COVID-19 has cast a pall over the nursing home industry. Older adults and their families never looked forward to moving into a skilled nursing facility, resulting in loss of choice, independence, and privacy. But now, after more than 115,000 deaths linked to long-term care institutions, the fear of infection and isolation is making an unpopular option a genuine taboo.

Nursing homes, long-considered a place where good people go to die, are in a death spiral as an industry.  Nursing home occupancy rates are down 15 percent, representing the loss of nearly 200,000 residents since the start of 2020 as a result of deaths from the virus and declining admissions.  Many of the nation’s hospitals no longer refer even frail elders to nursing homes, preferring to send them home for outpatient rehab and home care.

Even before the coronavirus attacked, support for institutional long-term care was shifting to home and community-based services.  Payment models are changing. The trend towards community-based services as opposed to nursing home placement was formalized with the July 1999 Olmstead Decision, a court case in which the US Supreme Court upheld the right of individuals to receive care in the community as opposed to an institution whenever possible.

This trend has continued and, as a result of federal regulation changes during the pandemic, Medicare is allowed to pay for virtual doctor visits and intensive hospital-based care in patients’ homes.  Additionally, the shift in Medicaid funding, the primary source of long-term care support, began moving away from institutional care in 2013 and that trend is continuing.

According to the Kaiser Family Foundation, home and community-based supports and services in 2013 totaled 51 percent for the first time, with 47 percent for institutional care.  Home care’s share continued to increase as nursing home’s share declined.  As of 2018, the last year for which statistics are available, the split was 57 percent for home care compared to 43 percent for nursing homes. Home care is likely to reach 60 percent in the current year, and the trend will continue.

The Centers for Medicare & Medicaid Services in September 2020 announced the availability of up to $165 million in supplemental funding to states currently operating so-called Money Follows the Person (MFP) demonstration programs. This funding will help state Medicaid programs jump-start efforts to transition individuals with disabilities and older adults from institutions and nursing facilities to home and community-based settings of their choosing.

“The tragic devastation wrought by the coronavirus on nursing home residents exposes America’s over-reliance on institutional long-term care facilities,” said Seema Verma, administrator of the Center for Medcare and Medicaid Services, in September 2020. “Residential care will always be an essential part of the care continuum, but our goal must always be to give residents options that help keep our loved ones in their own homes and communities for as long as possible.”

“Home and community-based care is not only frequently more cost effective, but is preferred by seniors and adults with disabilities seeking to maintain the dignity of independent living. This new federal investment will help states get our loved ones back home,” she added.

While this shift was announced during the Trump administration, the incoming Biden/Harris team is expected to continue, possibly accelerate, the trend. The Biden plan will protect Medicaid funding and make sure the program gives those on Medicaid who need long-term care the flexibility to choose home- and community-based care.

For those who are investing in skilled nursing, the prospects are, indeed, bleak. Even with the expected growth of the share of the population over age 65 to 20 percent in 2030, it is unlikely that the empty beds will be filled and the decline will continue.  A recent study by AARP found that the problems of nursing homes are more complex than owners maximizing profits at the expense of quality.  Nursing homes are based on a failed business model based on government payments that will never allow the growing number of private equity investors to realize the profits they seek.

Unlike an upscale hotel that rents only the rooms for about the same price as the daily payment per bed in nursing homes, the nursing homes have significant personnel costs for providing the care that residents need.  The increasing acuity of the most-frail older adults, the need of staff to have more training and credentials, and the unwillingness to work in labor intensive, sometimes dangerous conditions will force owners to pay a “living wage” in order to provide needed care. While the 30 percent of homes that are non-profit aren’t looking for return on investment, they have the same cost pressures without supplemental income from investors.  Medicaid, the primary source of nursing home income, was never designed to pay for all of long-term care.

Neither will Medicaid payments be sufficient to afford increases in pay and benefits, personal protective equipment (PPE), testing, infection prevention, and vaccinations that are required or be able to provide the privacy and safety from contagion that single occupancy rooms offer to residents and that most residents prefer.

Long-term care consumers and their families who might need the around-the-clock care of nursing homes are not willing anymore to go to “your grandmother’s-style nursing home.”  Most prefer to remain at home, but for those who need more care, the nursing homes of the future that will attract them are much more likely to be small, high quality, single-room facilities that resemble real homes.  The so-called “Green House” model is the most appealing setting for older adults of today and tomorrow who might need significant levels of 24/7 care.

Owners, investors, and management of long-term care facilities are not totally responsible for the low regard of today’s traditional nursing homes.  The shifting consumer attitudes favoring home care are not the only reason either.  The other problem is the failure of federal and state government to provide effective oversight.  Insufficient investigative staff, inadequate fines, and favoritism in waiving fines account for major lapses in transparency and accountability. Many complaints are not investigated for lack of sufficient experienced investigators to respond within the required 10-day limits and some are never addressed.

Advocates such as those who’ve formed Dignity Alliance Massachusetts, Long Term Care Community Coalition in New York, the Gerontological Society of America, AARP, and many others are encouraged by the growing trend toward home-based, long-term care, and smaller, Green House-style institutional settings.

However, the transformational reform of long-term care that we all seek needs active partnership and support from older adults and those with disabilities themselves.  They need to tell their stories to elected officials and the media as well as advocate with us on social media and with decision-makers.  We need a changed mindset seeing older adults as people with different visions of their future, and not solely as patients who need care.

Advocates and policy-makers need to focus transformational reform efforts by answering three basic questions:

Could it be possible for more older adults to remain much longer in their homes and communities, and return to their homes more quickly after receiving medical treatment, thus reducing the need for institutional care?

How might the business model of institutional care, and especially nursing homes, be rethought in order to better provide for the needs and desires of older adults needing assistance?

How can we address financing and workforce issues to support the answers to the first two questions?

Initial thoughts on these questions are available in a thoughtful document developed by Convergence entitled, “Rethinking Care for Older Adults.”

Our collective vision of an “Age-Friendly” America will finally be realized when the “two-headed dragon of Ageism and Ableism” are slain, and older adults are no longer marginalized and ignored.  Our response to the challenges of aging will no longer be to spend our last years warehoused in traditional nursing homes.  Older adults should be able to live in communities of opportunity, continuing to make contributions in a wide range of pursuits.  In the New Year, we should resolve that programs and policies to address the changing demographics of the aging population will finally get serious consideration and support among the public and policy makers.

Richard T. Moore is a former long-time Massachusetts legislator whose primary area of activity was in health care policy and long-term care.  He is active in Dignity Alliance Massachusetts, an advocacy coalition seeking transformative change in long-term care, but the views expressed in this article are his own.