AHCA State of the Nursing Home Sector Fact Sheet Reveals Key Industry Findings

The American Health Care Association and National Center for Assisted Living (AHCA/NCAL), collectively representing more than 14,000 nursing homes and assisted living communities throughout the United States, recently released the 2023 “State of the Nursing Home Sector” fact sheet.

The fact sheet includes data from CMS, CDC, CLA, MACPAC, the Kaiser Family Foundation, and research performed by the AHCA/NCAL. The fact sheet highlights not only the effects of the COVID-19 pandemic, but also the long-term challenges affecting the nursing home industry.

Key Highlights from the Fact Sheet

The fact sheet focuses on how the pandemic has exacerbated the labor shortage, resulting in an access to care crisis for seniors. Those challenges are paired with the fact that the nursing home sector will begin to lose COVID financial aid in 2023, slowing its economic recovery.

Labor Shortage

During the pandemic, more than 210,000 nursing home sector jobs were lost, and the nursing home workforce declined by more than 13%. At the moment, 84% of nursing homes face moderate to high staffing shortages, posing a significant limitation on the quality of care that these nursing homes can provide. In fact, 54% of nursing homes have had to limit new admissions because of staffing shortages, and 67% are concerned that their facility may have to close because of chronic staffing shortages.

If facilities have to close, they would be joining the 465 nursing homes that closed during the pandemic. Of those that closed, 41% were 4- or 5- star facilities. Those closures displaced 18,071 residents.

In an attempt to address the staffing shortage, providers are working to attract caregivers. Nine out of 10 nursing home providers increased wages and offered bonuses in effort to recruit and retain staff. However, 96% of nursing homes find it difficult to hire staff, and 97% noted that a lack of interested or qualified candidates has become a major obstacle in hiring staff.

Financial Challenges

The fact sheet also highlights the already precarious financial situation that nursing homes face. Nursing home goods and services costs have increased by 8.5% due to inflation. With 62% of nursing home residents relying on Medicaid, which reimburses only part of a nursing home’s costs, many providers are struggling. The fact sheet indicates that 55% of nursing homes are operating at a loss, and if that economic strain continues, 52% may have to close within a year.

The loss of COVID aid, including Provider Relief Fund, Medicaid-enhanced FMAP, and American Rescue Plan state funding, will exacerbate this financial strain.

Looking to Recovery

These challenges aren’t going to be resolved quickly. Given the current staffing issues, it’s estimated that nursing homes won’t return to their pre-pandemic workforce levels until 2027. “We have come a long way since the beginning of the COVID-19 pandemic, but nursing homes are facing a mounting crisis that our leaders in Washington can no longer ignore,” says Mark Parkinson, president and CEO of AHCA/NCAL. “This is a call to action. We need lawmakers to pass meaningful reforms, both immediate and long-term, that aid providers in addressing our core challenges.”

Paige Cerulli

Paige Cerulli is a contributing writer to i Advance Senior Care.