Despite Declining Quality, Cost of Nursing Home Care Increasing Faster than Medical Services

The cost of nursing home care continues to increase sharply while the quality of nursing homes continues to decline. The cost of nursing home services even eclipses the broader medical field, according to a new study from Georgetown University Medical Center. According to researchers at the university, nursing home prices increased 30.18 percent between 2005 and 2010. Consumer goods increased by 11.7 percent and medical costs increased 20.2 percent during the same period. In New York, nursing home costs increased 21.8 percent during the six-year period – approximately the same level as the medical services industry, at large.

The study published in Medical Care Research and Review analyzed pricing trends for the nursing home industry. Besides the sharp increase in costs each year, the researchers also reported significant variation in nursing home costs across the United States. The cheapest nursing homes in the country are found in Texas where the average cost per resident is $47,800 each year. Nursing home residents in California pay the most for their nursing facilities. Costing almost three times as much as Texas, the average nursing home costs $121,910 a year in the Golden State. According to Fox Business, the gulf between average nursing home prices in California and Texas grows wider each year.

Besides geography, the study reported other factors which influence the cost of a nursing home. Following the basic rules of supply and demand, “nursing home concentration” or the number of nursing homes serving a geographical area played a large role in determining nursing home costs. The authors of the study posit that not only does competition for residents keep prices low but the larger nursing home industry attracts similar talents and the free exchange of information.

Interestingly, the study also found that profit-seeking nursing home chains generally offered lower prices compared to their non-profit counterparts. For-profit nursing homes have come under intense scrutiny for their low quality of care and opaque business structures which can make lawsuits for elder abuse more difficult. The researchers noted that this price differential disappeared when independent nursing homes – either profit-seeking or non-profit – were added to the data. Further, because the study analyzed data from 2006 to 2010, before for-profit nursing homes began consolidating and dominating the industry, the information may no longer be accurate at all.

The attorneys at the Law Offices of Thomas L. Gallivan, PLLC work diligently to protect the rights of nursing home residents.  Please contact us to discuss in the event you have a potential case involving neglect or abuse.

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