We have all seen the stories about skilled nursing facilities closing, entering bankruptcy, or being sold to out-of-state for-profit corporations. Have you wondered why this is happening?
Did you suppose that this is because of poor management? Or maybe because Grandma and Grandpa are staying in their homes longer, and are not moving to nursing homes? Or even that there are too many such facilities in our state and the market is driving the smaller ones to close?
I contend that, although some of these things may be true, the fact is that we don’t care enough about the “Greatest Generation” to allow them to live out their golden years with dignity and comfort.
Let me list some of the reasons supporting my contention.
At the not-for-profit nursing home in East Providence where I serve on the board of trustees, 70 percent of the residents receive Medicaid benefits. Since 2014, Medicaid benefits have increased from $197 per day to $262 per day, a 33 percent increase. Over the same period, operating expenses have gone from $251 per day to $411 per day, a 64 percent increase. And the percentage of Medicaid recipients among our residents has steadily increased over the years. This has led to our overall revenue increasing only 3 percent from 2014 to 2022.
Bottom line: Averaging all the payers comes to an average reimbursement rate of $287 per day with a cost of $411 per day. That’s a $124 per day shortfall, per resident.
We are inundated with ads for Medicare replacement plans, especially during open enrollment periods. It sounds like a great deal for Medicare recipients, and it is. There are additional benefits with these plans that are not part of traditional Medicare. But our view of these plans is a little different. The largest such plan in Rhode Island has not increased its reimbursement rates at all in the past nine years.
We have been the recipient of several COVID-related federal programs that have enabled us to stay in business for the past several years. However, these programs have ended.
Rhode Island has instituted a minimum standard of hours of care per day, per resident. This is a necessary program to ensure proper care for our elderly. The legislature has allocated that 80 percent of our Medicaid increase go directly to staff, intended to offset the staffing mandate. In reality, we have needed it to boost starting rates in order to be competitive. We have seen an exodus of caregivers over the past few years, with no corresponding increase of entry level workers to take their place. Complying with minimum care standards requires that we employ agency nurses and assistants. These agencies have just recently been constrained to charging just double what the average wage earner receives.
What needs to be done to provide adequate care for our seniors? Should we lower the minimum standard of care? Of course not. Should we implement another emergency funding program? That is only a temporary fix. The answer lies with our governor and legislature. Medicaid reimbursement rates must be increased. The last time that there was an updated Principles of Reimbursement Report was in 2013, and the data used was from 2011 and 2012. There is another scheduled for Fall 2024. We may not last that long.
Michael Cole has served on the board of trustees of Aldersbridge Communities since 2008 and is currently vice president of the board.