People in the long-term and post-acute care (LTPAC) industry like to say that they’re the second most highly regulated industry in America—second only to nuclear power. Whether that’s factually correct or not, senior care operators face plenty of state and federal regulations.
One new rule may well overshadow all the others. Finalized in April 2024 by the Centers for Medicare and Medicaid Services (CMS), it imposes strict staffing standards on Medicare- and Medicaid-certified long-term care facilities. Those facilities will have to provide 3.48 daily hours of care per resident per day, including 0.55 hours of care by a registered nurse. Registered nurses must also be on hand 24/7/365 to care for residents. The American Health Care Association (AHCA) says only 6 percent of nursing homes currently meet the requirements, while CMS itself estimates that 80 percent of facilities will have to staff up.
Increasing staffing sounds good, but the staffing mandate is bad policy. And it won’t necessarily result in better care. In fact, CMS’s own data show that just increasing the staffing ratio does not directly lead to improved quality.
Although the mandate will be phased in over the next several years, it’s hard to imagine most facilities being able to comply. CMS predicts that this unfunded mandate will cost the industry up to $6.5 billion—and private estimates put the cost even higher.
But money isn’t the only issue. There simply aren’t enough caregivers to go around. Nursing schools would need to turn out another 102,000 nurses to meet the mandate, according to one third-party estimate.
A raft of challenges facing LTPAC operators
As concerning as the staff mandate is, it’s just one challenge LTPAC operators are facing today. As in virtually every other industry, costs are higher now than they were before the COVID-19 pandemic, and they don’t show signs of dropping. What’s more, the reimbursement in some states levels’ is unacceptably low. Even if you are a quality operator in those states, it's getting very, very difficult to operate.
On a more positive note, we’re excited to see increasing attention on delivering value-based care. When it’s implemented properly, value-based care improves patient and resident outcomes while lowering costs—a true win-win situation. If it’s done thoughtfully and empathetically, it can make a real difference. In fact, it’s probably the only way to make LTPAC sustainable.
Value-based care. The staffing mandate. Rising costs and low reimbursement rates. These and other factors promise to change the future of long-term and post-acute care.
Two paths forward
So what should LTPAC operators be doing in the present? Let me offer two recommendations.
First, operators need to collaborate with policymakers. When you choose to operate in a highly regulated environment, you can only achieve your best outcomes by helping to guide policy, not by taking an us vs. them attitude. At PointClickCare, agencies sometimes are surprised by our collaborative approach and our openness and transparency. This shows we have to continue to work with them so they understand not just what the operators do, but how technological solutions like those we offer can support effective regulation and reduce the burden on already overburdened staff.
Second, operators need to embrace technology to address the challenges they’re facing and to advocate for government investment in that technology. Telehealth is a great example. During the pandemic, we all learned that a lot of healthcare can be delivered virtually. It’s more convenient for the patient and allows better access to specialists, especially for people in rural areas. In terms of the staffing mandate, it would allow caregivers to serve more broadly and effectively.
Another example is using technology to better connect post-acute and acute providers. Even today, nursing home residents sometimes leave a hospital with discharge instructions stapled to the sheets of their gurneys. Staff at the nursing home must read and interpret that information, enter it into a computer and check to make sure it was entered correctly. Each of those steps takes human intervention and time, and often doesn't even have people working at the right level. A digital health record that followed that patient/resident through those transitions of care would reduce the amount of human labor, reduce the risk of error (which often just starts the cycle all over again) and lead to better care outcomes at a lower cost.
Good care rests on a three-legged stool: bricks and mortar, human capital and technology. That's how you achieve the optimal investment of resources and how you create value-based care. And that only happens if there's true collaboration between the private and the public sector.
