11% of Nursing Homes; 20% of Assisted Living Face Closure According to New Long-Term Care Imperative Survey

Posted on May 5, 2022 by Jeff Bostic

Aging services providers across the state face dire financial conditions that jeopardize access to care for Minnesota's seniors, according to a recent survey conducted by the Long-Term Care Imperative.

The survey – which garnered responses from 156 care centers and 179 assisted living settings – illustrates the challenges faced by providers during this unprecedented workforce shortage. The survey findings are sobering and show that providers have been doing all they can to respond to the workforce crisis, creating an existential threat for many of them.

Negative 8.7% Operating Margin for the Average Nursing Home

For care centers, the most significant finding is that March's financial performance was abysmal, with a median operating margin of negative 8.7%. If March is indicative of all of 2022, the average care center will lose almost $900 thousand on operations, which is a considerable problem when many of them have already used some or all of their reserves. The financial performance is primarily driven by significant increases in expenses, including the large number of providers who have given employee wage increases of more than 10% in the last two years and the number experiencing large spikes in temporary staff use and the cost of that staff.

One significant finding is the number of providers looking at sales or closure as they continue to struggle financially. 11% of care centers, which works out to about 40 statewide, indicated they are looking at those options. That will have severe impacts on access if it comes to pass, and the number considering those options is likely to grow if the financial performance from March continues for several more months.

20% of Assisted Living Face Closure

For assisted living settings, the picture is also quite challenging. While financial performance is not as gloomy as care centers, they are at a median operating margin of negative 1% in March. An even higher proportion of them have increased employee wages by more than 10%, and they are using reserves to cover those and other increased costs in many cases. While they are more able than care centers to raise charges to stabilize their financial performance, the ability to do so will be limited by market realities. In many cases, it has been already.

The number of assisted living providers considering closure or sale is even higher than care centers, at around 20% or about 400 locations statewide. If numerous sites close, that will cause substantial access problems for this service, when alternatives like care centers are also under stress and may not be able to take the clients who cannot access assisted living sites.

Action Needed Now to Help Struggling Providers

The story told in the data is staggering, and the Long-Term Care Imperative understands the importance of sharing this story to help advocate for action. To help aid in our advocacy efforts and encourage the legislature to pass funding to support caregivers with the wages they deserve and ensure access to care for Minnesota’s one million seniors.

We cannot address this crisis without your help and a bipartisan commitment to supporting the care our growing senior population needs.

This starts with adjustments to state Medicaid rates for senior care services to support competitive, family-sustaining wages. Minnesota has over 23,000 open positions in nursing homes and assisted living settings. Without sufficient staff, senior care providers cannot admit residents, resulting in revenue losses for organizations throughout the state.

Take Action

In addition to efforts to garner media attention, we will ask all providers to contact the Governor on Monday, May 9, to share why action is needed. Our goal is to flood his office with calls that illustrate just how dire the circumstances of inaction this session are.

On Monday, May 9, we ask you to call Gov. Walz; click here to connect or dial 651-370-8632. Tell the person who answers the phone that seniors and their caregivers need action this session. Here are suggested talking points you can use:

• Hello, my name is ____, and I provide care in a long-term care setting.
• According to a recent survey conducted by the Long-Term Care Imperative, 40 nursing homes and 400 assisted living settings face closure.
• Over 14,000 older adults are in jeopardy of losing the care they need in long-term care settings throughout the state.
• Without permanent investments from the state, the average nursing home is projected to lose over $800k this year alone.
• This crisis will continue to worsen for seniors needing care if left unsolved until the 2023 session. Lawmakers cannot go home without taking action.
• In the final stages of the legislative process, I respectfully ask that seniors and their caregivers be your top priority. Invest in the wages professional caregivers deserve and help ensure access to care for Minnesota’s growing population of seniors!
• Please support the Senate’s Health and Human Services bill that funds permanent wage increases needed to recruit and retain professional caregivers.

Thank you for your advocacy. With only a few weeks left in the legislative session, we’ve got to keep the pressure on to garner support for the funding needed to pay caregivers the wages they deserve and ensure access to care for Minnesota’s seniors.