‘Unsustainable’: Nursing Home Industry Needs Overhaul, National Academies Say

The nursing home industry needs radically different funding, staffing and oversight, according to The National Academies.

The National Academies, a private, nonprofit organization, examined the nursing home industry, which has been the target of increased scrutiny during the COVID-19 pandemic. President Joe Biden says he wants to raise the quality of nursing homes and has called for minimum staffing levels.

In a 604-page report released in early April, the National Academies concludes “the way in which the United States finances, delivers, and regulates care in nursing home settings is ineffective, inefficient, fragmented,and unsustainable.”

The report states “immediate action to initiate fundamental change is necessary.”

The COVID-19 pandemic revealed the systemic problems facing nursing homes, the report noted. Through February 2022, more than 149,000 nursing home residents died due to COVID-19, along with more than 2,200 staff members.

Put another way, nursing home residents accounted for about 1 in 5 (19%) of the nation’s COVID-19 fatalities, even though residents of those facilities represent less than one-half of 1% of the U.S. population.

The National Academies report makes it clear that any substantial effort to improve the nursing home industry is going to require more money at the federal and state levels. However, the report said it’s not simply a matter of spending more money.

The industry needs more transparency, and federal and state agencies need more resources to exercise more oversight of nursing homes that are struggling, the report stated.

Katie Smith Sloan, president and CEO of LeadingAge, which represents nonprofit long-term care facilities, called the report “a piercing wake-up call for policymakers.”

The organization said the report is the first comprehensive study of the nursing home industry in 35 years.

“Decades of underfunding have left America’s nursing home system in desperate need of an overhaul,” she said in a statement. “As our nation grows rapidly older, millions of older Americans will need safe, high-quality care. It’s time to act to ensure they can access and afford the vital care nursing homes provide.”

Improving staffing

Nursing homes have struggled to recruit and retain employees. Advocates for long-term care facilities say this has been a problem for years, but the COVID-19 pandemic has only worsened staffing shortages that have plagued nursing homes.

Many nursing homes offer low pay and limited benefits, and they don’t offer enough training, the report stated. As a result, the industry isn’t attractive for employees. Registered nurses in long-term care facilities make, on average, $10,000 less than RNs in acute-care hospitals, the report noted.

The report calls for better staffing at all facilities, including registered nurse coverage around the clock, with additional RN coverage as needed; a full-time social worker; and an infection prevention and control specialist.

Moreover, the National Academies recommends research on minimum and optimal staffing standards at nursing homes, including weekends and holidays. The research should also be the basis of regulatory requirements.

Nursing home administrators should have minimum education requirements, and there needs to be continuing education for all nursing home staff, the report said.

Revamping facilities

Nursing homes also need more support for renovating their facilities, the report stated. Many facilities are aging and in need of repair.

The National Academies call for the construction and renovation of facilities to offer “smaller, more home-like environments,” along with smaller units in larger nursing homes.

New designs should include private bedrooms and bathrooms, along with the flexibility to accommodate changes in resident care and rehabilitation needs.

The report also stresses the need for incorporating health information in all nursing homes, which can improve quality and reduce disparities.

Changing funding

The insufficient investment in nursing homes, from all government levels, have contributed to the industry’s problems, the National Academies report stated.

While recognizing it will be difficult politically, the National Academies asked the Department of Health and Human Services to study the creation of a new long-term benefit to expand access to services and reduce disparities between facilities, the report stated.

The federal-state Medicaid program finances care at long-term facilities, but it can be limited by state budgets, the report noted.

The nursing home industry needs more financial support to make improvements, said Smith Sloan of LeadingAge.

"The math is simple: Medicaid, the dominant payer of long-term care services, doesn’t fully cover nursing homes’ costs, especially the cost of providing quality care,” she said. “As policymakers consider how to enact the report’s recommendations, they must back their actions with sufficient funding to make changes a reality.”

Oversight and transparency

Nursing home facilities need more oversight, critics say. While federal standards are uniform, states are responsible for ensuring facilities are meeting those standards, and inspections and investigations can vary from state to state, the report said.

State agencies need the resources to monitor long-term care facilities and take action when complaints arise. But the report also calls for the government to take action if states are consistently lagging behind in meeting standards.

The report calls for more transparency in hospital operations, ownership and financing, including making facility-level data publicly available. Nursing home information should be accessible in real time, in an easily searchable database.

Consumers and stakeholders should be able to evaluate the data by the owner, which would shed more light on companies owning facilities in multiple states. And the report calls for easily assessing the quality of care by facility, owner, or management company.

More research is needed

While the report calls for immediate actions to improve nursing homes, the National Academies also emphasized the need for more good research to improve the quality of care. Some existing studies are hampered by limited data.

“This lack of evidence presents challenges to determining the best approaches that will improve quality of care in several areas,” the report stated.

In the wake of the COVID-19 pandemic, the report also calls for national, state and local governments to include nursing homes in planning for future emergencies. The report also calls for long-term care facilities to be properly supplied with personal protective equipment and to be included in drills and training exercises.

Efforts to improve nursing home quality must also consider the voices and concerns of residents and their families. Previous efforts to strengthen nursing homes have not considered the needs of residents and loved ones, the report stated.

As policymakers devise remedies to improve the industry, they must be careful not to worsen existing disparities in quality, including differences among residents of minority groups, the report stated. The report called for more research to get a better handle on the disparities facing high-risk groups.

The National Academies recommended “an overall health equity strategy for nursing homes.”