Nursing Homes Face Imminent Closures Without Financial Support from Congress

Nursing homes across the country are in economic turmoil. Long-standing financial shortfalls, largely due to Medicaid underfunding, have been magnified by the COVID-19 pandemic. In addition, the pandemic has worsened chronic workforce shortages and has contributed to a drastic decline in patient census. Many nursing homes were already operating at a loss, and without immediate financial assistance, closures are imminent. 

As Modern Healthcare reports, “The pandemic has thrown the long-term care industry into a tailspin.” Andy Edeburn, a principal at consulting organization Premier, said, “Not all nursing homes are going to come back,” and added, “I don’t know that the nursing home industry will ever go back to the way it was … It’s an industry in crisis for a number of reasons.” 

The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) estimates that within a two-year period (2020-2021), the long term care industry will lose $94 billion due to the increased costs needed to fight the pandemic and declining revenues. For example, in 2020 alone, nursing homes spent roughly $30 billion on personal protective equipment (PPE) and additional staffing. 

Nursing homes experienced fewer short-term stays amid the pandemic, such as patients coming from the hospital for physical therapy and rehabilitation. From 2020 to 2021, nursing home occupancy declined by 16.5 percent to 68.5 percent. 

More than 1,600 nursing homes could close this year as a result of mounting financial challenges. Closures have a devastating impact on residents, their families, and staff. When a nursing home closes, vulnerable seniors are uprooted from their communities and forced to find new care options. The average age of a nursing home resident is 85 – most of whom have multiple underlying health conditions. These residents require a high level of specialized care that in-home care is often unable to provide. 

AHCA and LeadingAge have proposed the Care For Our Seniors Act – a package of policy reforms that will help address many of the long-standing challenges in America’s nursing homes. However, implementation will not be possible without a significant investment from Congress and state governments – this includes immediate and long-term solutions to address chronic Medicaid underfunding. Sixty percent of nursing home residents rely on Medicaid for their daily care, and without a commitment from lawmakers to increase Medicaid reimbursement rates, most nursing homes will be unable to afford the substantive reforms required to continue improving quality of care. 

Nursing homes care for our nation’s most vulnerable population, and demand for long term care services will only increase in the years to come. Without support from federal and state lawmakers, financial challenges will continue. We must work together to improve nursing home care and ensure all seniors have access to high-quality long term care options. 

ABOUT AHCA/NCAL 
The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) represents more than 14,000 non-profit and proprietary skilled nursing centers, assisted living communities, sub-acute centers and homes for individuals with intellectual and development disabilities. By delivering solutions for quality care, AHCA/NCAL aims to improve the lives of the millions of frail, elderly and individuals with disabilities who receive long term or post-acute care in our member facilities each day. For more information, please visit www.ahcancal.org.