A blue-ribbon panel of the National Academies of Science, Engineering, and Medicine has issued a scathing report on the state of nursing homes in the US. Operators, owners, regulators, and payors all are failing patients and residents, the report said.

“The way in which the United States finances, delivers, and regulates care in nursing home settings is ineffective, inefficient, fragmented, and unsustainable …. Immediate action to initiate fundamental change is necessary,” according to the 605-page study.

Some reforms, some studies

The report suggests some specific reforms, especially in the areas of staff compensation and training, oversight, and ownership transparency. Yet, in many cases it calls for new studies and further research into more fundamental reforms, including development of new models of care and financing.

The report was the first time the National Academies has taken a comprehensive look at nursing homes since 1986. That report identified significant problems, including “neglect and abuse of residents, poor quality of life, excessive cost, inconsistent (or lack of) oversight, and the need for high-quality outcomes data.”

Thirty-six years later, the new report concluded, “Despite significant measures to improve the quality of nursing home care in [1987 legislation], the current system often fails to provide high-quality care and underappreciates and underprepares nursing home staff for their critical responsibilities.”

A long way to go

In less polite language: While there have been some improvements in the quality of care, nursing facilities still have a very long way to go if they are to provide their patients and residents with the care they deserve.

Among the report’s most important recommendations is a call for designating a specific percentage of Medicare and Medicaid payments for direct care services. Since those federal payments represent nearly all nursing home revenue, such a step likely would increase compensation for care workers.

By limiting revenues that could flow to other expenses, including returns to investors, this targeting would make facilities less attractive to for-profit operators and owners. Whether non-profits could fill  the gap is an open, and important question.

Staffing reforms

The report also recommended several changes in nursing home staffing. It called for registered nurse coverage 24/7, a full-time social worker, and an infection control and prevention specialist.

One challenge: The report also urged new incentives for small homes. But a full-time nurse, infection-control professional, and social worker may not be cost-effective for a small home with only, say, 10 residents.

The group also called for a new look at minimum staffing requirements. Current federal guidelines are decades-old and never have been enforced. In this case, a careful study in 2022 staffing needs would be valuable.

Long-term care financing

When it comes financing, the panel hinted at important changes without making specific recommendations.

For example, it urged the use of “detailed and adequate nursing home financial information” to determine whether state Medicaid payments for long-stay residents are adequate to fund high-quality care. This is a crucial first step but still would leave states with lots of wiggle-room in the amount they pay for the entitlement to long-term care.

The study also recommended “moving toward a federal long-term care benefit by studying how to design such a benefit” and creating state public insurance demonstrations.

I’m pleased the committee recognized the eventual need for a public long-term care benefit, but this issue has been well-studied. There is an absence of political will to act, not a lack of data.

And while state demonstrations can be useful for many delivery reforms, a social insurance program is more efficient on a federal level than state-by-state. The Washington State experience is a good example of the problems of a single state solution.

Few of the recommendations in this report are new. Many, in fact, were recently suggested by the Biden Administration. And most have been debated for years. Few will read the National Academy’s 600+ page report. But perhaps it will encourage regulators and lawmakers to finally act before nursing homes turn into an epic market failure.