DATE : November 25, 2019
Michael P. Norton, State House News Service
STATE HOUSE, BOSTON, NOV. 25, 2019.....Even amidst a wave of closures, usage rates at nursing homes in Massachusetts that are still open are declining and operating margins are plunging, according to a new report.
Nursing homes served an average of more than 39,000 people per day in 2017 at a total cost of $4 billion, but the industry is in flux at a time when the size of the state's older population is growing. In response to what some have called a crisis, state officials have convened a task force to recommend near-term remedies.
As usage fell 5.4 percent in Massachusetts between 2013 and 2017, median operating margins at nursing facilities declined from negative 0.8 percent to negative 3.9 percent between 2013 and 2017, according to the Center for Health Information and Analysis report released on Friday afternoon. More than two thirds of nursing homes in Massachusetts are owned by for-profit companies, the report said, with the remainder operating as non-profits.
"In the Massachusetts nursing facility industry, it is common for facilities to change ownership," the report said. "However, some facilities do close permanently, and this trend has increased in recent years. In 2017, there were three permanent closures, 18 in 2018, and 11 announced for 2019 as of this report's publication."
Despite the closures, occupancy rates have still declined at the nursing homes that have remained open.
In a separate report, state officials concluded that one in six nursing homes in Massachusetts in April operated with occupancy under 80 percent, stipulating that "facilities with low occupancy rates are not sustainable." The report said "many" nursing homes on Cape Cod in particular face fiscal pressures.
The October report from the Executive Office of Health and Human Services said MassHealth, a major payer of nursing home expenses, had successfully rebalanced long-term care spending toward home and community-based services, by increasing state spending on such services by $900 million between fiscal 2015 and fiscal 2017.
According to the CHIA report, revenues taken in by nursing homes per day for each resident increased across the three largest payer categories: Medicare (+10.1 percent), Medicaid (+5.5 percent), and self-pay (+7.4 percent). However, aggregate nursing home revenue from all payer types declined over the five-year period studied, led by an 11.4 percent decline in nursing home Medicare revenues.
In 2017, 32.2 percent of nursing home resident days were at facilities rated as below or much below average, the report said, with 67.8 percent of resident days at facilities rated as average or above average quality.
Across the industry, Massachusetts nursing facilities reported staffing levels of 3.95 nursing hours per resident day, below the 4.1 hours per resident day recommended by a 2001 federal government study. The report said federal nursing home staffing requirements have not changed since 1987.
"Nursing facilities provide essential care to some of Massachusetts' most vulnerable citizens," Ray Campbell, executive director of CHIA, said in a statement accompanying his agency's report. "By examining trends of multiple performance indicators, this report allows policymakers, stakeholders and residents a deeper understanding of the nursing facility industry in the Commonwealth."
A state task force is examining the industry, ways to stabilize it so that it can help address the growing number of older state residents, and competition for services from assisted living and home care providers.
According to the CHIA report, more than half of the state's 1.1 million residents over 65 years old are projected to need some form of long-term care during their lives, with an estimated 14 percent having needs that extend beyond five years. Care settings include people's homes, rehabilitation facilities, assisted living centers, adult day health centers and nursing homes.
Nationally, the average length of stay for nursing home residents is 485 days, with residents falling into two groups - short-stay residents who are rehabilitating following in-patient hospitalization or long-term residents who need ongoing help with basic activities of daily living.