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About 20 long-term care facilities have closed in Wisconsin over the past 18 months, a reflection of the industry’s challenge with escalating expenses and Medicaid reimbursement rates that fall short of the cost of care.
That closure tally could have been much higher if not for a one-time infusion of federal COVID-19 relief funding this spring, industry leaders say.
Already operating on narrow margins prior to COVID-19, nursing homes and assisted living facilities across the state have been on the front lines of caring for one of the most vulnerable populations throughout the pandemic. That effort has been costly, both in its financial impact on operators and emotional toll on residents and workers.
“This is real,” said John Sauer, president and chief executive director of LeadingAge Wisconsin. “You and I get to go back to our home or apartment and hopefully stay involved with family and friends and not think about what it’s like if you’re in need of care and services of a long-term or assisted living facility. But this is a 24/7 endeavor (for those facilities).”
In May, Gov. Tony Evers announced $100 million in federal relief would be directed to long-term care, emergency medical services and home and community-based services for expenses related to COVID-19, such as overtime pay, changes to sanitation procedures and disruptions to care.
The federal assistance might be enough to get Wisconsin’s long-term care facilities through the calendar year, but providers are concerned about what will happen when that funding expires.
“The real concern is what happens once these one-time dollars are no longer available and we can’t use them to sustain our operations,” Sauer said.
For North Shore Healthcare – the Glendale-based operator of 71 skilled nursing centers and assisted living communities – the federal CARES Act funding has been a lifeline, but a longer-term solution is needed to address the industry’s financial challenges, said David Mills, chief executive officer. Prior to the COVID-19 outbreak, the daily per-person cost for North Shore’s Wisconsin facilities was $237, offset by a $180 Medicaid reimbursement rate. That’s a slightly narrower Medicaid reimbursement gap than the average across Wisconsin’s skilled nursing facilities, which lose between $70.66 and $78.58 per day for each Medicaid resident they serve, according to a study by LeadingAge Wisconsin.
COVID-19 has exacerbated that challenge, with many facilities seeing decreased occupancy rates due to fewer referrals coming from hospitals. At the same time, acquiring personal protective equipment, deploying wide-scale testing and covering overtime and “hero” wage bumps throughout the pandemic have driven up costs.
“There is no question that without stimulus dollars there would be a real problem in the post-acute world,” Mills said.
While providers can implement incremental innovation through technology and facility improvements, Sauer noted they are limited when it comes to finding new revenue sources.
“There are no elective surgeries or other ways we can significantly become more entrepreneurial in what we do,” he said. “We provide care and services to older adults. We can do it in innovative ways and we can do it by reconfigurations of buildings. … (But) we were not well-positioned financially before COVID, so if we just go back to pre-COVID days, the challenge is still there.”
Nursing homes were among the first businesses in the state to close their doors to visitors at the outset of the pandemic. Many made the decision to lock down before the state’s stay-at-home order was enacted in March and most continue to enforce those policies to date.
“The general public might have COVID fatigue, but (long-term care providers) really can’t afford to let up on their efforts because of how critical their mission is in keeping older adults safe,” Sauer said. “It’s just as intense now as it was back in late March.”
PPE remains a challenge for many facilities, particularly as they consider easing some visitation policies.
According to a recent study by the American Health Care Association and National Center for Assisted Living, 15% of Wisconsin nursing homes lack a one-week supply of N95 masks and gowns.
Meanwhile, supply shortages have driven up prices. North Shore is purchasing masks, gloves and gowns at prices about three to four times higher than pre-COVID times, Mills said.
“I talk to (long-term care) administrators,” Sauer said. “They say every part of their day is devoted to trying to secure adequate PPE. Most facilities don’t have widespread COVID in their building, (but) we’re still burning through a high volume of PPE and it’s reached what I’m told are historically high prices.”
Since the Wisconsin Department of Health Services began reporting facility-based COVID-19 outbreaks in April, there have been investigations at 534 long-term care facilities, 285 of which were active as of press time. In long-term care facilities, public health officials initiate an investigation when a single case is confirmed.
Despite the summer spike in cases, industry leaders say putting visitations on hold indefinitely isn’t a tenable strategy for residents long-term.
“To say they have to make due with phone calls or FaceTime or Zoom or Skype, it’s tolerable for a few weeks, a month,” Sauer said. “But will we ask them to be physically separated from a loved one for months on end with seemingly no end to that in sight? That is unreasonable to adopt that kind of policy and assume it’s not going to have an impact on residents.”
While weather permits, nursing homes could soon allow outdoor, socially distant visits. Facilitating indoor visits safely, however, is a more complicated endeavor.
“Like everyone else, we’re praying for a vaccine to come sooner than later but we can’t wait for that,” Sauer said. “We are going to have to look at ways that we can have more creative visitation policies and we’re looking for further guidance coming out of public health and the Department of Health Services and from the CDC as well.”