Originally published in the April edition of New England Administrator.
The care of old, vulnerable and chronically ill people (long-term care) in the United States has been neglected for as long as there have been old, vulnerable, and chronically ill people in the United States. As part of the pioneer culture in the US, youth and robust adulthood are revered. Until 1965, if older folks were lucky to have caring and supportive families and friends who also had means, their situation was probably okay. If not, then it was miserable, and they probably didn’t survive long.
It was so bad, for so long that the country was at a critical juncture, and the Social Security Amendments were passed after only 4 months of drafting. The model was to provide de-minimis government-sponsored coverage for professional residences (nursing homes) and domiciliary care (home care). This represented an enormous break from the prior social contract and spawned a huge bureaucracy (HHS).
How have we done as a country, as a society, since 1965? The care of the old, vulnerable, and chronically ill citizens in the United States is still neglected. “Evidence,” you say; “give me evidence!”
- United States spends 46% of the OECD average on long-term care while spending 246% of the OECD average on acute healthcare.
- Nursing homes are chronically underfunded, with 66% operating at a loss.
- About 77% of nursing homes were built between 1963 and 1970, which means that, if their mandatory retirement age were 65, they would be forced out of service. And there haven’t been many new nursing homes built since the 1990s. Which raises the question: Would you stay at a Hilton or Marriott that was 60 years old?
- Home care, and community-based services are bewilderingly complex to access, and even when the consumer qualifies, applies, and can afford their portion of the costs, the agencies are often not able to appropriately staff to meet consumers’ needs.
Since 1965, with a few exceptions, coverage for long-term care in the US has continued to be neglected, and actual provision of care has deteriorated. We all know what’s coming: the ineluctable surge in demand based on baby boom demographics. At this point, the necessary physical infrastructure, programmatic coherence, and trained workforce does not exist to safely care for the old, vulnerable, and chronically ill people in the US. Will public sentiment today spur us into action, as happened in 1965? Unfortunately, I don’t think so. Is there an implied social contract to provide long-term care? If there is, it’s broken.
Several years ago, we wrote and spoke about the potential for change in LTC, suggesting that the US was at a “critical juncture.” Such a point occurs when there’s widespread agreement that the current state of affairs is unacceptable and that something new and substantially different is needed–a new social contract between society and government. Such a critical juncture occurred in 1965, with the passage of the Social Security Act How is this acceptable? There are lots of reasons how the US arrived at this point.
“Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for. We are the change that we seek.” – Barak Obama
Generosity: A blessing or a curse?
The main enabler of the continued failure in long term care is the generosity of the American people; a tremendous amount of care for the old, vulnerable, and chronically ill is provided for free by families, relatives, and friends.
In 2023, the unpaid, frontline workforce include approximately 38 million people, and at around 36 billion hours, the value of the services was almost $600 billion. That’s 45% more than the federal and state governments paid for nursing homes and home care combined. Is this a bad thing? Occasionally no, but in large measure, yes.
When families choose to nurture an old, vulnerable, or dying person, wonderful blessings often flow, which enrich the lives of manifold people within the family and in the greater community. Yet too often, this unpaid caring is the result of lack of access, or lack of money. In other words, too often families don’t see that they have any other choice.
Some of the 36 billion unpaid hours are a drag on the emotional and financial well-being of US families. If only 25% of these hours were “relieved” by available, affordable care alternatives, 9 billion hours would then be released into the economy, which would be a 3.2% boost the nation’s GDP.
The US long-term care market is facing significant challenges as it strives to meet the growing demand for services while grappling with persistent staffing shortages and evolving care models.
Pioneering loneliness
Further enabling the sad state of long-term care in the US is yet another manifestation of the pioneering spirit, which is the endurance of loneliness. We are culturally trained to accept and endure loneliness. While recent public health researchers clearly shows that loneliness is epidemic and contributes to a host of chronic and acute illnesses, age-qualified individuals in the US persist in preferring to live alone. In the research, this bias is very durable between and among genders, age groups, and income strata.
The Harvard Joint Center for Housing Studies has predicted that by 2050, 60% of the singlefamily residences in the United States will be occupied by an individual over 80 years of age living alone. While we might challenge the proportions, the point is that “aging in place” is looking pretty lonely. Why does this bias toward living alone endure? The first is that the alternatives appear to be abysmal. Second is that acceptable alternatives appear to be too expensive. In the US, when an industry wants to move a market, they explain to the consumers why. When Apple wants me to buy a new iPhone, I am flooded with good reasons.
What are my choices?
What has the seniors housing industry done to convince age-. Income-. and asset-qualified seniors that theirs is a reasonable alternative to growing progressively more lonely and isolated at home? Very little.
What the industry has done is make the labels, categories, and types more complicated and confusing. Researchers clearly shown that age-. Income-. and asset-qualified consumers cannot differentiate effectively between and among congregate independent living, age-qualified housing, assisted living, independent living with services, memory care, nursing care, etc. The result is that the average acceptance of seniors housing in the US is about 10% (a few metropolitan areas rise from 25% to 30%). This means that 10% of qualified seniors access or accept seniors housing options. One method of marketing strategic planning is a SWOT (strengths, weaknesses, opportunities, and threats) analysis. It aims to identify who the competition is, and determine on what dimensions the competition is stronger or weaker.
Here we have an entire industry competing against loneliness and can’t win. Is that effective marketing?
Nursing Homes
The supply of nursing home beds is contracting. Occupancy rates in 2020 fell dramatically from 85% to 68%, and while there has been some recovery, rates have only increased to 72% as of 2021. There is also margin pressure, with Medicare Part C (so-called Medicare Advantage) growing in market share, and putting the screws to SNFs. This drop in occupancy and margin pressure spell disaster, causing closures, and reduced admissions. By our estimates, 30% of the SNF operations are “zombies,” unable to support themselves with a margin, and have little or no cash on hand. The proposed staffing mandates were to be the final nail, so to speak. Even if the Biden staffing mandates are removed, the underlying financial and workforce drags persist.
Assisted living and other housing options
In contrast to the skilled nursing inventory, virtually all the US inventory of assisted living was built after 1990. There are about one million residents in the country’s assisted living residences. The sector continues to recover from the pandemic. Assisted living providers are not immune to the staffing challenges facing the broader longterm care industry, with 77% reporting worsening workforce supply problems.
In the rush to deploy assisted living, developers and operators selectively targeted the higher socioeconomic strata in each marketplace. This is how assisted living earned its reputation as being “too expensive for me.” Despite its Cadillac position in the marketplace, assisted living is attracting older and sicker consumers, becoming the de facto waiting room for the nation’s nursing homes. Few providers seem prepared for this ineluctable migration of high acuity residents.
Home care services
Demand for home health care is growing. Pioneering loneliness (see above) as well as demographic changes, technological advances, and shifts in healthcare delivery models are driving an increasing demand for homebased care services. Like other segments of the long-term care market, home care agencies face challenges in meeting this demand due to workforce shortages and regulatory pressures.
HCBS/LTSS
Home and community-based services (HCBS) or long-term supports and services (LTSS) have to be referenced as sources of fulfilling the care demand among age-, income-, and disability-qualified individuals. The mind-numbingly complex labels, as well as the even more complex procedures for accessing these services guarantees maldistribution; a significant proportion of the population that qualifies for, and should access HCBS/LTSS does not.
And there is no motivational alignment to correct this maldistribution. For example, most of these services are partially funded by the state, and most states are already crushed by their Medicaid budgets. Doctors, hospitals, nursing homes, and home care agencies are poorly informed about the services, and are unable or unwilling to “get smart” in order to serve as navigators for the qualified population. There are a handful of local case managers who, while very competent, must charge the consumer herself for the navigation services, which immediately disqualifies about 70% or more of the otherwise qualified population. The result is that, with few exceptions, utilization of these programs is below theoretical demand.
The state of the sector and ACHCA
The care of and support for the nation’s old, vulnerable, and chronically ill people (long-term care) in the United States has been and remains neglected. The residential options and program supports that have been designed, built, and developed since 1965 are in disarray, grossly underfunded, and maldistributed. No political or social urgency to repair the infrastructure or rationalize the programs appears on the front page or on the horizon. This is a desultory disaster for those in need, their families, and society at large.
ACHCA lacks the scale to make a difference as a lobbying group, to impact public option, or to offer meaningful policy alternatives to HHS, CMS, or the states’ Medicaid directors.
A rear-guard action seems the only reasonable strategic option. By this I mean:
- Consolidate or merge with as many of the LTC advocacy groups as possible.
- Deliver CEUs as efficiently and economically as possible.
- Harmonize messages, i.e., social, emotional, and epidemiological and economic costs.
- Sprinkle disaster stories across public-facing media.
- Design alternate models so that they’re available and at-the-ready should the politicians recognize we’re at a critical juncture.