Welcome to another edition of Financial Fitness Friday. Today is April 23rd, 2021, and today we’re going to talk about the nursing home crisis.
Nursing homes are in real trouble, and this is an issue that we need to address, especially in the midst of a global pandemic, and a rapidly aging population.
A recent study learned that 65% of the over 15,000 nursing homes in the United States are operating at a loss.
One-third of all nursing homes believe they will close within a year.
How can nursing homes deliver quality care if they are running out of money?
Of course, lobbying groups are calling on the Biden administration to earmark $20 billion for nursing homes in a new Covid-19 relief bill.
They argue that the first $20 billion dollar injection from last year’s CARES Act wasn’t sufficient to help these institutions, who are drowning in the unexpected costs related to the pandemic.
What happens if the government doesn’t come through with more stimulus for the nursing home industry?
Where does that leave the patients? Where does that leave the families?
In addition, finding a good nursing home is almost impossible because the information provided by nursing homes to the public is designed to mislead rather than inform (I’ve linked an eye-opening article below about this very fact).
During the coronavirus pandemic, many of these nursing homes were locked down and were unavailable for prospective residents or their families to see firsthand. So the rating system seemed absolutely essential…
But a New York Times investigation, based on the most comprehensive analysis of the data, found that the rating system is broken.
Despite years of warnings, the system provided a badly distorted picture of the quality of care at the nation’s nursing homes. Many relied on “sleight-of-hand maneuvers” to improve their ratings and hide the shortcomings that contributed to the disaster when the pandemic struck.
The rating program is run by the U.S. Centers for Medicare & Medicaid Services (CMS).
It relies on a combination of self-reported data from the nursing homes, and on-site examinations by state health inspectors.
Nursing homes receive scores based on:
- How they fare in those inspections
- How much time nurses spend with residents
- The quality of care that residents receive.
Those three grades are then combined into an overarching star rating for each nursing home.
To evaluate the ratings’ reliability, The Times built a database to analyze several facts & figures, including:
- Millions of payroll records to determine how much hands-on care nursing homes actually provide their residents
- They combed through 373,000 reports by state inspectors
- Examined financial statements submitted to the government by more than 10,000 nursing homes
Among The Times’s findings:
- Much of the information submitted to C.M.S. is wrong. Almost always, that incorrect information makes the homes seem cleaner and safer than they are.
- Some nursing homes inflate their staffing levels by, for example, including employees who are on vacation.
- The number of patients on dangerous antipsychotic medications is frequently understated.
- Residents’ accidents and health problems often go unreported
- In one sign of the problems with the self-reported data, nursing homes that earn five stars for their quality of care are nearly as likely to flunk in-person inspections as to ace them. But the government rarely audits the nursing homes’ data.
- Data suggest that at least some nursing homes know in advance about what are supposed to be surprise inspections. Health inspectors still routinely found problems with abuse and neglect at five-star facilities, yet they rarely deemed the infractions serious enough to merit lower ratings.
- The 5-Star rating masked other serious problems, such as residents who developed bedsores so severe that their bones were exposed. Others lost the ability to move.
- Of the more than 3,500 homes rated with 5 stars, over 2,400 were cited for problems with infection control or patient abuse.
- People at five-star facilities were roughly as likely to die of COVID-19 as those residents at one-star homes!
But the most important impact may be that the nursing home industry was ill-equipped for the pandemic. The rating system allowed facilities to score high grades without upgrading the care they provided.
Charlene Harrington, who sits on a board that advises C.M.S. on the rating system said, “They were working to improve their ratings, but not their quality.”
She went on to say, “The problems with the five-star system left these homes less prepared in the pandemic. They were allowed to not have enough staffing, and they were allowed to ignore infection-control deficiencies, so they had poorer quality than the public knew about, and they were in the worst position to manage Covid.”
Why are the problems with nursing homes such an important issue to discuss RIGHT NOW?
Well certainly, we’re not out of the woods as far as the coronavirus pandemic goes.
But even looking into the future, simply consider this – there will be 140 million Americans turning 65 between now and 2045… where will we get enough money to support this aging demographic– and where will we get enough young people to work in these nursing homes?
Don’t you see?
Isn’t the paradigm changing?
Won’t we see family members taking on responsibility for the care of their loved ones more and more often?
Won’t that require different planning, and doesn’t that imply that in order to have better outcomes, families will have to work together?
If they don’t learn to work together, families could be harmed irreparably.
And finally, to put the exclamation point on this discussion: do you realize that some estimates say that nearly 40% of the people who died of COVID-19, did so in nursing homes?
Knowing these facts, would you ever put someone you love in a nursing home unless there was absolutely no other choice?
The problem becomes that alternative ways of providing in-home care takes money – a lot of it.
But with proper planning, we can leverage your dollars in order to provide funds to pay for the cost of home health care, thus taking the burden off your family.
When I ask clients about this topic, it always leads to an interesting discussion.
I hope this blog inspires you to review your plans for later in life, and influences you to lean toward care at home rather than to depend on care in a nursing home.
I have been doing that with my clients for years because I believe that going into a nursing home is not the ideal or optimal situation.
If these topics are on your mind, whether it’s for you, or for your aging parents, please reach out to me at 248-499-9676 or email: ronald.sneller@snellerfinancial.com
Thank you for taking the time to read this blog, and I wish you the very best on your journey to health, happiness, and financial prosperity as well.
Articles:
Title: A Second Crisis Looms for Nursing Homes (Quartz, Feb 25th, 2021) https://qz.com/1975649/nursing-homes-face-a-financial-crisis-and-the-threat-of-closures/#:~:text=A%20recent%20industry%20survey%20found,to%20close%20within%20a%20year
Title: Maggots, Rape, and Yet Five Stars: How U.S. Ratings of Nursing Homes Mislead the Public (New York Times, March 13th, 2021) https://www.nytimes.com/2021/03/13/business/nursing-homes-ratings-medicare-covid.html
Title: California Sues Nursing Home Chain, Saying It Manipulates Rating System (New York Times, March 15th, 2021) https://www.nytimes.com/2021/03/15/business/california-lawsuit-brookdale-senior-living-nursing-homes.html
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