“I don't know how many nursing homes will survive 2021”: Financial sustainability during <scp>COVID</scp> ‐19

Abstract

Nursing homes (NHs) have been severely challenged during the COVID-19 pandemic as they manage outbreaks among residents and staff, respond to rapidly evolving policies and requirements, and cope with the devastating loss of residents to the virus, all while continuing to provide care.1 These difficulties have been compounded by substantial financial challenges. NH operational costs are significantly impacted by decreased revenue from fewer admissions and increased expenditures on staff wages and overtime, personal protective equipment (PPE), screening and testing, and fines for inspection deficiencies.2-4 Although Federal CARES Act funding provided short-term relief to NHs during the pandemic,5 it is not expected to guarantee long-term financial sustainability. In this qualitative study, we examine the financial implications of COVID-19 on NH sustainability. This letter reports early findings from the qualitative arm of a large, mixed-methods study. About 160 in-depth, semistructured interviews are being conducted with administrators at 40 NHs in eight diverse healthcare markets across the United States using the unique study design of four repeated interviews at 3-month intervals. Interviews explore the impact of COVID-19 on NHs over this past year, and reveal real-time facility responses, including infection control practices, strategies to maintain staffing and address staffing shortages, ideas to improve staff and resident morale, changes over time, and novel responses to challenges. Each 1-h telephone interview is audio-recorded with participants' consent, then transcribed, reviewed, and de-identified. NVivo (version 12)6 was used to facilitate data analysis. Our rigorous thematic analysis systematically codes the data; a detailed audit trail records team discussions and analytic decisions. To date, 115 interviews have been conducted with administrators at 40 NHs. These repeated interviews include round 1 (n = 40), round 2 (n = 38), round 3 (n = 28), and round 4 (n = 9) interviews. Themes across interviews highlight the difficult financial implications of COVID-19 for NHs. Substantial decreases in revenue have resulted from the need to set aside beds for isolation and quarantining, and reduced or halted admissions, especially for rehabilitation, as elective procedures declined. Participants report that occupancy remains below pre-pandemic levels, and enormous expenditures on staffing, testing, PPE, and fines from survey deficiencies continue. Participants discuss their need for additional supplemental funding due to diminished revenue and increased costs. They struggle to recruit and retain staff in the context of unemployment compensation, and express concern about the high cost of agency staff. Their concerns raise doubts about the sustainability of nursing homes and the industry as a whole as a result of COVID-19. Example quotes are included in Table 1. Interviews with NH administrators revealed significant financial challenges resulting from the COVID-19 pandemic and concerns about the long-term survival of the NH industry. Although our study is limited as our sample is comprised of facilities from eight U.S. healthcare markets, our findings provide critical insights that may aid policymakers in improving NH quality. Additionally, our findings have implications for future discussions around infrastructure support for NHs, especially during times of crisis. Participants explicitly express a need for additional stimulus funding and leniency from penalties resulting from staffing shortages, suggest regulation and oversight of agency staffing fees, and emphasize the necessity for NH representation in future discussion around relevant legislation. Culture change and hospice may be delivery models that could improve care and outcomes, even with declining occupancy. Several questions must be considered in response to administrators' concerns about their financial sustainability. First, will facility occupancy and revenue eventually return to prepandemic levels? As family caregivers return to work, there will likely be increased demand for short- and long-stay NH services, but it is unclear whether occupancy will return to prepandemic levels in the foreseeable future. Second, will NH costs decline to prepandemic levels? Although some costs associated with testing and PPE may decline in the postpandemic period, labor costs will likely not decrease. Finally, if NH shortfalls continue, what are the implications if some NHs close or downsize? Although closures due to poor performers downsizing or exiting the market may be a positive outcome, if higher-quality or safety-net facilities leave the market, older adults will have reduced access to high-quality services. As our reports from NH administrators convey, the crisis of this pandemic compels us to fundamentally reimagine long-term care delivery for vulnerable older adults now to prepare for the unforeseen future. Although provision of care in the community will likely expand in the coming years, some older adults will nonetheless require NH services. In the context of an evolving and uncertain financial outlook, policymakers must adequately fund the provision of high-quality NH care. This work was supported by the Warren Alpert Foundation. The authors have no conflict of interest to report. The corresponding author has listed everyone who contributed significantly to the work. Drs. Gadbois and Shield were responsible for the study concept and design. All authors contributed to data collection and analysis and interpretation of data. Dr. Gadbois was responsible for manuscript preparation. The sponsor did not play a role in the design, methods, subject recruitment, data collection, analysis, or preparation of the article.

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