Planning for Life

The State of Nursing Homes in Massachusetts

Posted by Harry S. Margolis on February 15, 2012

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By Harry S. Margolis

I recently attended a fascinating presentionat by W. Scott Plumb, Senior Vice W. Scott PlumbPresident of the Massachusetts Senior Care Association, the nursing home trade association.  He described an industry that is beset by both the changing face of long-term care and lower reimbursement rates from both Medicare and MassHealth.

With more alternatives for home care and assisted living, nursing homes are caring for people for shorter periods of time who require a greater amount of care.  No longer are nursing homes places where seniors live out the last few years of their lives.  More and more they provide transitional care after hospitalizations until residents can return home and end of life care for people who can no longer live at home or in assisted living facilities even with assistance.

Nursing home funding comes from the following sources:

  • Medicaid      66%

  • Medicare      15%

  • Private Pay   13%

  • Other            6%

Other relevant facts about the state of nursing homes today:

  • 9 out of 10 nursing home residents come from hospitals.

  • 60% return home.

  • 54% stay in nursing homes less than a month, with 86% being discharged within six months.

  • Only 10% of nursing home residents stay longer than a year and only 2% more than 5 years.

  • Nursing homes in Massachusetts employee 50,000 people and three quarters of their budgets, on average, go to paying wages and benefits.

  • The number of nursing home days (number of residents times number of days in facilities) declined from 13.2 million in 2000 to 10.5 million in 2009, reflecting the changing nature of nursing homes from custodial to more acute care.

  • According to Plumb, nursing homes on average lose $32 a day caring for MassHealth covered residents, an increase from $19 per patient day in 2006.

  • They make up for this to some extent by making a "profit" on private pay and Medicare patients, but Medicare has also reduced its reimbursement rates, reducing the profit on Medicare patients.

In all, Plumb describes an industry that is quite squeezed with nowhere left to cut costs.  Any further cuts would adversely affect quality of care.

Topics: Medicare, MassHealth, long-term care planning, nursing homes

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