With 40% of Nursing Homes Close to Shutting Down, the ‘Shift to Home’ Is Likely to Accelerate

Across the country, home health nurses and therapists continue to struggle with restrictions around seeing their patients in nursing homes, assisted living communities and other long-term care facilities.

Unfortunately, those restrictions aren’t likely to go away anytime soon, especially when it comes to facilities located in Sun Belt states.

According to a new report from the American Health Care Association (AHCA) and National Center for Assisted Living (NCAL), the nursing home sector is currently in the midst of a major spike of new COVID-19 cases — one that surpasses the previous peak level set at the end of May.

Washington, D.C.-based AHCA and NCAL represent more than 14,000 nursing homes and assisted living communities nationwide.

The latest spike is a direct result of spikes in the general population.

“With the recent major spikes of COVID cases in many states across the country, we were very concerned this trend would lead to an increase in cases in nursing homes — and unfortunately it has,” AHCA and NCAL President Mark Parkinson said in a statement. “This is especially troubling since many nursing homes and other long-term care facilities are still unable to acquire the personal protective equipment (PPE) and testing they need to fully combat this virus.”

Long-term care facilities began limiting in-person visits from outside home health agencies very early on in the public health emergency. In doing so, operators believed they could better control and screen for the coronavirus in their buildings, keeping their residents safer in the process.

Yet many assisted living and nursing home residents have critical home health needs. Limiting residents’ access to home health services could unintentionally cause their health status to worsen, providers argue, ultimately leading to a trip to the hospital or emergency room.

“[We’ve been trying to] fight back to make sure that we have access to assisted living facilities and skilled nursing facilities,” Brent Korte, chief home care officer at EvergreenHealth, said during a recent webinar hosted by Blacktree Healthcare Consulting.

Home care agencies and hospice providers have similarly been restricted from seeing patients in long-term care facilities.

“The biggest challenge is related to delivering care within facilities, where many of our patients reside,” Ken Albert, president and CEO of Androscoggin Home Healthcare + Hospice, told HHCN during a July Disrupt conversation. “For example, 50% of our hospice patients reside in either assisted living or long-term care facilities. Right, wrong or indifferent, the facilities essentially locked their door and prevented access to care.”

The number of new cases in nursing homes, in particular, hit a low of about 5,480 during the week of June 21, according to federal data cited by AHCA and NCAL in their report. That climbed to 9,715 for the week of July 26, the last week with available data.

As of the end of July, nearly 80% of new COVID-19 cases in U.S. nursing homes were coming from Sun Belt states.

‘Substantial doubt’

As a result of the COVID-19 virus, skyrocketing PPE prices and staffing demands, the cost of operating a long-term care facility has drastically increased. That new financial reality is making it much harder for some operators to stay in business. 

In a separate AHCA survey of more than 460 nursing home providers conducted in August, 72% of respondents said they’ll likely be unable to sustain operations at their current pace for another year. Another 40% said they’re unlikely to last six months.

Meanwhile, 55% of survey respondents said they are currently operating at a loss, with 97% of nursing homes saying they’ve lost revenue because of COVID-19.

Nursing home giant Genesis HealthCare (NYSE: GEN) is among the operators to express concern about its financial future.

“Without giving effect to the prospect, timing and adequacy of future governmental funding support and other mitigating plans, many of which are beyond the company’s control, it is unlikely that the company will be able to generate sufficient cash flows to meet its required financial obligations, including its rent obligations, its debt service obligations and other obligations due to third parties,” the Kennett Square, Pennsylvania-based operator announced in a second-quarter earnings release.

The earnings release went on to say that COVID-19 has cast “substantial doubt” about Genesis’s ability to survive the next year.

While home health providers may be struggling to see their facility-based patients in the present, that financial distress may shift more care into the home on a long-term basis.

It’s a point that several providers have made in recent weeks.

April Anthony, CEO of Encompass Health’s home health and hospice business, touched on caring for patients who may have otherwise been directed to a skilled nursing facility (SNF) during a Q2 earnings call in July.

“We’re getting some SNF patients that we wouldn’t have otherwise gotten, particularly directly from physicians,” Anthony said on the call. “But it’s a hard thing to prove what could have, might have, should have happened or would have happened in the prior world.”

Bruce Greenstein, chief strategy and innovation officer at LHC Group, also touched on SNF trends during his company’s Q2 call.

“SNF diversion has become an exceedingly hot topic since COVID started, and it’s something that we’ve been talking about for at least the last 2 years at [LHC Group],” Greenstein said on Aug. 8.