Change is Coming to the Long Term Care Industry

Updated: Feb 15, 2021

When it comes to the consequences of the COVID-19 pandemic, there has been no industry affected more than this country’s nursing homes and long-term care facilities. According to an AARP report updated on February 11, 2021, more than 160,000 residents and staff of these facilities have died as a result of this novel coronavirus.

As if this information is not negative enough, new reports of investigations of some states that enacted COVID-19 orders that resulted in the deaths of nursing home patients, and an associated cover-up, continue to shake the confidence that families have in these facilities. Add to this the lack of new admissions and the tremendous elevation of costs as a result of staff overtime, PPE equipment, and renovations of rooms to comply with CDC requirements and it certainly paints a bleak outlook for those facilities when it comes to meeting operational costs for this year and for years to come.

According to the American Health Care Association, nursing homes and long-term care facilities will lose a total of “$22.6 billion in revenue during 2021” as occupancy rates remain at record lows. This, on top of an “$11.3 billion decline in 2020” brings the total financial toll of this pandemic to $34 billion, a tremendous loss for any industry to suffer, much less one that has been operationally foundering for years.

If there are any lessons that have emerged from this pandemic, it's that the current model of long-term care is not sustainable. And there is another truth, prior to the invasion of the virus, our system that provided services for our seniors was barely treading water, or as one geriatric care professional said, “we were already underwater and breathing air through a straw, but now, that straw is being plugged.”

Attorney RJ Connelly III

“It’s an easy answer to say that aging-in-place (staying in the home rather than seeking outside care) is a solution to this problem, but it really isn’t,” said Attorney RJ Connelly III, Certified Elder Law Attorney. “When you look at the numbers, more than half of our seniors aged 65 and older need long-term care services and supports, so aging in place is not an option for many of them.”

“In the next ten years, the number of older adults will increase by nearly 18 million,” Connelly continued. “What this means is that 1 in 5 American citizens will be 65 years old or above, so access to long-term care is a critical piece of the health care continuum for our aging country. It has been my experience, in speaking with our clients and their families, that long-term care must be an available option.”

Connelly’s statements are backed up by a survey that was recently conducted by LeadingAge/NORC with adults aged 60-72. The survey found that 42% would rather be living “somewhere else” if they suffered a physical disability or had a cognitive decline that required extensive support with daily activities. “This is what our long-term care facilities do and why they exist, we can’t lose them,” said Connelly.

Funding Issues

When it comes to funding, about 60% of revenue comes from Medicaid, which covers anywhere from 70% to 80% of operating costs. The difference is usually made up through Medicare and private pay insurance. Although this revenue stream was slowly declining, the pandemic has put this decline into overdrive.

Additional funding that nursing facilities were able to capture came from short-term rehab stays following elective surgical procedures, but with the pandemic shutting these down, a major source of revenue was lost. Then add the negative publicity from COVID to the mix and those who would have opted for a stint in rehab following an illness or surgery decided to return home and use home health care instead, furthering the revenue loss.

The result has been predictable. The American Healthcare Association has reported that more than half of this country’s nursing homes are operating at a loss with nearly one in five beds going empty. And since the onset of the pandemic, 97% of long-term care facilities have lost money “due to increased costs for infectious disease equipment, testing, training and labor costs.”

The revenue losses have a snowball effect. Some smaller nursing homes that provide a home-like environment that seniors sorely need could lose their mortgages as those who had some cash reserves lost them to the increased costs of running the facility during the COVID crisis.

Without residents and pending new admissions, they will not have the income to pay for equipment, those who need repeated testing, utilities, staffing, and other fixed expenses. The staffing cuts, those who are the heart and soul of these facilities, will hurt the most. If the home is not able to meet the state requirements for staffing levels, it will have no choice but to close. This will then put a strain on larger facilities that may not be able to meet the need. It is a crisis in the making.

Exposing the truth of the system

But as we said earlier, long-term care providers were struggling to make ends meet long before COVID came into play. And to be honest, COVID was like Toto the dog in the “Wizard of Oz”, pulling back the curtain and exposing the secret that the long-term care industry has struggled with for years -- there are serious flaws in the way we, as a society, have cared for our most vulnerable.

The responsibility for this begins at the federal level of healthcare management, and not with the dedicated administrators and employees of our long term care facilities, who usually end up facing all the criticism and negative reporting.

The Genesis of the Problem

The “patient-centered care” model and other health speak like the “continuum of care planning”, although sounding impressive, is aimed at cutting costs, plain and simple. These cost-cutting measures end up rolling downhill and stopping at the door of our long-term care facilities.

For instance, hospitals are discharging patients faster and sicker than in the past, defining down what appropriate discharge criteria are. For those who cannot return home, hospital discharge planners are in constant search of beds to accept patients in need of rehab or just long term care. In many cases, these patients require complex care management, requiring long-term care facilities to raise operating costs to meet these needs.

In the past, older patients often needed just custodial care with little in the way of medical interventions needed, but with the increase in technology and better treatment availabilities, illnesses that often resulted in death are now managed with medications and therapies. As a result, after a brief hospital stay, those who are now arriving in nursing homes often require elaborate medication and therapeutic regimens that could last for years or even decades.

Another problem the industry is facing is the rise in younger patients who bring with them challenges never before seen by long-term care facilities. Many have disabilities caused by neurological disorders, traumas, drug abuse, and mental illnesses. This taxes the staff who may now be forced to provide services unheard of in the past, including physical restraints, once the domain of psychiatric settings.

Christopher E. Laxton, executive director of AMDA (The Society for Post-Acute and Long-Term Care Medicine), said that the nursing home model is not appropriate for this fast-growing sub-population. “You’ve essentially turned the nursing home into a step-down unit of a hospital without staffing it adequately.” And home care is not the answer either as that model is structured for short-term use with an insurance system that wants to cut off care and support as soon as possible.

Christopher E. Laxton

This festering problem has existed for years, forcing administrators and staff to apply band-aids to a gaping wound that was rapidly bleeding out. Unfortunately. our current approach to taking care of the most vulnerable of our society has gone down in flames. So what's the answer?

"It's become readily apparent that our long-term care system is woefully outdated. But as I said before, we need these facilities more than ever," said Connelly. "What we truly need is an overhaul of the care continuum for older adults and those with disabilities that includes using a combination of community care and in-home services as alternatives for residential placement and long-term care settings for those who need that level of service."

"And," Connelly stressed, "an affordable way to do this that does not punish those who have worked their entire lives building and saving in order to provide for the family, yet to face losing it all if they need long term care. This requires more realistic reimbursement rates from Medicaid and Medicare and more affordable forms of long-term care insurance so that providers of these services are adequately compensated."

Given what Attorney Connelly said and those in the long-term care industry who have called for change, is someone finally listening? It appears so.

Change is Coming

In Rhode Island, Linn Health and Rehabilitation, part of the Aldersbridge Communities, was one of eight nursing facilities in the state to be awarded a $1 million grant from the Executive Office of Health and Human Services as part of the Governor's Long-Term Services and Supports (LTSS) Resiliency Program created in response to the COVID-19 pandemic.

Richard Gamache, CEO

The Chief Executive Officer of Aldersbridge Communities, Richard Gamache, was a guest on a recent Southcoast Seniors Radio Magazine show on am790 WPRV, and spoke about the grant, which addresses his concerns and the concerns of many in the senior care field.

“This LTSS competitive grant opportunity was offered to support change, resiliency, and diversification in nursing home business models. We responded with our innovative plans, and are very grateful to have been awarded that grant. Before the COVID-19 pandemic hit, our Board of Trustees and leadership had been visioning what life in a congregate setting should look like. This grant is our stepping stone to the future of elder care at Linn," said Gamache. And what does this vision look like?

The first part of Linn Health & Rehabilitation’s work plan calls for transforming 11 skilled nursing and long-term care rooms from semi-private to private, each equipped with the latest in ventilation, lighting, and technology for infection control, and an ensuite private bathroom with a shower. The renovated rooms will be kept separate from other rooms, helping to control the spread of germs and for potential use as an infectious disease isolation unit should the need arise.

“Nursing homes like ours were built in the 1970s and haven’t changed much architecturally over the years,” noted Gamache. “Our most vulnerable population – elders – are the most susceptible to illness and viral spread, yet they often share rooms and washrooms in institutional settings. We are confident our new private rooms will be appreciated by residents, their families, direct care staff, and referral sources alike.”

The second part of the work plan to be funded by the grant is to introduce a new initiative called the Linn Health Navigator, aimed at keeping older persons in the community living independently in their own homes. Elders would enroll in this program to be linked with a community network of social services and other needs such as handyman or errand services. It will be staffed by a care manager who can monitor the health status of enrollees, including those discharged back home following successful care and treatment at Linn Health & Rehabilitation.

Linn Health and Rehabilitation

“We recognize that people want to stay in their homes for as long as possible, and they just need the right support. Sometimes it’s as simple as getting groceries or help to shovel snow. But it can also be ensuring their diet is nutritious and not deficient in some way to cause or trigger an acute illness, or making sure the medications they are taking don’t cause an adverse reaction to land them in the Emergency Room,” explains Gamache.

“The Navigator Program can help reduce Medicare and Medicaid costs by eliminating unnecessary hospitalizations, and can delay or even prevent relocation to a nursing home or other congregate care setting,” explains Gamache. “It can serve as a national model for pre-emptive care.”

The LTSS grant was established by the State of Rhode Island to help eligible nursing homes recoup financial losses realized during the COVID-19 crisis. In addition to reducing their 2020 losses, Linn Health & Rehabilitation has earmarked a portion of the grant funds for the conversion project development and for staffing the Navigator Program care manager position.

“We are excited to begin our initial, transformative steps to realize our mission of empowering those in our care to live with dignity and comfort,” states Gamache, a leading expert on ageism who has overseen many groundbreaking eldercare initiatives throughout the region during his 40-year career such as the creation of R.I.’s first sub-acute care program in 1992 and establishing the first two elder-friendly hospital ER departments in New England in 2012. “We look forward to supporting and improving the health outcomes for all Rhode Islanders who use our services.”

"We at Connelly Law totally support this new strategy aimed at fixing the fundamental flaws in institutional and noninstitutional care," said Connelly. "I'm proud to see southern New England, and specifically Rhode Island, leading the way in addressing this problem."

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