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The Nursing Home Closure Debacle – does it help anyone?

It's news -- 600 nursing homes closed so what’s the strategy to fix? Rant on.  You may have read a depressing article this morning in the Wall Street Journal about the number of people stuck in hospitals with no place to go because there are no nursing homes to take them – which is the status in the UK’s National Health System (NHS).  That was an embarrassment in the UK – and this is a scandal in the US. It never should not have gotten to this point. So many factors crushed nursing homes -- Covid and Private Equity nursing home ownership were big players, followed by government strategy to undermine them. For 14 years, Florida banned new nursing home construction. The federal “Money Follows the Person” was introduced in 2005 to enable seniors to avoid them and receive Medicaid-paid services. Reauthorized repeatedly, it is now authorized through 2027

Why have nursing homes become so publicly scorned? Surely it is to the detriment of older adults stuck in hospitals (see Massachusetts). Was it the misnamed Five Star rating system that got such a bad reputation that Yelp seemed better at helping families find care?  Or was it the senior living industry that seized their business? With deferred move-ins of frailer residents, residents, the for-profit industry changed its offerings, expanding memory care and finding a market near the listed prices charged by nursing homes. Along the way, Medicaid waiver programs appeared in many states to enable alternatives to nursing homes. And finally, there’s the Aging in Place fixation, perpetuated by the media, as well as AARP – just use the checklist and help Mom age in place!  Yet Mom needs a lot of care and so the one-worker/one care recipient home care market is booming – and terribly short of workers.

There is another side to the nursing home story – and maybe you have seen it. You may have visited great nursing homes whose staff members care about the job and the residents.  You’ve seen the rehab functions performed by many nursing homes reimbursed by Medicare and Medicaid.  Pre-Covid, you’ve seen residents of nursing homes share meals with other residents, receive care provided by long-time aides, benefit from visits from community volunteers, or attend religion services provided on Fridays or Sundays.  Perhaps the care was delivered through an order of Carmelite nuns, some of whom, along with retired priests, were also residents.   

Why are nursing home closures bad news?  The comments in the Wall Street Journal article reinforce the post-Covid theme that ‘nursing homes are awful, so who needs them?’ Who exactly? Does that mean families will care for the frailest members at home?  Even with full-time jobs or living many states away? Even for an aging family member with significant dementia and a family has limited assets to pay for (if they could find) home care? Even in homes that are inappropriate for people with disabilities and complex conditions?  Seriously? Who will reset this apparently political debacle, improving the financial structure, providing better management of nursing homes that struggle with a litany of obstacles AND poor media coverage, but still remain open because, guess what? Seniors and families need them? Rant off.


Funding for post-acute providers should be 10X what it currently is. The funding for the care continuum is upside down. The length of stay (LOS) is the longest in a post acute setting. Across an analysis of 4,405 U.S. hospitals in HospitalView, the average length of stay for hospital patients is 4.5 days as of Jun 21, 2023. The post acute industry needs better lobbyists!

In a deeply unsettling trend, around 600 nursing homes have disappeared from the healthcare landscape, despite an ever-increasing demand for elderly care.

As these establishments close their doors, the burden shifts to alternative care solutions, most notably Adult Day Centers. This article delves into the crisis at hand and its impact on the eldercare ecosystem.

Why Are Nursing Homes Closing?
Several factors have been identified in the abrupt closures:

1. Financial Strains: The cost of running a nursing home is skyrocketing, thanks to rising labor costs, stricter regulations, and the expense of keeping up with the latest medical technologies.

2. COVID-19 Pandemic: The global pandemic has hit nursing homes exceptionally hard, resulting in operational disruptions and increased scrutiny.

3. Lack of Funding: Reduced Medicaid reimbursements and other governmental funding have placed enormous financial pressure on these establishments.

4. Competition: Alternative care options, such as home healthcare, assisted living communities and adult day centers, are emerging as strong competitors.

The Role of Adult Day Care Centers
In this landscape of increasing need and decreasing supply, Adult Day Care Centers emerge as a crucial alternative. They offer a range of services including socialization, meals, and support with the activities of daily living. Here are a few reasons why adult day is a much needed lifeline.

1. Affordability: These centers are significantly less expensive These centers are significantly less expensive (nearly 1/6th the cost) than full-time nursing homes.

2. Flexibility: They provide a part-time care option, thereby enabling family members to juggle their responsibilities more effectively.

3. Social Interaction: These environments often offer more opportunities for social activities compared to traditional nursing homes.

The Exponential Demand for Adult Day Care
The disappearance of 600 nursing homes, while demand surges, is creating the perfect storm for alternative care options like Adult Day Centers. Families and policymakers must now reckon with this shift and prioritize funding and support for these establishments.

1. Investment in Infrastructure: The onus is on both the government and private investors to ramp up the infrastructure for adult day care.

2. Staffing: With increased demand comes the need for qualified caregivers, therapists, and medical professionals.

3. Technology Integration: Incorporating modern medical and communication technologies can make the care process smoother and more efficient.

4. Public Awareness: A societal shift in understanding and appreciating the role of Adult Day Care Centers is vital.

The disappearance of 600 nursing homes is a wake-up call that reveals cracks in the existing eldercare system.

However, it also presents an opportunity to reconsider and invest in alternative forms of care, such as Adult Day Care Centers.

Nursing homes fill a critical need in the care for some older adults, and to theorize that they will be replaced by the list of the options you noted is highly unlikely and inappropriate.

Agreed, Laurie. Adult day cares do not provide the same level of clinical care as a SNF. Adult day provides a useful service, but they're not equivalent.

Agreed, Laurie Orlov. If you were in need of a nursing home, an adult day care center is not a good fit. Conversely, if you can benefit from adult day care, it’s highly unlikely you’d be a candidate for a nursing home. Apples and oranges, serving different needs of older adults.

Adult day care cannot replace skilled care, but it certainly is one piece of the puzzle and can address socialization, meals and daily supervision. SNFs are a 24-7 organization so if someone is doing adult day care, that only covers the day. They’ll need services at night too.

Changing the legislation and CMS guidelines to allow for Medicare or private insurance to pay for a portion of Assisted Living services would open up more LTC options for seniors.


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