ATI Contributor: Rebecca Dittrich

Since news of a coronavirus outbreak at a Washington nursing facility first broke in February 2020, nursing facilities have held the COVID-19 pandemic spotlight. A Google search for “nursing home and COVID-19” returns over 30 million news results, demonstrating the overwhelming expert and media attention on the subject. This public scrutiny of nursing facilities coupled with an increased emphasis on home and community-based services (HCBS) spending has guaranteed momentum in the conversation about the future of long-term services and supports (LTSS).

But these conversations rarely include difficult discussion about how we fund the nursing facility infrastructure of the future, including the role we expect private capital to play. They rarely address how to design public policy in a way that incentivizes investment while also ensuring high quality clinical operations and staffing. It’s easy to vilify capital. It’s harder to figure out how to leverage it to meet our policy goals. The policy conversation continues to hide from the fact that the vast majority of nursing facilities are owned by profit-maximizing companies, and that options for revitalizing the industry must have that backdrop in mind.

COVID-19 SHINES A SPOTLIGHT ON LTSS

For over a year, policy leaders, regulators, government investigators, and the public have condemned the more than 133,000 nursing facility resident and staff lives lost to COVID-19.[1] Critics have pointed to staffing shortages,[2] five-star ratings despite serious quality concerns,[3] and overcrowding[4] as a few reasons for such high rates of infection inside facilities. Facilities have responded that the shame and blame distracts from their ability to care for the residents they have been desperately trying to save, and it fails to account for the PPE shortages and other factors outside their control.[5] In fact, recent research found that the highest predictor of COVID-19 in a nursing facility was the prevalence of the disease in the community itself.[6]

The policy response to date has been twofold: proposing significant increases in funding for home and community-level care alternatives to nursing facilities and strengthening quality monitoring in nursing facilities. Both responses are appropriate. The increased HCBS support should be celebrated for the sizable expansion of services it could afford to Medicaid-eligible older adults preferring to age at home. And oversight is important to improving the care provided in the current nursing facility environment.

But, as many other experts have pointed out, we need much bigger changes to the nursing facility infrastructure and system. This includes addressing the age and design of buildings; the size, composition, and compensation of staff; and the way we measure, monitor, and enforce quality standards. Without wholesale changes, the hard lessons learned by the COVID-19 pandemic risk being for naught.

FOR EFFECTIVE SOLUTIONS, DON’T HIDE FROM HARD TRUTHS

The policy and business incentives that drive nursing facility infrastructure create a delicate, multi-layered, and fractured ecosystem – so it’s easy to make a failed policy decision with significant unintended consequences. For example, as a cost-saving measure to the Balanced Budget Act of 1997, Congress repealed the “Boren Amendment.” The Boren Amendment effectively set a floor for Medicaid nursing facility payment rates. Its repeal, along with changes in Medicare reimbursement, led to dramatic shifts in the underlying capital structure of many nursing facility companies. The long-term effects have been significant, including ramifications to the amount of funding available for labor in the buildings.

Solving the nursing facility infrastructure problem requires understanding the needs of many different stakeholders, including federal and state policymakers, Medicaid programs, consumers, operators, and investors. This needs to be a two-step process of stakeholder engagement: one, identifying the problems to be solved, and two, securing buy-in from all stakeholders whose needs must align with the ultimate solution. Current recommendations for re-envisioning nursing facility infrastructure, however, rarely consider number two, and so they fail to reflect system complexities and the diversity of stakeholder needs.

For example, recent research has highlighted the benefits of the Green House model – a nursing facility design centered around small-building concepts with individual rooms, common living areas, and flat staffing.[7] Studies of the Green House model have found positive health outcomes for residents, and it’s hard not to be impressed with the quality of life it affords.[8] However, no one has analyzed why these models have not scaled, and, in particular, what would make the approach attractive to real estate investors and lenders. There are reasons that the Green House model serves a largely white population from middle- and upper-middle-class backgrounds, and those limitations should be explored (and challenged).

Recommendations about revitalizing the industry frequently require a significant influx of capital,[9] but where will that money really come from? To scale new infrastructure design like the Green House model, what incentives do investors need? How should regulation change? If a new payment method is required, how can fraud and abuse concerns be minimized without stifling operators’ opportunities to innovate?

Improving access to HCBS doesn’t and shouldn’t eliminate the need for institutional care. To succeed in reimagining the role of nursing facilities along the LTSS spectrum, all relevant stakeholders must be part of the conversation. Industry-wide change will require balancing the competing interests of multiple parties while acknowledging their misaligned incentives – a balance that can only be achieved when the priorities of each group are openly known. So let’s start listening.

[1] CMS. (March 21, 2021). COVID-19 nursing home data. https://data.cms.gov/stories/s/bkwz-xpvg

[2] Grabowski, D. (March 11, 2021). Nursing homes need fixing. Here’s where to start. Politico. https://www.politico.com/news/2021/03/11/nursing-homes-pandemic-467548

[3] Silver-Greenberg, J. and Geberloff, R. (March 13, 2021). Maggots, rape and yet five stars: how U.S. ratings of nursing homes mislead the public. The New York Times. https://www.nytimes.com/2021/03/13/business/nursing-homes-ratings-medicare-covid.html

[4] Stockman et al. (April 17, 2021). ‘They’re death pits’: Coronavirus claims at least 6,900 lives in US nursing homes. The New York Times. https://www.nytimes.com/2020/04/17/us/coronavirus-nursing-homes.html

[5] Lamontagne, A. (May 29, 2020). Stop the shame and blame game at Life Care Center. Lowell Sun. https://www.lowellsun.com/2020/05/29/stop-the-shame-and-blame-game/

[6] Gorges, R. and Konetzka, R. T. 2020. Staffing levels and COVID-19 cases and outbreaks in U.S. nursing homes. J Am Geriatr Soc, 68(11), 2462-2466.

[7] Waters, R. (March 2021). The big idea behind a new model of small nursing homes. Health Affairs, 40(3), https://www.healthaffairs.org/doi/10.1377/hlthaff.2021.00081.

[8] Id.

[9] See Parkinson, M. and Sloan, K. S. (March 30, 2021). Applying the lessons of the COVID-19 pandemic to improve nursing homes. Morning Consult. https://morningconsult.com/opinions/applying-the-lessons-of-the-covid-19-pandemic-to-improve-nursing-homes/?mkt_tok=ODUwLVRBQS01MTEAAAF8Ig-bKHkPzBvUTxMFQyXDhPDp79Vtp2fVMV1a-vDKyTY1YC57WuVTOEY8bpxpfusO1OEBGqe_rGFS3A71fUwBFvc2cbRBrnOuj5WPpMEyJM1m

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