In the Nursing Home, Empty Beds and Quiet

In the Nursing Home, Empty Beds and Quiet

For quite 40 years, Morningside Ministries operated a home in San Antonio, caring for as many as 113 elderly residents. The facility, called Chandler Estate added a small independent living building within the 1980s and a good smaller assisted living center in the 90s, all on an equivalent four-acre campus.

The whole complex stands empty now. Like many skilled nursing facilities in recent years, Chandler Estate had seen its occupancy rate drop.

“Every year, it seemed a touch worse,” said Patrick Crump, chief executive of the nonprofit the organization, supported by several Protestant groups. “We were running at about 80 percent.”

Staff at the Chandler Estate took pride in its five-star rating on Medicare’s home Compare website.

But by the time the board of directors decided it had to shut the the property, only 80 of its beds were occupied about 70 percent.

Revenue from independent and assisted living couldn’t catch up on the losses incurred by the nursing home.

In February, the last resident was moved out. Morningside Ministries operate two other retirement communities within the San Antonio area; they took within the independent living and assisted living residents and about 30 home patients, absorbing most of the staff as well.

But quite 40 older people had to relocate to other nursing facilities or move out of town closer to family, and 30 staff members lost their jobs.

“There was some real sadness, tears, frustration,” Mr. Crump said. “It’s hard knowing you won’t be providing services to those older folks.”

At least the organization has the consolation of knowing that nursing homes across the country is grappling with the same problem.

The most recent quarterly survey from the National Investment Center for Seniors Housing and Care reported that almost one home bed in five now goes unused.

Occupancy has reached 81.7 percent, rock bottom level since the research organization began tracking this data in 2011, when it had been nearly 87 percent.

“It’s a big drop,” said Bill Kauffman, senior principal in the middle. “The industry as a whole is struggling, and a few operators are having difficulty.” Such national statistics mask considerable local differences.

“The best facilities still have one hundred pc occupancy and waiting lists — that’s how you know they’re good,” said Nicholas Castle, a health policy researcher at the University of Pittsburgh.

But in 2015, the National Center for Health Statistics reported that quite a 3rd of beds were empty in some states, including Illinois, Iowa, Nebraska, Oklahoma, and Utah. 

Texas wasn’t far behind. Nationally, “200 to 300 nursing homes close annually,” Dr. Castle said. The number of residents keeps shrinking, too, from 1.48 million in 2000 to 1.36 million in 2015, according to federal data.

Given an aging population, you’d think nursing homes would be dealing with the other problem — surging demand for their services.

But they also face growing financial strains and regulatory requirements intended to control costs, Mr. Kauffman pointed out.

Under the Affordable Care Act, as an example, hospitals face financial penalties for readmissions and a few have responded by designating patients as “under observation,” rather than admitting them as inpatients. After discharge, Medicare won’t cover skilled nursing care for these patients.

(Generally, Medicare pays for short-term rehabilitative care in nursing homes following a hospital stay; however, Medicaid, administered by the states, covers long-term care.) Moreover, “certain surgeries are migrating from inpatient to outpatient surgical centers,” Mr. Kauffman said. Medicare won’t cover skilled nursing for those patients, either.

The growth of Medicare Advantage plans, which now cover a third of Medicare beneficiaries also play a role.

“They have a keen interest in lowering costs, so maybe they divert people from skilled nursing to home care,” Mr. Kauffman said. “If you are doing to attend a nursing facility, rather than a 30-day stay, maybe the plan wants the patient to call at 17 days.”

At an equivalent time, nursing homes face stiffening competition. As their operators sometimes say themselves, they’re selling a product nobody wants to shop for.

“You have increased alternatives, like assisted living, and other ways for people to remain at home,” said Ruth Katz, senior vice chairman of public policy at Leading Age, which represents nonprofit senior service providers.

“When people find community alternatives, they use them whenever possible.”

Federal policy has helped propel this shift. For years, advocates protested that Medicaid covered care in nursing homes but not within the places people much preferred to measure. Congress paid attention and passed legislation in 2005.

Thirty years ago, 90 percent of Medicaid dollars for long-term care flowed to institutions and only 10 percent to home- and community-based services. Now, the proportions have flipped, and nursing homes get only 43 percent of Medicaid’s long-term care expenditures.

A report from the federal Accountability Office earlier this year acknowledged, for example, that Medicaid covers assisted living for 330,000 people. A demonstration the program called Money Follows the Person has moved quite 75,000 residents out of nursing homes and back into community settings.

It’s good news for consumers — but not so good for nursing homes.

The 31 largest metropolitan markets have 13,586 fewer home beds now than in late 2005, the investment center reports.

This could prove a temporary crisis. When the baby boomers enter their 80s and wish residential care, occupancy could pick up again.

Even now, nursing homes can turn a profit with lower occupancy by attracting more patients for short-term rehab. Medicare reimburses for those stays at higher rates than Medicaid pays for long-term care.

(About 80 percent of yank nursing homes are forprofit.) Facilities are bracing for a few tough years ahead, nonetheless. In casting about for additional revenue, they’re trying tactics like opening pharmacies and residential care agencies, and accepting sicker patients, including those on ventilators, at higher reimbursement rates.