Long-Term Care Industry

Long-Term Care Industry

Long-Term Care Industry

Nearly two years after COVID-19 began spreading across the United States, the long-term care industry continues to feel the brutal impact from the pandemic. The industry had already been struggling financially and the pandemic only made matters worse.

An analysis by the American Health Care Association and National Center for Assisted Living (AHCA/NCAL) estimates that the long-term care industry is expected to lose $94 billion by the end of 2021. The AHCA represents nursing homes, assisted living communities, and facilities for individuals with disabilities. The AHCA represents assisted living providers through its NCAL.

According to the analysis, an increase in routine testing, hiring more workers, and purchasing personal protective equipment were among the reasons for increased costs at long-term care facilities in 2020.

A decline in occupancy at long-term care facilities has also affected finances. AHCA/NCAL President and CEO Mark Parkinson called the decline in occupancy a “business nightmare.” Parkinson said the long-term care industry entered the pandemic with an occupancy level of about 80 percent. By June 1, 2020, occupancy had dropped to 72 percent where it stayed until November 1 when it dropped to 71 percent. By February 2021, however, the occupancy level had dipped to 67 percent.

Emmett Reed, executive director of the Florida Health Care Association, told a Florida State Senate committee in February that if the industry did not see an increase in occupancy over the next six or seven months, “you’re going to start seeing nursing homes in a very dire situation financially. It’s just, the margins are razor-thin.”

The AHCA/NCAL analysis shows that without immediate assistance, more than 1,600 nursing homes could close by the end of the year, which is 10 times the number of facilities that closed in 2020.

And, that’s not all. With the closures of nursing homes come job losses of direct-care staff, considered the backbone of senior living facilities. The turnover rate at nursing facilities was high prior to the pandemic, mostly due to the low pay and demanding work.

A Kaiser Family Foundation (KFF) analysis shows that long-term care workers are predominately female and overall, are disproportionately lower-wage workers. Of the 4.5 million long-term care workers, nearly 4 in 10 are 50 years old and older. To date, the coronavirus disease has killed more than 186,700 long-term care residents and staff nationwide, according to data from KFF.

More People Want Home-Based Care

The COVID-19 pandemic highlighted the benefits of home-based care, said Terry Fulmer, president of the John A. Hartford Foundation, a nonprofit that works to improve care for older adults.

“The shift to delivering more long-term services and supports in the home will only continue, and it is highly likely we will see new and creative business models supported by technology,” Fulmer told ABC News.

Long-term care leaders are under pressure to improve outdated long-term care models in nursing facilities while creating new home-based models. Some senior living communities are already making changes. For instance, California is the test site for a hybrid home health/assisted living model that involves taking clusters of homes in residential neighborhoods and licensing each of them for six or fewer residents to bring a “home health environment” to the facilities.

Many of the “new models” are being developed and tested at facilities in the private sector rather in facilities that accept government funding from Medicare and Medicaid. According to Dr. Robyn Stone, co-director of the LeadingAge Long Term Services and Supports Center at the University of Massachusetts, this brings up the question of “will these new models just be available to people who can pay” and leave nursing facilities as homes “just for the really disadvantaged?”

The COVID-19 pandemic fueled seniors’ desire to age in place after long-term care facilities closed its doors to non-essential visitors, to the dismay of residents, their families, and friends. The facilities banned visitors as a way to reduce residents’ exposure to COVID-19. Some family members, however, were able to stay outdoors at a distance from the building to wave or sing as their loved ones looked at them from out of a window.

While facilities have since reopened to non-essential visitors with some restrictions and the COVID-19 vaccinations have reduced the threat of the virus to residents, the closures left unpleasant memories.

With that—and other issues—in mind, 88 percent of Americans say they would rather care for their elderly loved ones at home instead of moving them into a long-term care facility, according to research by the Associated Press National Opinion Research Center.

Who Pays For Long-Term Care?

Older adults may want to age in place, but this raises the question of who is going to pay for long-term care at home, especially for low-income seniors.
In addition to long-term care leaders, consumers also want politicians to make improvements to and provide funding for long-term care. According to the Associated Press study, more families want the government to support home-based care for low-income seniors.

Currently, Medicare and Medicaid pay a limited amount to cover some in-home services. Medicare, for instance, pays for skilled nursing care and home health aide services at home. Medicaid pays for limited home care services but for low-income families and individuals.

At the same time, the AHCA/NCAL has asked Congress to appropriate $20 billion to the long-term care industry either through Medicaid or the federal COVID-19 Cares Provider Relief Fund.

Recently, Congresswoman Jan Schakowsky (D-IL), co-chair of the House Democrats’ Task Force on Aging & Families, and Senator Richard Blumenthal (D-CT), a member of the Senate Aging Committee introduced a bill to improve the quality of care at nursing homes.

Schakowsky sees this as a “moment of opportunity” to make changes in long-term care for the elderly. In a statement about the legislation, Schakowsky said that a failure to make changes by addressing the root problems will only fuel more cases of abuse, neglect, and premature death. “It could get worse, not better,” she said.

Source Links:

https://www.hcinnovationgroup.com/finance-revenue-cycle/news/21210701/analysis-longterm-care-industry-expected-to-lose-94b-by-end-of-2021
https://www.mcknightsseniorliving.com/home/news/business-daily-news/parkinson-skilled-nursing-still-amid-business-nightmare/
https://abcnews.go.com/US/long-term-care-industry-facing-pandemic-pushes-families/story?id=77530232
https://www.kff.org/coronavirus-covid-19/issue-brief/covid-19-and-workers-at-risk-examining-the-long-term-care-workforce/
https://www.reuters.com/legal/litigation/covid-19s-lasting-impact-long-term-care-assets-2021-07-12/
https://www.nbcnews.com/politics/politics-news/america-now-knows-nursing-homes-are-broken-does-anyone-care-n1259766
https://www.ahcancal.org/News-and-Communications/Press-Releases/Pages/Long-Term-Care-Faces-Worst-Financial-Crisis-In-Years;-Closures-Loom-Without-Additional-Funding.aspx
https://schakowsky.house.gov/media/press-releases/schakowsky-blumenthal-introduce-bill-improve-quality-care-nursing-homes

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