Health Affairs: The State of The Nursing Home Industry

In a detailed piece on Health Affairs, David G. Stevenson dissects the current issues facing the nursing home industry and the government’s role in overseeing the unwieldy, complex industry. Beginning with the failed hope of the Nursing Home Reform Act, signed into law more than 30 years ago with the purpose of ensuring nursing homes provide a safe and healthy environment, Stevenson quickly delves into the absentee government oversight that has occurred since the landmark legislation.

After the high-profile rollback of several regulations enacted during the Obama administration deemed unnecessarily punitive or ineffective, the Centers for Medicaid and Medicare Services (CMS) appears to be refocusing its efforts on the well-being of nursing home residents.

  1. Transparency.

Stevenson points out that one of the major problems with nursing homes involves their owners. Over the last decade, owners with a record of poor care, unstable finances, or murky corporate entanglements have brought harm on residents that could have easily been avoided. As an example, the author cites Skyline Healthcare – a single owner who purchased more than 100 nursing homes in a short period of time only to go bankrupt. The vulnerable residents of these homes were forced to endure unsafe conditions and poor-quality healthcare only to face the upheaval of moving to a new facility, just because regulators did not thoroughly vet the owners. CMS appears to be focusing on this area, though. The federal government makes some ownership information available online, although Stevenson warns the information is far from complete.

  1. Targeting

The government is still transitioning away from its “one-size-fits-all” regulatory scheme for nursing homes. The author states the current scheme overburdens high-quality nursing homes with onerous reporting requirements. More consequentially, the government’s mandate to inspect and review each nursing home periodically takes away from the minimal resources that should be redirected on identifying unsafe nursing homes and helping bring them into compliance. In 1998, CMS created its “Special Focus Facilities program” which identified the lowest-performing nursing homes and subjected them to more frequent inspections and heftier fines. The program has languished in the last decade by failing to add more poor-performing nursing homes, a consequence of the mandatory “cap” on the number of facilities.

  1. Coordination

Coordination between different regulators will be pivotal, Stevenson argues. Because the federal government pays the majority of healthcare expenses for the elderly, CMS writes the majority of nursing home regulations. State agencies are responsible for performing inspections and implementing regulations. Despite heavy-handed regulation of nursing homes, these agencies routinely overlap in their oversight and shirk in other areas, leaving what Stevenson describes as “substantial gaps.” Some states have made progress in this area by creating or empowering a long-term care ombudsman, an adult protective services agency, and even local law enforcement. In the Senate, Sen. Chuck Grassley is discussing an update to the Elder Justice Act, which helps identify and prevent elder abuse.

Overall, Stevenson paints a dire portrait of the nursing home industry but not one without hope. The problems in the nursing home industry stem from decades of inept regulation, which have now compounded with tight budgets and an influx of elderly Americans. Similar to the growing bipartisan consensus on the scope of the problem that emerged in the last two years, hopefully, a bipartisan solution to these problems will be realized soon.

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