Opinion Column

The Death of Nursing Homes

Elders often tell their adult kids to shoot them rather than send them off to the nursing home. We may not be disposing of our parents, but we are killing the nursing homes, at least as we know them. In not too many years, long-term care nursing home beds may be as rare as Republicans in Massachusetts.

Many may cheer at this news. But the need for the intensive level of care provided by skilled nursing facilities isn’t going away. As hospitals discharge patients “quicker and sicker,” many need a level of assistance they cannot receive at home. As medical technology keeps people with horrific injuries and severe illness alive for years, they will need careful monitoring and drug treatments that are beyond the abilities of most family caregivers or part-time paid aides. So where will they get this care?

The trend away from nursing homes is already clear. The number of facilities has fallen by nearly 1,000 to about 15,700 since 2000. More than 80,000 beds have been shuttered over those nine years. And the number of Medicaid-only beds-those certified for long-term care stays– has plunged by half since 1995, to about 114,000.

All this is happening even as the population of those 75 and older-those most likely to need long-term services-has grown from 16.6 million to almost 19 million.

Why the change? In part, it is because Medicaid is gradually providing more long-term care at home, although the pace of change remains slow.

Another reason is simple economics. Medicaid payments to nursing homes are very low-averaging only about $125 a day, although they vary widely from state to state. And facility operators say they lose money on every Medicaid resident. Some non-profits manage by tapping endowments or gifts. But for-profits, especially those being run by private equity firms or other investors, won’t continue this business model for long.

Those who pay out of their own pockets are charged much more–an average of over $200-a-day-but they represent just a small fraction of nursing home residents.

While Medicaid underpays for long-term care patients, Medicare pays much more generously for rehabilitation after a hospital stay. Rates vary widely, but facilities can easily get $400 or $500 per day for such care.

While nursing home long-term care is being squeezed, seniors and their families are turning to alternatives such as assisted living. Two decades ago, there were just a few thousand of these facilities. Now there are more than 20,000, with more than 1 million beds. In Minnesota, for instance, the number of nursing home beds has dropped from more than 50,000 to 35,000 in just a few years. But most of those would have been in skilled nursing are now in assisted living, not their old homes.

Many facilities are operated by the same firms that run-or used to run-stand-alone nursing homes. The new mantra in the industry is continuum of care: home health, independent living, assisted care and skilled nursing.

The shift to assisted living is, on the whole, a good thing. These facilities can provide good care in a more comfortable setting at roughly half the cost of skilled nursing. Yet this shift is not without problems. Just as nursing homes residents are sicker than ever, so too are assisted living residents. According to one industry survey, more than a third suffer from dementia, and the typical resident takes an average of nine medications a day.

Although residents look increasingly like the nursing home patients of a few years ago, regulation of these facilities has changed slowly and varies widely from state to state. There is not even a common definition of assisted living, which can range from large corporate-owned residential complexes to small board-and-care homes that house one or two elderly lodgers.

Some states require facilities to meet complex licensing requirements, others are far more lax. Some require extensive dementia care training, others none at all. While the federal government closely monitors nursing homes, supervision of assisted living facilities is largely left to the states. While this lack of intense regulation gives facilities flexibility to provide more home-like care, it also poses obvious health, safety and financial risks to patients-especially those who need complex care.

Senior living facilities have been battered by the recession. With the average nursing home more than three decades old, expect a wave of both consolidation and new construction when the economy eventually turns around. But that will mean even fewer long-term care beds. And as the role of nursing homes shrinks, we’ll all need to pay far more attention to the alternatives.

Howard Gleckman, a senior research associate at the Urban Institute, is author of “Caring For Our Parents” and a frequent writer and speaker on long-term care issues.