The Biden administration published regulations last month requiring most nursing homes to maintain specific staffing levels. As a result, roughly three in four nursing homes will have to hire additional personnel.
Progressives argue the rules will lead to better care. “For residents, this will mean more staff, which means fewer ER visits potentially, more independence,” said Vice President Kamala Harris. “For families, it’s going to mean peace of mind in terms of your loved one being taken care of.”
But government diktats, however well-intentioned, won’t address the issues behind staffing shortages. Nursing homes have long had to contend with low reimbursement rates from Medicaid, which make it hard to attract and retain employees. Simply telling nursing homes to hire more staff won’t address that problem.
A March survey from the American Health Care Association found that 99% of nursing homes have job openings. Eighty-nine percent are actively searching for registered nurses. Nine in 10 recently increased wages, while roughly seven in 10 have invested in staff training and education.
Still, the supply of professional caretakers isn’t rising. Ninety-four percent of the 441 nursing homes surveyed said it’s difficult to attract new employees. Two-thirds observed “a lack of interested or qualified candidates as an extremely big obstacle.”
No wonder, given the exhausting nature of the work. One study of 540 nursing homes found that almost one-third of registered nurses “exhibited high levels of burnout.” COVID-19 has only exacerbated job fatigue. Nursing homes lost around 15% of their workforce during the first two years of the pandemic. Today, it would take more than 130,000 additional workers to make up the difference.
President Joe Biden’s new regulations won’t change the underlying mismatch of supply and demand. They’ll instead force nursing homes to compete for scarce workers by raising wages. Federal estimates indicate the new rules could cost the nursing home industry around $40.6 billion over 10 years.
They can ill afford those additional costs. As Stephen A. Moses of the Paragon Health Institute has observed, Medicaid, the facilities’ chief payer, reimburses nursing homes at a lower rate than do other insurers. Indeed, in 2019 Medicaid failed to cover the cost of care at roughly 80% of nursing homes.
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Imagine trying to operate a grocery store or restaurant when you have to sell to your chief customer at a loss!
Almost 20% of nursing homes have shuttered a unit, wing, or floor due to staffing issues, according to the March American Health Care Association survey. Two-thirds fear they’ll have to shut down altogether. The Biden administration’s new rules could make that even more likely.
Sally C. Pipes is president, CEO, and Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is False Premise, False Promise: The Disastrous Reality of Medicare for All (Encounter 2020). Follow her on X, @sallypipes.
