings.
“The level of intensity and severity of the virus is different than anything we have seen before; its unpredictable nature is hard to prepare for and respond to,” said Alice Bonner, director of strategic partnerships at Johns Hopkins’ Center for Innovation Care in Aging who started working in nursing homes when she was 19 years old.
Although nursing homes have been some of the hardest-hit facilities, the federal government didn’t directly send masks, gloves, gowns and other PPE until late April.
Senior-care advocacy groups argue that it’s time that the country rallies around long-term care residents. “Just like hospitals, we have called for help. In our case, nobody has listened,” the American Health Care Association and National Center of Assisted Living, wrote in an email to Modern Healthcare. “Plain and simple, whether it’s federal, state or local health agencies, long-term care needs to be a priority for supplies and help. We need adequate testing and PPE. We need help with finding more staff. And we need it now.”
The relief provided nursing homes seems low relative to their value, according to industry backers. “These are some of the lowest-paid workers, who despite having really dangerous jobs, they are going to work, caring for individuals and doing the best they can under challenging circumstances,” said Dr. Maria Torroella Carney, chief of geriatric and palliative medicine at Northwell Health in New York’s Long Island. “You’re not hearing heroic stories of how they stayed with patients when they were dying.”
In terms of funding, HHS began sending nearly $5 billion in grants to skilled-nursing facilities on May 22 to help improve their cash flow as revenue dried up and COVID-19-related expenses surged. But SNFs only received $3.2 billion of the $100 billion in Medicare advanced payments that CMS sent to providers. Acute-care and critical-access hospitals had received more than $80 billion as of May 2.
COVID-19 testing distribution has also lagged, said David Parker, president of the senior-care division of ProMedica, noting that prisons were a priority before skilled-nursing and assisted-living facilities in some states. “Throughout the U.S. we have not been a priority for testing from the outset of this,” he said. “Crisis testing was for hospitals and hospital workers. We are just now being listed as a priority when we are the front lines of this crisis. And we still can’t get tests.”
New York Gov. Andrew Cuomo mandated the state’s nursing homes to test employees twice a week. That level of testing, PPE and other related expenses will cost Hebrew Home, which has 1,200 employees, around $200,000 a week, Reingold said. All the testing kits are provided by the state Health Department, but facilities must pay processing costs. “That is an enormous financial and logistical hurdle,” he said.
Just testing staff and residents once in all 1,700 SNFs in the U.S. would cost nearly $440 million, the AHCA estimates. It would cost New York’s 619 SNFs nearly $34 million. When factoring in assisted-living communities, the projected cost jumps to more than $672 million nationwide. One nursing home had spent $700,000 more than usual for cleaning, additional staff, testing and new equipment through mid-May, Fulmer said. “Nursing homes will close unless the federal government comes in. They just can’t survive.”
ProMedica, which has around 44,000 employees who care for about 30,000 patients, is paying 200 to 300 times what it was paying for PPE prior to the pandemic, executives said. The cost of a mask has increased from around 5 cents to more than a dollar, said Brian Jurutka, president of the National Investment Center for Seniors Housing & Care.
While the new testing requirements are reimbursed in the SNF Medicare Part A bundle, the costs are considerable. Depending on local market factors and state requirements, the tests may cost up to $500 each and may need to be repeated during a stay, according to the AHCA.
“Such testing costs quickly would erode Medicare Part A payment coverage of a stay,” the association said.
There isn’t much slack to accommodate reduced revenue and higher expenses. Margins at SNFs fell to 0.5% in 2017, down from 0.7% in 2016, according to the Medicare Payment Advisory Commission.
While margins on the Medicare share of their business have remained in the double digits for two decades, according to MedPAC, the average non-Medicare margin, which includes Medicaid and private insurers, was -2.4% in both 2016 and 2017.
“Frankly, a lot of nursing homes aren’t going to make it through this,” Reingold said. “The financial impact on us and our colleagues is very significant. It will be a while before post-acute care rebounds—a lot of people are not going to want to go to a nursing home.”
The nursing home industry rests on a tenuous business model, said David Grabowski, a professor at Harvard Medical School and healthcare policy researcher.
Some are short-stay patients coming from the hospital—largely Medicare beneficiaries recovering from procedures like knee and hip replacements. While they are more lucrative, they typically only account for about 20% of a nursing home’s bed days, and they were virtually wiped out through the first two months of the pandemic. The rest are long-term residents, largely financed by Medicaid, who often have higher rates of cognitive impairment.
Nursing homes are left with residents they largely lose money on, which has pushed them to the brink as staffing and supply costs surge, Grabowski said. “We need to realign those two payers more closely with the true cost of providing care—it makes no sense to have a system where nursing homes are forced to cross-subsidize one government payer with another,” he said.
There has always been misalignment between the business model and care model of the post-acute sector, said Dr. Jay LaBine, chief medical officer at naviHealth.
Nursing homes should be better segmented into long-term care providers or shorter-term post-acute recovery facilities, experts said. “The goals, criteria and surveillance of those two environments are very different,” said Carney, adding that long-term facilities should have less of a medical focus and be more sub-acute. “But we are conflicted in what they are as a society.”
Meanwhile, fewer Medicare beneficiaries are getting treated by SNFs across the country. Utilization in the Northeast fell the most, moving from 1,675 SNF days per 1,000 beneficiaries in 2007 to 1,177 in 2017, according to HMP Metrics.
Nursing homes that are predominantly dependent on Medicaid reimbursement are more likely to close. They typically have lower staffing levels, are located in poorer neighborhoods and change ownership more often, Grabowski said.
Since June 2015, 555 U.S. nursing homes have closed, which represents about 4% of all nursing homes, according to a February report from LeadingAge. “They are systematically underfunded,” he said.
Only about 2.6% of the $3.65 trillion that was spent on healthcare in 2018 was directed to government public health activities, leaving communal senior-care settings particularly vulnerable.
Dollars have to shift, said Dr. Robyn Stone, senior vice president of research at LeadingAge, which represents about 2,000 not-for-profit nursing homes. “Our public health infrastructure has not sufficiently understood or been supported in developing the competencies around the special needs of older adults,” she said. “All of this is exposing the poor underbelly of the system.”
Hebrew Home’s Reingold pointed to varying ownership models as part of the problem, claiming that for-profit providers prioritize their investors. While there isn’t definitive evidence on how ownership structure affects care quality at SNFs, the sector has seen significant consolidation and private equity investment.
As long-term care providers consolidate, their parent companies are trying to manage their facilities more efficiently by shifting staff between homes based on demand, said Fred Bentley, managing director at Avalere.
“That causes huge problems because staff are carriers and don’t realize it,” he said.
More SNFs have been generating liquidity by selling real estate assets to private equity firms, which then lease back the space to the operator.
“In good times that strategy has largely worked, but in times of crisis, I worry that it is a bit like a landlord and tenant,” Grabowski said. “The leases aren’t flexible in terms of what is happening during the pandemic, and conversations aren’t often how to best direct dollars to make certain that it is going to PPE and staff and not in the pockets of the private equity owner.”
Over the short term, skilled-nursing facilities should establish “centers of excellence” models for facilities outfitted for exclusively treating COVID-19 patients, Grabowski said.
Taking a longer view, increasing investment in hospital-at-home programs can alleviate some of the burden on long-term care facilities, although staffing will be an obstacle, experts said, noting that telehealth can mitigate access issues. “Investment in the workforce is a huge piece of this,” Stone said. “Aides and certified nursing assistants do the lion’s share of care but there is little investment in them.”
“We need to figure out how to make long-term care an attractive career,” Reingold said.
Tweaking reimbursement may help pay for these changes, experts said. Mor and Grabowski suggested that Medicaid must pay a higher rate commensurate with the costs of delivering high-quality long-term care to frail older adults. That will require greater federal contributions in models that integrate medical care with social needs of patients are required, they said.
Two examples are Medicare Advantage institutional special needs plans and nursing home-led accountable care organizations.
But this requires a perspective change that facilitates more collaboration between doctors and advanced practice practitioners, nursing staff and therapists, Mor said. “We should probably be thinking about population-based medicine much more broadly,” said Mor, suggesting some kind of capitated model.
Northwell has been facilitating phone calls at least once a week with high-volume referral partners to discuss the latest strategies on medical guidance, infection control, avoiding unnecessary admissions, PPE and testing, Carney said. The Hartford Foundation is partnering with the Institute for Healthcare Improvement to offer 20-minute national huddles to better coordinate care and mitigate COVID-19.
“The pandemic is showing us there is no true cohesive infrastructure here that integrates skilled nursing as part of these communities,” Johns Hopkins’ Bonner said. “Many communities don’t have people in critical positions who understand what is happening in nursing homes.”
Too many groups oversee post-acute care, said Bonner, noting CMS, the Health Resources and Services Administration, the Agency for Healthcare Research and Quality and others all play different roles. “There needs to be a bigger national strategy governed by one agency,” she said. “Next is advocacy. Where is the public outcry over the way we are treating older adults? It is unconscionable. We need to fix it, and fix it now.”
Fear often impedes a coordinated response, experts said.
“We have been flying blind somewhat about the extent of the problem—some of that is rooted in nursing homes that are not willing to share their data because they are worried about litigation, punishment from the government or bad press,” Grabowski said.
Compliance surveys drive operational changes and that shouldn’t be the case, Fulmer said. “I know surveyors don’t try to make organizations miserable, but it does come down to that sometimes. Where is the balance of getting these places surveyed so they can float problems and fix them versus enacting penalties and regulations?”
From now on, Hebrew Home will plan to have a two-month supply of PPE on hand, said Reingold, noting that they have to be wary of which types they store since the latex used in some surgical masks deteriorates.
Staffing plans will need to factor in 30% of direct care staff not being available. Residents and families will need to connect virtually. SNFs will need to be transparent and accountable in their infection rates, Reingold said. They will also need to have more cash on hand, he said. As for the pandemic and related operations, Reingold told his staff that they plan “this to be the way of life for two years.”
“We as a society need to figure out what we’re going to do to protect these people,” he said. “Or are they just not worth it?”
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