Advocates Urge Reform in Face of Older Adult Care Financial Crisis, USA

07/24/2006

More than one-fourth of Minnesota’s nursing homes are facing financial problems serious enough to force many to close in the near future.

The Long-term Care Imperative, a collaboration of older adult services providers, is urging Minnesota legislators to look at funding of nursing home as part of a comprehensive reform plan. Included in the Imperative’s proposal is a strategic reduction in the number of nursing home beds in Minnesota. However, according to the Imperative, without a planned approach to closures, large areas of the state could be left without access to nursing facilities.

The Imperative also is proposing reforms that would reduce Minnesota’s reliance on nursing homes and would give older adults more care and living choices, including community-based services to support those able to live independently in their own homes or in assisted living facilities. The proposals will require additional spending and new sources of funding, including incentives to reduce dependence on government payment for older adult services. Currently, the state and federal governments pay for the care of about three-fourths of Minnesota nursing home residents.

The state dictates the rates that most nursing homes charge. As part of the state’s budget fix, nursing homes rates have been frozen for two years, contributing to a financial crisis for many facilities. According to a study of nursing home economics sponsored by the Imperative, an estimated 26 percent of Minnesota’s nursing homes face funding problems serious enough to risk closing.

“Minnesota continues to rely on Medicaid and Medicare to fund older adult services. With state and federal cuts in those programs, we end up putting just enough money in nursing homes to keep them open, but not enough to give residents care with the dignity they expect. And we are doing nothing to expand choices,” said Rick Carter, president and CEO of Care Providers of Minnesota, an Imperative member.

While some parts of the state have enough nursing home capacity to accommodate closings, other areas are in jeopardy of losing vital services. For example, in each of nine counties—Cook, Hubbard, Kanabec, Lake of the Woods, Mahnomen, Marshall, Red Lake, Stevens and Wilkin—there is only one nursing home.

“Older Minnesotans should not be at risk of losing access to nursing home care because the state isn’t providing adequate funding,” said Gayle Kvenvold, president and CEO of Minnesota Health and Housing Alliance, another Imperative member. “In many cases, the crisis has been masked by the innovation and dedication of caregivers. But the steady erosion of nursing homes will make it hard for many older Minnesotans to receive quality care without leaving their life-long communities.”

The analysis of nursing homes at risk was compiled by the Minnesota accounting and consulting firm of Larson, Allen, Weishair & Co. from data collected from about 70 percent of the state’s nursing facilities. Facilities are at risk of closing if they had operating margins of negative 5 percent or worse. Even by that conservative measure, 26 percent of Minnesota’s facilities are in trouble, according to the study. Operating margin is a standard measure of the financial health of an organization.

The Imperative is proposing reforms that would assure that people have access to high quality skilled nursing facilities regardless of where they live. The proposals also would expand community-based services, helping older adults live safely in their own homes for as long as possible. Other options, including assisted living, also would be more available.

“Care can’t wait for politics to catch up to the needs of an older population that is growing rapidly,” added Carter. According to the U.S. Census, the number of Minnesotans over age 60 is expected to increase 70 percent by 2020, with the fastest growth coming in the over-85 age group. “Minnesotans want to live with dignity in their older years. That shouldn’t be a choice just for the wealthy, but for all Minnesotans,” said Kvenvold.

For more information about the Long-term Care Imperative, please go to http://www.carecantwait.com

Long-term Care Imperative
http://www.carecantwait.com