Unfinished Business

What's Next: Nursing Home Deserts?

My college friend, Gary, and other members of his senior citizen age cohort enjoy meeting for supper in Lime Springs. Increasingly, when they pull up a chair to chat, their conversation returns to a shared future concern.

Country Winds Manor, in nearby Cresco (population 3,888), shut its doors on January 6. The closing of the 24 -bed facility, also known as the Patty Elwood Center and Donald Lundak Assisted Living Center, followed closely on the heels of the November shuttering of the Good Samaritan Nursing Home in Postville, (population 2,500). Thirty-nine residents called it home.

"My friends and I have been talking about this problem," Gary told me last fall. "It doesn't seem that long ago that we were concerned about finding nursing homes for our parents. Now it's us. Where are we going to go when we can't stay in our own homes any longer?"

Nineteen nursing homes have closed across Iowa in the past year, according to the Iowa Healthcare Association. The trend seems to be accelerating in 2023. Last month, Blue Care QHC Management notified state regulators that it "could not afford to operate" six nursing homes and assisted living facilities in Iowa, impacting 260 people in Humboldt, Ft. Dodge, Winterset, and Maquoketa.

Nursing homes are required to stay open 60 days to place residents elsewhere. Assisted living facilities must remain open for 90 days. According to Brent Willett, Iowa Health Care Association president and CEO, residents will be relocated, but the question is the distance from their families. Residents with dementia, or other conditions requiring extra care, are more difficult to place

.

"We've come to expect in Iowa, as we age and need more care, we can go to a facility close to home," Willett says. "That's starting to change. Access to care is shrinking in rural areas."

It's hitting rural communities hard. All but three of the Iowa closures in the past year have been rural facilities, according to the Iowa Health Care Association.

Myriad challenges ahead

Some of the closures can be attributed to the aftershocks of Covid-19. American Rescue Plan funds in 2020 and 2021 helped to ward off the closure of Country Winds, and other nursing homes across the country. But the pandemic exacerbated staff shortages and high turnover. Some homes had to hire more expensive agency staffing (travel nurses and CNAs) to fill positions, on top of the costs of Covid-related disposable masks, gowns, and gloves.

Today, many homes are operating under capacity because they don't have adequate licensed nurses or staff to accept more residents. Some patients are stranded in hospitals while social workers scramble to find open nursing home beds. A December 2022 Iowa Health Care Association survey revealed that 74% of homes were limiting or freezing admissions as a result of staffing challenges.

Country Winds' special niche was secure dementia care, including 12 dementia-specific assisted living apartments. Despite administrative turnover, it had been fully occupied and even had a waiting list (except for its apartments). A total of 48 employees lost their jobs.

The Postville Good Samaritan home was one of 10 closed in the past year by the Evangelical Lutheran Good Samaritan Society, a South Dakota chain affiliated with the much larger Sanford Health network. Another one of its homes in Fontanelle closed as well.

As Covid, and related supply chain issues began to abate in 2021, inflationary pressures, including food costs, delivered a one-two punch.

"Nursing homes can't curtail their hours, or raise prices, since they're controlled by federal and state regulations," Willet says. "They don't have those tools at their disposal."

Higher costs of doing business have intersected with another simmering issue: lagging Medicaid reimbursement rates. Medicaid picks up the tab for 52% of the costs of residents receiving care in Iowa. Its reimbursement rates are below the amount paid by private pay nursing home residents.

States invest individually in their Medicaid programs, and the federal government provides roughly matching funds. Since the last rate increase in 2021, Medicaid hasn't kept up with the adverse economic environment for Iowa nursing homes, making it difficult to raise employee wages. Gov. Reynolds has recommended increasing Medicaid daily rates by $15 million.

"We face an historic shortfall in Medicaid reimbursement rates of nearly 20%," Willett says. "For every $1 spent in care for a Medicaid resident, providers receive only 80¢. It's crucial that state legislators recognize these extra costs and re-set this rate."

Medicare doesn't pay for long-term care. It reimburses for short-term skilled nursing home care, in specific situations beginning with an inpatient hospitalization and requiring on-going care that cannot be provided at home. My mother-in-law benefitted briefly from skilled care after hospital stays. Medicare is one of the few profitable areas for nursing homes, with a reimbursement rate of $525 per day. However, Managed Medicare (Medicare Advantage) plans pay less per day on average of $75 per fday than traditional fee-for-service Medicare. As Medicare Advantage plans become more common, margins are squeezed even more.

"Medicare typically has been a backstop against historically underfunded Medicaid," Willett says. In a move that may make things worse, the Centers for Medicare & Medicaid Services plans to decrease its pay for skilled nursing facilities by $320 million in fiscal 2023.

Competing for workers

Over 20,000 Iowans live in nursing homes; 10,000 others reside in assisted living facilities. But there's also recent state initiatives to keep seniors at home, with home health care and public services. A total of 80% of these services are reimbursed by Medicaid, and face similar worker recruitment challenges.

Furthermore, home health care options are limited in small, rural communities. We priced home health for my mother-in-law on her farm a few years ago, but it wasn't affordable. Unfortunately, many elderly individuals are too sick or fragile to stay home, even if they could obtain affordable home care.

Some mid-sized towns, like Boone, (population 12,469) have newer senior apartments for individuals able to live independently. These are private pay only.

Recruiting people into the long-term care workforce is one of the largest hurdles. Many nursing home workers are single women, with young children who need childcare. That requires homes to pay competitive wages so these mothers can afford childcare. Nationally, Willett says employment levels at nursing homes dropped 13%, beginning with the pandemic. Although hospitals have largely recovered their workers, nursing homes have not. This is compounded by the fact that there are fewer working age adults in rural areas.

One in four people in the U.S. will be over 65 or older by 2050. Nursing homes are anticipating a baby boomer wave of admissions. "Demand for long-term care is predicted to increase by 20% over the next six to seven years," Willett says. "We don't have the workforce to adequately meet this increase."

When nursing homes close, and their residents are dispersed, it imposes severe hardships on families. Elderly spouses often cannot make the drive. In 1975, when my 98-year-old Grandma fell and broke her hip while making a pie at the kitchen counter, my mom arranged a patchwork system of part-time help to care for her on her farm. After Mom had a heart attack, Grandma had no other choice than to move to a nursing home 5 miles away. It provided her with a sense of home to see the familiar face of a relative who worked there.

My mother-in-law spent her last two years of life 9 miles away--it was a quick trip for my husband and I or his sister to check on her in person. Our 4-H club visited there monthly. We played Bingo, sang Christmas songs, made s'mores, and brought our dogs and kittens. Then came Covid, and although we organized parades of farm animals outside the windows in the summer, the personal contacts with residents remain limited.

Dark clouds on the horizon

Iowa isn't alone as it faces the prospect of nursing home deserts--it's a national problem, especially in rural states such as South Dakota, Colorado, Nebraska, Wisconsin, Oklahoma, Arkansas, and Montana. From 2015 to 2019, about 14% of Montana's nursing homes closed; 11% of Nebraska's closed over the same period. More than 440 rural nursing homes have closed or merged over the past 10 years, according to the Cowles Research Group, an independent group tracking long-term care.

As nursing homes grapple with these unprecedented challenges, a bipartisan group of senators sent a letter in late January to Centers for Medicare & Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure, expressing concern about the additional burden of a federal minimum staffing mandate, especially on rural facilities. The senators discouraged CMS from taking a “one-size-fits-all” approach, urging them to work together on solutions to address staffing shortages. 

"Issuing a mandate this spring would require more than 2,100 additional direct care staff in Iowa nursing homes," Willett says. "These people don't exist. We're hopeful practical minds will prevail."

Demographics will continue to dominate. The rural population is older, sicker and poorer, and there's a higher percentage of people with multiple chronic issues and co-morbidities. Many of their adult children have moved from their rural hometowns to better economic opportunities in more distant cities.

Willett says that additional Iowa nursing homes are in receivership, under court or state-appointed temporary management. Additional QHC Health Care facilities are operating in emergency receiverships.

The crisis in nursing homes is one subset of a much broader issue of access to affordable rural health care. Iowa faces many serious issues, but surely providing care for vulnerable seniors is one issue that members of the Iowa legislature can agree upon, as they set their state budget.

"The measure of society is how it treats the weakest member

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