About halfway through his first State of the Union address Tuesday night, President Joe Biden promised higher nursing home standards.
“As Wall Street firms take over more nursing homes, quality in those homes has gone down and costs have gone up,” Biden said. “That ends on my watch. Medicare is going to set higher standards for nursing homes and make sure your loved ones get the care they deserve and expect.”
The Biden administration laid out, in general terms, a plan for nursing home improvement on Monday, the day before the speech.
“The pandemic has highlighted the tragic impact of substandard conditions at nursing homes, which are home to many of our most at-risk community members,” reads the release.
According to the Centers for Disease Control, about 1.3 million Americans lived in nursing homes in 2015, and the administration estimates the nation’s current nursing home population at 1.4 million. Citing the Kaiser Family Foundation, the fact sheet says more than 200,000 long-term care facility residents and staff have died of COVID-19.
As for Wall Street firms taking over nursing homes, the administration is referring to an uptick in private equity investment. A working paper from the Institute for New Economic Thinking reports private equity investment in nursing homes increased from about $5 billion in 2000 to $100 billion in 2018.
According to a study of private nursing home ownership published in the Journal of the American Medical Association, about 5% of American nursing homes are now owned by private equity firms, part of a larger private equity investment in health care.
“Private equity (PE) investment in U.S. health care has grown dramatically, with $750 billion in deals from 2010 to 2019,” the study reads. “These investments have concerned policy makers because PE firms often create complicated asset, management and operating structures that may avoid transparency and accountability in patient care. A major target of PE firms has been nursing homes.”
The highlight of the proposal is a minimum staffing level requirement. Biden’s plan would leverage Medicare and Medicaid to raise staffing levels in American nursing homes. The Centers for Medicare and Medicaid Services (CMS) would be responsible for creating the staffing standards, and facilities that fail to meet them “will be held accountable.”
Reactions to the plan from officials at the American Health Care Association, an organization representing the nursing home industry, were mixed. Beth Martino, the organization’s vice president for public affairs, blamed Medicare for underperforming nursing homes and minimized the impact of private equity investment.
“Calls for increased government scrutiny, regulations and fines do not recognize the nature of COVID-19 and how public health officials failed to prioritize nursing homes for resources before and during the pandemic,” she said in a statement. “The real issue is that Medicaid has chronically underfunded nursing homes for years, leaving facilities on the brink of closure. More will close soon if they don’t receive proper government support coming out of this pandemic.”
In a separate statement, the AHCA’s President, Mark Parkinson, claimed a workforce shortage that existed before the pandemic may make it difficult for facilities to meet new staffing standards.
“We would love to hire more nurses and nurse aides to support the increasing needs of our residents,” Parkinson said. “However, we cannot meet additional staffing requirements when we can’t find people to fill the open positions nor when we don’t have the resources to compete against other employers.”
In addition to the staffing requirement, the White House proposal calls for eliminating living situations with three or more residents in one room, more publicly available information to help families make decisions about care, and increasing the CMS budget for safety inspections at nursing homes.