Market And Political Pressures Grow On Skilled Nursing Facilities

The covid-19 pandemic drove a collapse in each affected person quantity and income for post-acute care in expert nursing services (SNFs). And whereas affected person numbers have elevated modestly for the reason that worst of the pandemic, they continue to be far beneath 2019 and possibly are financially unsustainable for the SNFs.

On the similar time, bipartisan federal laws within the Home and Senate would create new incentives for post-acute sufferers to obtain rehabilitation and different post-hospital care at house relatively than in a SNF. The invoice, referred to as the Choose Home Act, would create an extra Medicare profit for as much as 30 days of in-home well being companies. It might enable Medicare funds for companies reminiscent of telehealth, transportation, and private and respite care. 

Plunging Medicare spending

In accordance with a new study by College of Pennsylvania researchers Rachel Werner and Eric Bresssman, the pandemic accelerated what was already a shift of those rehab-like companies from SNFs to home-based well being care.  

The research, revealed within the Journal of Submit-Acute and Lengthy-Time period Care Drugs (JAMDA), discovered that Medicare spending for post-acute care plunged from $42 million a month in 2019 to $19 million by October 2020. Expert nursing services accounted for about 31 % of post-acute spending in late 2020, down from 39 % in 2019.  

Submit-acute care typically follows hospitalization for an acute medical episode reminiscent of a stroke, or for surgical procedure—usually to restore or substitute a hip or knee. Historically, sufferers had been transferred to SNFs for rehabilitation, reminiscent of occupational or bodily remedy. Most of those services function two companies beneath the identical roof—post-acute companies largely paid by Medicare and long-stay care typically funded by Medicaid. The Medicare funds are essential to nursing houses as a result of they offset low Medicaid funds for long-term care.

Accelerating the decline

These post-hospital transfers had been declining even earlier than the pandemic. One purpose was that sufferers and households selected rehab at house. One other resulted from selections by Medicare Benefit (MA) managed care plans that discovered at-home rehab extra satisfying for its members and less expensive.

However these declines accelerated throughout the pandemic. Partially, it was as a result of for months hospitals had been barred from performing elective surgical procedures, reminiscent of most of these knee and hip circumstances. Nevertheless, even when these circumstances resumed, transfers to SNFs largely didn’t. As a substitute, sufferers gravitated to house well being care and, to a lesser extent, inpatient rehab in hospitals.

Sluggish restoration

A separate survey by the National Investment Center for Seniors Housing and Care exhibits that by this previous September, SNF occupancy (together with each rehab and long-stay residents) rebounded from its backside in January, 2021. However at about 75 %, it nonetheless was far beneath its pre-pandemic degree of just about 86 %. Business analysts typically imagine that occupancy should exceed 80 % for services to be worthwhile.

SNF occupancy is recovering fitfully partially as a consequence of lack of employees. The business commerce group The American Well being Care Affiliation says nursing houses misplaced greater than 200,000 employees throughout the pandemic. A separate study by the analysis and advocacy group PHI and the College of California, San Francisco discovered the same drain and no proof that employees are keen to return to troublesome low-paying jobs in long-term care. The outcome: Facilities are turning away patients, or even closing as a result of they don’t have sufficient employees to fulfill regulatory necessities.  

And it isn’t only a lack of sufferers. SNFs are being paid much less for individuals who are there. Structural modifications in Medicare, by far the most important payer of post-acute companies, are hitting SNFs—exhausting.

The NIC report exhibits how the fast development of Medicare managed care is squeezing SNF margins. About 40 % of Medicare beneficiaries are enrolled in MA plans. And whereas most are comparatively younger and wholesome, a rising share of MA members want rehab companies.

The MA squeeze

And the distinction in fee charges between MA and conventional fee-for-service Medicare is stark and rising. On the finish of August, conventional Medicare was paying a mean of $562-per-day for a post-acute affected person whereas MA paid solely $445. That hole grew by roughly 20 % simply throughout the pandemic.  General, August 2021 Medicare managed care revenues fell by greater than 4 % per affected person, per day—or nearly $20—in comparison with the prior yr. This at a time when prices for labor and private protecting tools had been rising quickly.

This pattern raises three essential questions: How a lot of the shift away from SNFs for profitable post-acute care is everlasting? Whether it is, what’s going to turn out to be of nursing services as we all know them? And the way will the US modify to rising home-based care, a lot of it supplied by unskilled and overburdened members of the family and buddies?

Because it has in so many different methods, the nursing house story exhibits how the Covid-19 pandemic uncovered deep flaws in our system of look after older adults. Now, we have to work out what to do about it.