Yuki Iwamura/AP Photo
Nursing home residents wait on line to receive a COVID-19 vaccine at Harlem Center for Nursing and Rehabilitation, January 15, 2021, in New York.
President Biden will soon release the details of his $400 billion, ten-year human infrastructure program. It sounds like a huge sum.
But there are so many categories of human caregiving that even $40 billion a year doesn’t stretch all that far. Long-term care alone, residential and at-home, costs about seven times that much, and is grossly inadequate.
With the need for high-quality pre-K and child care, as well as home care and residential nursing care, and the disgracefully low pay in the entire (heavily Black and immigrant, heavily female) sector, we could spend the entire sum on any one of these areas.
According to the White House fact sheet released March 31, the emphasis will be on long-term care for the elderly, the disabled, and those with chronic conditions. Biden proposes to:
Expand access to long-term care services under Medicaid. President Biden believes more people should have the opportunity to receive care at home, in a supportive community, or from a loved one. President Biden’s plan will expand access to home and community-based services (HCBS) and extend the longstanding Money Follows the Person program that supports innovations in the delivery of long-term care.
Put in place an infrastructure to create good middle-class jobs with a free and fair choice to join a union. The HCBS expansion under Medicaid can support well-paying caregiving jobs that include benefits and the ability to collectively bargain, building state infrastructure to improve the quality of services and to support workers. This will improve wages and quality of life for essential home health workers and yield significant economic benefits for low-income communities and communities of color.
These are superb goals. But unless the Biden administration, by executive action, cleans up the nursing home industry, too much of the money will end up in the pockets of for-profit operators rather than caregivers. The industry is now about 70 percent for-profit. As the Prospect has reported, the trend is for private equity companies to buy up nursing homes.
For-profit chains extract as much money as possible, typically at the expense of staffing ratios and the pay of nurse aides who provide most of the hands-on care. A landmark study published by the National Bureau of Economic Research found that after acquisition by private equity, a nursing home’s interest expenses nearly quadrupled, and its rent almost doubled.
The business model of private equity is to load up the acquired company (a nursing home, a newspaper, a retailer) with debt, and then use the borrowed money to pay the private equity partners special “dividends,” so that they make exorbitant returns even if the enterprise fails.
This is a corrupt practice that should be illegal even for ordinary businesses. It’s unconscionable when it comes at the expense of frail elderly people whose care is paid for mostly by taxpayers. The pandemic revealed the human costs.
Once COVID struck, much of the contagion and needless death in nursing homes was the result of chronic understaffing and care workers being shuttled among facilities. As of April 15, more than 182,000 COVID deaths, of residents and caregivers, have occurred in nursing homes.
Most long-term care costs—about 57 percent—are borne by Medicaid. And Medicare also subsidizes nursing homes by paying for short-term stays of up to 60 days. Together, taxpayers cover about two-thirds of nursing home revenues.
There is a tough law already on the books providing for regulation of nursing homes, the consequence of earlier waves of nursing home scandals. It was enacted as part of the 1987 budget reconciliation, after Democrats took back the Senate in 1986.
Among other things, the law provides a range of penalties, including putting a nursing home under temporary management.
Among the law’s specific requirements, nursing homes must:
- Have sufficient nursing staff.
- Develop a comprehensive care plan for each resident.
- Prevent the deterioration of a resident’s ability to bathe, dress, groom, transfer and ambulate, toilet, eat, and to communicate.
- Provide, if a resident is unable to carry out activities of daily living, the necessary services to maintain good nutrition, grooming, and personal oral hygiene.
- Ensure that residents do not develop pressure sores and, if a resident has pressure sores, provide the necessary treatment and services to promote healing, prevent infection, and prevent new sores from developing.
- Ensure that the resident receives adequate supervision and assistive devices to prevent accidents.
- Maintain acceptable parameters of nutritional status.
- Provide each resident with sufficient fluid intake to maintain proper hydration and health.
- Ensure that residents are free of any significant medication errors.
- Promote each resident’s quality of life.
- Maintain dignity and respect of each resident.
Compared to how for-profit nursing chains actually operate, these standards are a sick joke. Needless to say, most for profit-nursing homes do not meet them. And under Trump, enforcement of nursing home standards went from inadequate to token.
Existing law is obviously broad enough that the Biden administration could explicitly mandate and enforce staffing ratios, pay levels, and limit profits and debt loads as a percentage of Medicaid reimbursements. It could also bar chronic bad actors from owning or operating nursing homes at all.
Spending more federal money on Medicaid reimbursements will improve conditions only to the extent that the money actually reaches caregivers and does not merely line owners’ pockets.
The disproportionate share of COVID cases and needless deaths in long-term care facilities is an indictment of nursing homes and their extractive business model generally. A 2020 GAO report to Sen. Ron Wyden found that 40 percent of nursing homes had serious deficiencies in their control of infections before COVID.
Biden’s human-infrastructure initiative is inspired. To provide better care and better pay to caregivers, we need to begin by cleaning out the rotten private infrastructure that employs them.
