As Nursing Home Closures Rise, Operators May Pivot to Home- and Community-Based Care

The number of U.S. nursing homes closing their doors is rapidly increasing, a new report from Washington, D.C.-based advocacy organization LeadingAge has found. Home- and community-based service (HCBS) providers are playing an important role.

Overall, more than 550 nursing homes have closed since June 2015, with more than half of the closures taking place in just nine states.

“Over the last several years or so, we’ve seen a pretty steadily increasing stream of headlines — a pretty consistent drip, drip drip of stories — about how Nursing Home A has closed and how Nursing Home B is closing,” Brendan Flinn, LeadingAge’s director of Medicaid and HCBS policy, told Home Health Care News. “We’re just seeing this pretty consistently across the country.”


Additionally, of the more than 550 nursing home closures, nearly 330 have taken place in just the last two years, according to the LeadingAge report. Contextually, there were a total of 15,527 nursing homes in operation as of June 2019.

“Not only are nursing homes closing, but they are closing at faster rates than previously,” Flinn said.

While there are a number of factors contributing to the steady decline in nursing home numbers, including their generally poor public perception, perhaps none are more impactful than the ongoing shift to toward the home.


Since fiscal year 2013, the majority of Medicaid long-term services and supports (LTSS) dollars have gone toward HCBS across all populations. Meanwhile, older adults continue to voice their preference for aging in place, as in-home care providers continue to become more advanced in their care delivery models.

“I would definitely say that the increasing availability of home- and community-based services has played some role in some of the nursing home closures,” Flinn said. “It’s undeniable that somebody who receives HCBS … is one fewer person who’s going to a nursing home.”

More than three in every four people hope to remain in their communities for as long as possible, a 2018 survey from AARP and NORC at the University of Chicago found. Nearly the same number hope to remain in their own home, specifically.

Quality misconceptions

The U.S. Centers for Medicare & Medicaid Services (CMS) launched a framework for ensuring safety and quality in nursing homes last year. On Tuesday, Administrator Seema Verma commented on that framework and quality within nursing homes.

“We’ve seen a nursing home failing to lock its doors, enabling a resident with dementia to wander almost a mile away, later to be found face-down in a sewage drain with broken bones,” Verma said while delivering remarks at the 2020 CMS Quality Conference. “Such instances represent dramatic, sickening failures of the system, and underscore the need for robust government action, as well as collective action from all of us to safeguard patients.”

Shifting reimbursement patterns, changing consumer preferences and the rise of in-home care providers have chipped into the nursing home closures. Despite heightened scrutiny and oversight from the federal government, quality has not been a major driver.

More than 40% of both closed and currently opened nursing homes have 4- or 5-star ratings, the LeadingAge report notes.

“There’s this misconception that all the nursing homes closing are bad facilities,” Flinn said. “But you know, that’s not the case. And for some of the higher-quality nursing homes that closed, there are a variety of reasons.”

Home health and home care providers may see the nursing home closures as a reflection of the times and their success, but some believe a drastic drop in nursing home stock could lead to major problems. From 2020 to 2030, the 75-and-older population is expected to grow by almost 40%, with the most growth projected to come from the 80-to-84 segment.

With some in-home care providers turning away clients because they’re shorthanded, nursing homes will likely be needed as another option of LTSS support in the future. Moreover, aging-in-place isn’t the preference of every old adult.

In a 2019 survey by LeadingAge and NORC, roughly 42% of individuals between the ages of 60 and 72 said they would prefer a nursing home or similar setting to their own home in the presence of a cognitive disability, including Alzheimer’s disease. 

“[It’s concerning] how there are so many nursing home closures taking place now, because it’s going to deplete the supply of nursing home care over the next 10 years when the demand is really set to skyrocket,” Flinn said.

Keys to survival

Paradoxically, home- and community-based services may be one of the keys to survival for nursing home operators.

By creating comprehensive, diversified aging services networks that cater to the varying needs of older adults, nursing homes can mitigate some of the headwinds they’re currently experiencing. Those services could include in-home care and adult day services, to name a few.

A large number of skilled nursing operators — and assisted living organizations — have already taken that approach.

For the past 16 years, LeadingAge and Ziegler — one of the nation’s biggest underwriters of financing for nonprofit senior living providers — have collaborated on the LZ 200 list. The list is a compilation of the largest nonprofit senior living multi-sites, government-subsidized housing multi-sites and single campuses. 

“It’s a great report that kind of talks about the largest residential senior living providers, primarily nursing facilities but any sort of residential care,” Flinn said. “One thing that report does is actually talk about what those communities do to offer HCBS to people who don’t live there.”

Of those included on the LZ 200 list, 29% offered home health care in 2019. Anonther 34% offered home care, with 21% offered adult day services.

“This is definitely something that is on the minds of some of the larger facilities or larger communities out there,” Flinn said. “And I would imagine it will continue to be.”

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