Historically bad: nursing homes strained by labor shortage
It’s a tough time for long term care facilities right now. Two of them in Springfield recently announced their closure. Others across the country are not in great shape. One of the retirement homes in Springfield is owned by Heritage Enterprises, based in Bloomington.
Ben Hart, President and CEO of Heritage, said times were historically bad. âI have been in this business for 25 years. And I have to say that I have never seen a more difficult time. And even, you know, discussing this with my dad, who is the founder of Heritage, it goes back 58 years. And he should be okay with that, âHart said.
There are several reasons for the crisis. The supply of labor is a cause which has an aggravating effect. There is a nationwide shortage in many sectors, particularly of women not re-entering the workforce due to prohibitive child care costs. Historically, women have also dominated the nursing field and skilled health care positions.
âI will say it’s worse for health care,â Hart said. âPeople are choosing to leave health care altogether. They have opportunities (in) other industries. And certainly, the stress of what’s happening with the COVID pandemic plays a big part in it. “
Heritage lacks 300 to 500 staff out of a workforce of around 4,000, Hart said, with most of the vacancies being vacant in clinical positions – the practical caregivers of residents and patients. These are registered nurses and nursing assistants. And the nation entered the pandemic with a nursing shortage that only got worse.
The problem is not just the salary. Hospitals are full right now, Hart said, which has increased the demand for nurses and nursing assistants. This in turn has led to the rise of new problems that threaten the cost structure of long-term care facilities.
âThe biggest one is what we call nursing agencies, or you could call them interim agencies in the hospital world, they would call them traveling nurses,â Hart said.
If a nursing home can’t fill a shift, it calls an agency to fill it with a licensed temporary worker. This entails an additional cost.
âWe are subject to the laws and regulations of the State of Illinois where we must have minimum staffing standards. We can’t arbitrarily choose, âWell, I want a nurse on this shift or two nurses,â Hart said.
And the overall staff shortage means nursing homes and other skilled care facilities have increasingly relied on agencies for a growing portion of the workforce.
Raw numbers from the soon-to-close Heritage facility in Springfield showed labor costs up 41%, largely due to agency costs, Hart said. The labor expense to care for a patient for one day was $ 144 in 2020. Hart said the cumulative cost for this home was $ 203.
This retirement home is the second largest in Sangamon County. Hart said the closure and closure of another non-heritage facility in Sangamon County could force the placement of patients in more rural areas surrounding Springfield, but there is still bed capacity to absorb them.
He said Heritage is not considering closing any of its facilities in McLean County.
âOur Bloomington Normal facilities are strong, they are very healthy. And they are really needed. We are an important part of the local health care community, âHart said.
Yet the trend in agency staffing is national.
âAnd it becomes very problematic for the suppliers. Because nursing agencies are unregulated, unlicensed, and largely unchecked by any type of government or regulatory body. They are just not held to the same standards that health care providers must meet, âHart said.
He said that other than making sure they have a valid license, long-term care facilities cannot monitor or train agency hires. The demand curve also puts long-term care facilities at a disadvantage in another way.
âThe rise of agencies has become almost predatory. We find them camped outside our buildings and they recruit our staff the moment they leave their shift. They promise them they can work for higher wages, âHart said.
He said he doesn’t blame workers for wanting to ask for a raise, but he said it creates an additional layer of expense in the health care system which is passed on to insurance companies and patients who can. pay for themselves.
Among the residents of Heritage establishments, 50 to 55% cannot afford the daily rate. They’re on Medicaid, and Hart said that further restricts providers.
âThese are fixed rate refunds for us. The payment they make to us does not increase as our expenses increase. In Springfield, our labor costs increased 41% year-over-year. Our total costs have increased 35% year over year, mainly due to salaries. And our Medicaid system payment has increased by 7%, âhe said.
Hart said it now costs Heritage $ 279 per day. Medicaid pays $ 194 for a daily loss of $ 84 per Medicaid patient per day.
Hart said health care providers owe society the ability to care for everyone equally, regardless of the ability to pay.
âBut the Medicaid system should recognize that, and they should pay providers what it costs them at least to provide this care,â Hart said. “And that’s where the state of Illinois and the Medicaid system failed.”
He said that sooner or later more providers will leave skilled nursing care if this problem is not addressed, suggesting that it must happen at both the state level and the federal level – at the state level. State in emergency pandemic aid and at the federal level, with higher reimbursement rates.
âOur state of Illinois and our General Assembly members need to wake up and understand what’s going on in long-term care before it’s too late,â Hart said, adding that to preserve the capacity system, governments should reimburse facility operators for periods of low occupancy.
For now, the low occupancy rate may be due to staff limitations. Since the start of the pandemic, the occupancy rate of skilled nursing facilities has fallen by around 10%. At first, it was because families may have kept loved ones at home rather than putting them at risk of COVID. Since the vaccine became readily available, Hart said one would think there would be a rebound. Not so.
âThere are several factors at play, the most important probably being the lack of available workers. We have a number of facilities within our system that are not accepting new admissions because we just don’t have the staff available to look after them, âHart said.
Hart said this limit is true for the majority of long-term care facilities nationwide, meaning hospitals may be fuller than they should be because they cannot place patients in facilities. skilled care, rehabilitation or long-term care.