Long-Term Care Staffing Crisis Needs Government Involvement

The nursing shortage has been a longstanding industry problem that is progressively getting worse. The recent COVID pandemic has further escalated the issue from a shortage to a crisis, and with no signs of the virus abating, the future of nursing is looking grim. 

The problem is so severe that the American Nurses Association (ANA) urges the Department of Health and Human Services to address the problem before it becomes a national catastrophe. This suggests that should the staffing shortage in long-term care continue on its current trajectory, we will soon experience dire consequences, including higher mortality rates. 

On the surface, we know the following about the staffing crisis: 

1. Facilities are dealing with COVID challenges and the higher demand for long-term care services due to the aging Baby Boomers who are becoming more reliant on assistance. 
2. There are significantly fewer people pursuing nursing. With approximately 70,000 nurses retiring annually and the number expected to reach one million by 2030, there is no end in sight to the shortage. 
3. Nursing programs are underfunded across the country, limiting the number of trainee nurses. 

But there is so much more we need to discuss: How did we get here? Why are people so disinclined to pursue a career in long-term care nursing? And most importantly, what are practical steps we can take to reverse this trend? 

The reality is that nursing in long-term care is hard work; it involves long hours but also compensation that is not in line with that of other professions with the same levels of responsibility and required skillsets. We can perhaps reduce the matter to two major problems:

Lack of Patient-to-Nurse Staffing Ratio 

Nurses are shorthanded, making their jobs (and lives) far more challenging. In turn, the level of care is diminished, and nursing homes become bad workplace environments. 

We could approach this issue from the business side, but the reality is that the problem starts at the top. It pains me to point out that there are currently no federal mandates regulating the ratio of registered nurses to residents, resulting in the former being constantly overwhelmed by caring for the latter. Patients are also significantly affected as the correlation between bedside time and better outcomes is well established.

While there are calls to introduce legislation to protect and improve resident care by setting safe staffing standards, few states have embraced the initiative on their own. One exception is California, which, in 1994, became the first state to pass a ratio law (the California RN Staffing Ratio Law) that set a legal maximum patient-to-nurse staffing ratio. In 2003, the final regulations were implemented, giving hospitals until January 1, 2004, to meet the staffing ratios. Unless more states take such measures, it will be upon the federal government to step up. 

I won’t get into the economic implications of such ratios right now, but I will say that California’s RN-to-patient ratio imposition has been shown to improve patient safety and outcomes (including death rates) when compared with other states like New Jersey and Pennsylvania that have not implemented such ratios. 

Insufficient pay 

While nursing generally does not pay as well as it should, there is a significant pay disparity between registered nurses in long-term care and those in other sectors. 

In 2020, the take-home salary for a registered nurse in long-term care was $28 per hour, while other registered nurses averaged $29.66. That is despite the fact that long-term care is perhaps second to psychiatric care in terms of difficulty.

Even worse is the situation for LPNs and CNAs, who, on average, make just $15.62 per hour, lower than what many fast food establishments offer. And jobs that pay the same or better are far less stressful and even offer benefits, like McDonald’s Tuition Assistance, which helps employees pay for college fees.

And it’s not like long-term care facilities don’t have the money to pay direct caregivers more. Rather, the issue is the unfair distribution of funding. As Bill Thomas, the founder and chairman of Minka Homes and Communities, recently explained, current long-term care contracts are drawn up between owners and operators and simply do not involve employees. 

What then happens is that those two parties take ninety-five percent of the profits and distribute only the remaining five percent among the workforce, resulting in dismal compensation. So if long-term care ever wants to attract more recruits, its leaders will have to change how the finances are distributed because the current system is effectively “shorting” the employees who are essentially the backbone of the facility. 

Proposed Solutions to the Staffing Crisis

Solutions to the staffing crisis can be found just about anywhere. But after three decades in the industry, I’ve learned one thing: the only real solution will come from the government. Nursing homes need more funding, which will only come through taxing and spending tax dollars more wisely. After that, funds can be redistributed to nurses and CNAs, thus making long-term care nursing a more appealing profession. Here I present my four solutions to the staffing crisis that, while ambitious, are the only measures left to be taken:

• Government-established staffing ratios

Currently, fifteen states have mandated patient-to-nurse staffing ratios, with a further eight states requiring hospitals to organize staffing committees responsible for planning nurse-driven ratios and staffing policies. But this matter simply can’t be left to the states. 

We need a federal mandate, and we needed it yesterday. Otherwise, there will continue to be a great disparity between the quality of care in various parts of the country, and seniors, who do not have the luxury of moving, will be stuck in facilities with 30 to 40 residents per shift. 

Furthermore, the only tool used to measure the quality of care is the CMS, Five Star Quality rating system. This star rating is based on a facility’s three most recent health inspections, staff rating information according to the number of care hours given to each resident per day, and the quality measures assessing different physical and clinical standards. 

Facilities must also submit their MDS (Minimum Data Set), based on a standardized assessment tool applicable to all registered residents stating what care is needed. The MDS measures residents’ physical, psychological, and psychosocial functioning, therefore providing RN (Registered Nurses) with a comprehensive way to monitor the quality of care given with the 5-star rating system. 

Then there is the issue of patient acuity. The government needs to specify the ratio between clinical expertise and the number of resources needed to ensure each resident’s care is appropriate based on their medical needs, ADLs, and behavior challenges. Facilities should therefore keep a record of staffing hours using a payroll-based journal that aligns with the care given and the ratio of residents to nurses. 

However, only some facilities will implement changes without a government-mandated ratio law. There are also no monetary penalties if a facility loses a star in its CMS rating, therefore giving little incentive for facilities to adopt new measures unless forced to. 

• Set standards for reimbursement

Yes, the government established a national standard (PDPM) stating the financial reimbursements to which facilities are entitled. Still, we now need an additional clause that stipulates the distribution of money and, as we clarified above, narrows the gap in compensation between owners, operators, and employees. Such law (and the higher wages that would follow) would immediately lower staff turnover and attract more recruits into the industry. 

In October of 2021, three states set requirements for the percentage of revenue to be spent on care and the amount that can be used on other expenses, like administrative or executive salaries. For New York, that number is 70 percent. For Massachusetts, it is 75 percent. And for New Jersey, it is a whopping 90 percent. 

While the details—like determining what counts as “care” or “revenue” and whether this should only apply to relevant forms of Medicaid funding—still need to be worked out, this recent development is a good sign. The next step is for the federal government to consider such standards and impose something similar on the national level. 

• “Grandma taxes”

Medicaid only covers about half to three-fourths of long-term care expenses. The remaining money comes from local and state sources. One such source is provider taxes, colloquially referred to as “grandma taxes.” 

Essentially, eight of the thirty-two states that adopted ACA Medicaid expansion call upon taxpayers to help finance long-term care and other Medicaid services. One of those states, Arkansas, actually has the second lowest GDP per capita in the U.S. 

So, it’s not necessarily about money but rather priorities. The federal government has the power to impose such taxes or, at the very least, redistribute revenue from the taxes currently in place for such purposes. 

• Faster transfers from acute to post-acute care

There is currently a delay in moving patients from acute care to post-acute care, and it is wasting valuable resources that could be used to alleviate the staffing crisis. Many long-term acute care facilities (LTACHs) offer similar services to acute care but only for patients no longer in a critical state (like wound care, those recovering from severe brain injuries, or respiratory therapy). 

Meanwhile, government funding for LTACHs is considerably lower than what a hospital would receive for the same level of care. Similar is the case of patients whose conditions improve and can be moved to post-acute care for rehabilitation. The faster these transitions take place, the more money the government will have to spend on Medicare and Medicaid.

Obstacles to the Proposed Solutions

Just find money, pay nurses better, and employ more of them. It seems pretty simple, right? Obviously, there are major obstacles to overcome for my solutions to work, primarily the ageist and capitalistic tendencies we, unfortunately, have as a nation. 

Problem #1: 

If long-term care facilities want to increase nursing salaries and offer bonuses to attract more nurses, that’ll result in either hurting profit margins or charging residents more. 

Medicaid, meanwhile, can’t be relied upon to change, as its reimbursement has been stagnant for the past decade, reinforcing what Stephen Hanse, president of the New York State Health Facilities Association, said back in July: “I think it’s clear that the issues of workforce issues and reimbursement, particularly Medicaid reimbursement, are inextricably linked.” 

And don’t think it’ll be easy to ask facilities to take smaller cuts. Their overheads are far higher than employers of similarly low-wage jobs. A skilled nursing facility will need to invest in a large amount of equipment and employ technicians to run the machinery. 

Also, in some states like Minnesota, the cost of property taxes, licenses, and other fees is exceptionally high, resulting in a surcharge and additional fees for pre-admission screening. 

Problem #2: 

These impositions will motivate owners to abandon their investments in long-term care. Unless a facility owner has a genuine passion for long-term care, they will have no qualms to invest their money elsewhere if profit margins are narrowed by way of the impositions proposed above. In fact, we’ve already seen some facilities in Texas refuse to take Medicare patients on account of low reimbursement.   

Essentially, when it comes to long-term care, there are two approaches:

Care Over Profits 

These places prioritize the welfare of their residents over keeping their investors and board happy. They evaluate the success of their Not For Profit (NFP) facilities by the quality of care provided. Such owners understand that if a facility has happy residents and content staff, it will naturally make money and, in turn, improve its profit margins. 

Indeed, research shows that NFP facilities offer higher quality care and larger profit margins than For-Profit (FP) facilities due to a more balanced business model that prioritizes the residents’ well-being and care quality over profit maximization.

Profits Over Care 

On the opposite end of the spectrum are those who view their facilities as real estate investments. This usually applies to For-Profit (FP) organizations. Instead of prioritizing the health and safety of residents, they look to squeeze every dollar out of their buildings, making budget cuts as and when they please with no concern for how it will affect the quality of life of the seniors in their care. 

If the government does, indeed, impose higher nursing wages, it will likely see a mass exodus of facility owners from the second category and those invested in healthcare real estate investment trusts (REITs). 

REITs own and manage various healthcare-related properties, like long-term care facilities, hospitals, and skilled nursing facilities. They collect rent from the facilities and effectively run them like rental properties that must earn $3,000 a month per occupant. By maxing the capacity of a 20’ 

by 20’ room, these investors feel that they are generating a comfortable monthly income similar to a wise real estate investment. 

How Much Do We Care?

While it is unfortunate that, to a certain degree, the health of our seniors depends on keeping such profit-focused people satisfied, we simply cannot risk them moving their money elsewhere and, thus, shutting down facilities that are greatly needed. This is why, for these solutions to work, we, as a nation, must do some soul-searching and a thorough self-evaluation. 

We have to ask ourselves what we can do to balance sufficient staffing and quality care with profitability. Really, though, we have to ask ourselves if we care. How much (money) are we willing to commit to give seniors the care they deserve? Are we really resisting our ageist instincts as a nation? Are we doing everything we can to advocate for more federal support for nursing homes or, perhaps, a national healthcare system? 

It is difficult to convince lawmakers or citizens that we need to invest in a demographic that is no longer working or at least not as hard in such an economy-driven society. 

If it’s too hard for us to foster compassion or empathy in ourselves, we can, at the very least, be practical and forward-thinking; we may not be motivated to invest in the nation’s current elder population, but we should be able to recognize that, in just a few short decades, many of us will need long-term care. And all indications are that if we don’t fix the staffing crisis, the youth and middle-aged of today will one day find themselves with nothing but unappealing options or, perhaps, no options at all.