Long-term care providers slowly recovering from pandemic's financial hits

August 15, 2021

By JULIE MINDA

The pandemic has dealt heavy financial blows to long-term care providers and many are still reeling from the impact.

That is according to a sampling of leaders from ministry long-term care facilities, who said that sharp run-ups in staffing and supply costs combined with reduced census during the pandemic had a significant negative impact on the bottom line. Rebuilding census will be essential to recovering financially. But, the leaders said, attracting new residents is difficult, given current misperceptions of long-term care facilities.

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Kastner

Steven Kastner is president and chief executive of Trinity Health Senior Communities, which has about two dozen long-term care communities in six midwestern and northeastern states. He said, "I see many long-term care organizations struggling. We're all trying to rebuild census, but it is a long climb, and it doesn't happen overnight."

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Salopeck

To help rebuild census, said Allison Q. Salopeck, "what I really think is needed is to change the narrative about long-term care services and supports" so that people understand that most such facilities are high-quality places to live, with staff who truly care for residents. Salopeck is president and chief executive of Jennings, which offers a continuum of care in the Cleveland area.

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Mor

'Really horrible' situation
Dr. Vincent Mor is professor of health services, policy and practice and the Florence Pirce Grant University Professor in the Brown University School of Public Health in Providence, Rhode Island. During the pandemic, he has led a research team that has been using data analytics to understand the long-term care resident experience and to help long-term care facilities with decisions around COVID protocols.

He recalled that at the start of the pandemic, "things were really horrible" in long-term care. No one knew much about coronavirus, there was great anxiety about its trajectory, there was inadequate protective equipment and insufficient testing supplies. Facilities were receiving confusing information from government sources, and virus-related cases and deaths were escalating in the facilities.

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D'Youville Life & Wellness Community in Lowell, Massachusetts, created a Garden of Resilience & Renewal during the pandemic as a calm space where staff and residents can unwind. The aspersorium and aspergillum were used in a blessing ceremony to hold and sprinkle holy water.
Photo courtesy of The McAuley

Providers scrambled to put in place protective measures, including lockdowns, to safeguard residents and staff. Residents of long-term care facilities were given high priority when mass vaccinations began eight or nine months ago and vaccination rates have been high among residents. Infection rates and death rates have plummeted as a result, and this, along with falling infection rates in communities, allowed a gradual reopening of facilities to visitors and a relaxation of infection protocols, Mor said.

The financial impact of this year-plus of upheaval has been significant, he said. "Everyone has been losing money. Revenues are down. I'm expecting to see bankruptcies." He said the only reason bankruptcy has been held at bay for many long-term care facilities is that they received an influx of government money during the pandemic.

Survey results released June 29 by the American Health Care Association and National Center for Assisted Living reveal that more than half of the 616 U.S. nursing homes and nearly half of the 122 assisted living communities responding to the survey said their organizations are operating at a loss. Just one quarter of respondents said they are confident they can last a year or more.

An analysis earlier this year by the American Health Care Association and National Center for Assisted Living concluded that the nursing home industry is expected to lose about $94 billion over the course of the pandemic, and more than 1,800 facilities could close.

Unexpected costs
Ministry long-term care leaders said the greatest financial pressures during the pandemic have related to staffing, unanticipated supply costs and loss of revenue due to decreased census.

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From left, Jim Messina, Ramona Beckius and Harry Davidson — all residents of The McAuley in West Hartford, Connecticut — take a break from a putting competition on the campus' "19th Hole." The McAuley is part of Trinity Health Senior Communities. Steven Kastner, president and chief executive of that system, says admissions to independent and assisted living facilities had slowed during the worst of the pandemic but are rising again.

Naomi Prendergast, president and chief executive of D'Youville Life & Wellness Community in Lowell, Massachusetts, said that campus had budgeted for its usual supplies, "and then out of nowhere, or seemingly, we had an enormous need for personal protective equipment and of course early in the pandemic in particular, the costs were outrageous." D'Youville's foundation raised about $75,000 from the community to soften the blow.

Kastner of Trinity Health Senior Communities noted that the cost of COVID tests and screenings also took an unexpected bite out of the supply budget.

Census down, revenues down
A more intractable source of financial stress had to do with fluctuating census. "Long-term care facilities make money when beds are full and lose money when occupancy rates drop," said Mor.

According to a report from the National Investment Center for Seniors Housing & Care, occupancy rates at U.S. skilled nursing facilities as of May were 13.7 percentage points below pre-pandemic levels.

Prendergast said D'Youville had "months where we were severely down on census," which hurt revenues.

Kastner said within the Trinity Health Senior Communities organization, the greatest occupancy declines were in the skilled nursing facilities, which had to discontinue admissions during lockdowns. Independent and assisted living admissions also slowed because many prospective residents wanted to wait out the pandemic before moving. Salopeck of Jennings said that not being able to offer tours of independent and assisted living facilities during lockdowns decreased the stream of prospective residents.

Salopeck added, when hospitals temporarily discontinued elective surgeries at the pandemic's start, that reduced the count of Medicare-reimbursed short-term rehab patients coming to Jennings.

Infusion
According to analysis by AARP, three-fifths of the fees of the nation's 1.3 million nursing home residents are paid by Medicaid. Medicare pays for limited stays in skilled nursing facilities for qualified patients who have been discharged from a hospital, and according to the analysis, it is a major source of income due to Medicare's higher reimbursement rates. The decrease in payments from both government insurance programs during the pandemic as patient census declined put a significant dent in providers' revenues.

The ministry leaders who spoke to Catholic Health World said their facilities benefited from a variety of government allocations, including Coronavirus Aid, Relief, and Economic Security Act stimulus dollars; loans from the Paycheck Protection Program; and Federal Emergency Management Agency funding.

Prendergast said the relief "was really crucial. The additional funding coming in was truly a lifesaver."

Jerry Correa, chief executive of St. Francis Healthcare System of Hawaii, said the government funding "was huge" in terms of its impact. The system would have had to reduce staff count, he said, were it not for the money it received in Paycheck Protection Program loans and CARES stimulus. "It allowed us to retain staff and help the community," he said.

Repositioning long-term care
The ministry leaders said their census numbers are slowly returning to near pre-pandemic levels. They added that while they have no immediate sustainability fears — as many of the respondents of the American Health Care Association survey had — they do have concerns about their ability to fully restore their finances.

Salopeck said the fact that Jennings is well diversified in terms of the levels of care it offers on its campuses has helped protect it during the pandemic. But she said Jennings like most other long-term care sites "is not out of the woods yet."

Kastner said Trinity Health Senior Communities facilities are aggressively managing costs and focusing on expenses to recover financially.

Kastner said increasing resident counts across the continuum of care will be essential to restoring long-term care, but facilities are being hampered by public perception problems that existed before the pandemic and in many cases worsened over the past year and a half. Salopeck said while the public seemed to have a great deal of admiration for long-term care staff and the commitment they showed during the pandemic, the industry sustained "black eyes" when nursing home outbreaks and resident deaths were covered in a way that laid blame entirely on the facilities.

Kastner said Trinity Health Senior Communities is focusing on the message that, given that Trinity Health is mandating vaccination among staff, those long-term care facilities are the safest places to be now.

Salopeck said Jennings, too, is countering a false narrative. She said aging in one's home and staying there until death is not an option for everyone. Frail elderly people who do not have healthy caregivers and supportive services are very vulnerable when they live in isolation in their own homes. On the other hand, she said, in high-quality senior care facilities, they can receive care and companionship.

"People are thriving in our residences," Salopeck said, and it's important for people to know that.

 

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