87 percent of R.I. nursing homes are in danger of closing, report says

According to a report commissioned by American Health Care Association, 95 percent of Rhode Island’s nursing homes were losing money, and 87 percent were at “financial risk,” with operating losses at 7.5 percent or more

A report commissioned by the American Health Care Association says 87 percent of nursing homes in Rhode Island at a financial risk.Handout

PROVIDENCE — Rhode Island is the state with the highest proportion of nursing homes in danger of closing, a national group reported Wednesday.

The report says 95 percent of Rhode Island’s nursing homes were losing money, and 87 percent were at “financial risk,” meaning they were at high risk of closure with operating losses at 7.5 percent or more. Nationally, 47 percent of nursing homes were at “financial risk,” according to the report.

The American Health Care Association commissioned the report, which was done by Clifton Larson Allen LLC, a national accounting firm. The report used Medicare data through September 2021 to gauge the financial health of US nursing homes.

“Rhode Island nursing homes have been hit by the perfect storm,” said John E. Gage, president and CEO of the Rhode Island Health Care Association.

He attributed the problems to a combination of “chronic underfunding” by Rhode Island Medicaid, a “historic workforce shortage” with more than 21 percent of nursing home workers lost in the past two years, and “rampant inflation” that’s driving up the cost of running nursing homes.

Those factors have “created an existential threat to the future viability of Rhode Island nursing homes,” Gage said.

According to the report, the proportion of Rhode Island nursing homes considered “at financial risk” shot up from 19 percent in 2019 to 87 percent now.

Since the pandemic began, five Rhode nursing homes have closed, displacing hundreds of older residents, Gage said. Those five closed facilities are Woodpecker Hill Health Center in Coventry, Apple Rehab Watch Hill in Westerly, Hallworth House in Providence, Ballou Home for the Aged in Woonsocket, and Elderwood at Riverside, he said.

With those closures, the state now has 79 nursing homes, he said.

Those closures come as the population of Rhode Islanders age 85 and older is expected to double in the next two decades, Gage said. The association predicts that there will not be enough nursing home beds in Rhode Island to serve those in need by 2027.

“It’s a freight train that is coming our way,” Gage said.

Rhode Island nursing homes have lost 2,096 staff members since 2019, marking a 21 percent reduction in the entire state’s nursing home workforce, according to the federal Bureau of Labor Statistics.

“Unfortunately, these disturbing statistics do not include the costs associated with the 2021 passage of the state’s new minimum staffing law,” Gage said. “This law is simply impossible to implement, especially at a time with the demonstrated lack of available workers. This will only exacerbate the crisis we now face.”

After the pandemic exposed the stark realities of short-staffing at nursing homes, the General Assembly passed legislation that set minimum staffing standards and quality care for the first time.

The Nursing Home Staffing and Quality Care Act mandated that residents will be guaranteed a basic standard of care. The legislation established a minimum standard of 3.58 hours of resident care per day by Jan. 1 and 3.81 hours by Jan. 1, 2023.

In January, Governor Daniel J. McKee signed an executive order that allowed nursing homes to operate under the state’s minimum staffing requirements without being penalized through the end of March.

House Deputy Speaker Charlene M. Lima, a Cranston Democrat, has proposed a bill that would delay penalties until after June 30, and she has introduced a bill that would exempt nursing homes from the minimum staffing requirement under certain circumstances.

Patrick J. Quinn, executive vice president of Service Employees International Union District 1199 New England, responded to the report on Thursday, saying, “This ‘study’ was paid for by (Rhode Island Health Care Association) and their national partners to get the results they desired.”

“The number of empty beds is quite high primarily because people lack faith in the product they are putting out there,” Quinn said. “Family members don’t want to put their loved ones in a nursing home only to be told you can’t visit them due to COVID restrictions and don’t believe that their loved ones are getting proper care.”

While the numbers of nursing home residents has rebounded, they’re not back to pre-pandemic levels, and that hurts profitability, he said.

“Many homes have failed to change their business model,” Quinn said. “Out of state nursing home operators continue to buy homes here in Rhode Island. Why are they doing that if they aren’t profitable?”

While many view the nursing home industry as a care business, it’s actually a real estate business, he said. “And if they think they can’t make as much money as they were making in the past because they have to pay higher wages, they may take their capital elsewhere.”

Nursing homes are having a tough time recruiting and retaining staff because there’s a shortage of healthcare workers after years of employees being “undervalued and underpaid,” Quinn said. “During the pandemic this was evident. There was little care for the workers, despite the nursing homes getting additional money – more than $50 million.”

The General Assembly authorized additional money, effective October 2021, but the last portion of it has not been paid out because the Centers for Medicare & Medicaid Services is holding it “due to a technicality,” he said, “and no one in the administration has paid attention to it.”