Penn and Teller and the Disappearing SNF

When I got married to my wife and business partner (the partner came after), part of our honeymoon was spent in Las Vegas. While there, we caught Penn and Teller’s Vegas show and it was AWESOME! I love magic and in particular, the kind that is up close and personal. The trade term now seems to be “illusion” versus trick but in terms of the title of this post, there is no trick and no illusion.

On Tuesday, the American Health Care Association released a report which is an amalgamation of data gained from a survey of over 450 nursing homes. From that survey, two-thirds are concerned that present day staffing shortages will necessitate the facility, without improvements or regulatory relief in some fashion, to close. More than 70% of surveyed facilities reported staffing levels below pre-COVID-19 pandemic levels, with 99% saying they are hiring for open positions. The one percent must be an anomaly of some sort as I don’t know a facility that isn’t hiring nursing staff. The report is available here: AHCA State of the Sector 2024

According the AHCA report, more than half of the facilities surveyed indicated that their staffing challenges have stayed the same or gotten worse in the past six months. Nursing homes have tried a slew of tactics to increase hiring, such as increasing wages (90%), signing bonuses (78%) and paying for education (69%). Even in spite of these tactics, 65% of facilities report that it takes between one to six months to fill a position, while 15% say even 6 months is not enough.  Of course, this isn’t net of turnover which means, gains in overall staffing levels are not typically occurring.

The ramifications of short staffing are many.  First, accepting admissions is a challenge – 46% of the AHCA survey participants have refused admissions.  Admission referrals cause hospital back-ups and patients to seek care, often at less optimal facilities or at facilities at a greater distance from loved ones. In rural or exurban environments, this distance can be hours of travel time. Second, non-optimal staffing numbers put existing residents at-risk of reduced care or services. Even staffing at rack minimums can beget problems for residents when existing staff call-in (or call-off) and no readily available replacement exists.  Third, a short staffing status creates turnover begetting more staffing challenges.  The problem becomes cyclical.

In September 2023, the Biden Administration proposed a federal staffing minimum (mandate0 for nursing homes. Based on the proposed rule’s minimum requirements of the 2.45 nurse aide hours per resident day (PRD), the 0.55 RN PRD, and the 24/7 RN requirement, 96% of facilities in the AHCA survey are concerned about meeting the requirement (80% are very concerned).  For more on the Biden Administration staffing mandate (not yet issued in a final rule), see two posts on this topic from last year.

1. https://rhislop3.com/2023/08/30/wednesday-feature-cms-snf-staffing-mandate-stalled-the-abt-report-on-feasibility/
2. https://rhislop3.com/2023/09/01/cms-releases-rule-on-snf-staffing-mandate/

With the staffing mandate rule still looming and uncertainty over how the final rule will read, when asked, the facilities in the survey responded about their concerns, in rank order, 

1. Finding staff to meet the requirement.
2. Having to rely more on costly agency staff to fill shifts.
3. Not receiving corresponding federal resources to recruit/retain staff.
4. Having to limit the number of residents we serve or closing altogether.
5. Staffing minimums/ratios do not encourage innovative staffing models or address retention challenges.

Per AHCA, and I know the same relationship exists with Leading Age members, forty-five percent of facilities are operating at a loss and another forty-two percent have a tiny margin, between one and three percent. This means fully eighty-seven percent of facilities are financially strapped to the point of not being able to invest additional resources in plant, property, equipment or staff.

So, for the illusion and Penn and Teller reference. Staffing mandates don’t make more staff appear and don’t improve care.  We know this.  One cannot mandate something when the requirement of the mandate (staff) is in short supply. Resource limitations, especially under Medicaid (the largest payer for nursing home care), have lagged cost realities for decades.  Per data we know, margins are not such that facilities are raking in profits, just the opposite.  If the status quo doesn’t change, facilities will disappear, right in front of our eyes.

For regular readers and followers, my solution framework (for this issue) is below, and I know, repetitive. 

1. Ditch staffing mandates of any kind.  They don’t work. Flexibility and creativity are what is needed.
2. Improve supply by state, federal and private cooperation to increase nursing school enrollments – dollars to add programs, dollars to add instructors, and dollars to make education costs affordable or minimal.
3. Reimbursement, especially Medicaid, must improve and cover far more costs than current.
4. Regulatory reform is sorely needed. Too much paperwork, too many onerous, non-sensical survey elements, abusive surveyors, and process requirements that have nothing to do with patient/resident demand reform.
5. State and federal government agencies need to evangelize the role of nurses and nursing personnel in our society.  Messaging needs to be positive, and it needs to be a national message that parallels former public service campaigns on service (military, teaching, first responders, etc.).