Review Editor’s Note: Editorials represent the views of the Star Tribune Editorial Board, which operates independently of the newsroom.
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When a nursing home closure is done conscientiously, staff duties continue long after the dire news has been announced. RiverView Memory Care in Crookston, Minnesota is a recent example.
On March 17, its leaders announced to the public that it would close due to labor shortages and other financial difficulties. At the time, it had 17 inhabitants. As their families find new care facilities, RiverView staff members—upon request—accompany residents during the move, helping them unpack and make the new place familiar before saying goodbye.
The additional help with the installation is touching but also illustrates an alarming reality. This is no ordinary business closure. It’s a situation that often uproots frail residents and forces families to scramble to find care elsewhere at a time when waiting lists are all too common. It also leaves the communities without a major employer.
These facilities now face an existential threat of financial headwinds, and Minnesota lawmakers must take heed and act quickly. Specifically, a strong short-term relief program this semester should be a priority to help these facilities weather post-pandemic staffing issues and inflation. Also in order: Examining whether the state’s pioneering 2015 nursing home reimbursement reform needs refinement.
Solutions like this would not only benefit care homes, residents and families. They can also help avoid a harmful ripple effect on overall health care. Lack of capacity in nursing homes has already prevented the discharge of hospitalized patients who do not need this level of care but still need specialist assistance. This bottlenecked the capacity of Minnesota hospitals, affecting patients and outcomes at those facilities.
“I don’t know of a nursing home in our state that isn’t in trouble; it’s just the degree of trouble they’re in,” said Carrie Michalski, president and CEO of RiverView Health, to a columnist.
Highlighting Michalski’s concerns: Another nursing home closure took place in mid-April just down the road from his establishment. A letter from Pioneer Memorial Care Center, a 44-bed facility in Erskine, announced its closure in June, saying operations are not financially viable.
Legislators need to take the lead on this because the state sets the rates for those who receive nursing home care. Many residents rely on public money to pay for their care. Minnesota is also one of two states that prevents facilities from charging higher rates to residents who pay privately, a longstanding rule that also deserves careful consideration.
This rule, known as rate equalization, prevents nursing homes from shifting costs to cover losses from public programs, which is the norm in other parts of the health care system. The result is that nursing homes have less flexibility in the face of earnings pressures.
There are 343 Medicaid-certified nursing homes in Minnesota, with 24,600 active beds. The state’s nursing home industry reports that 17 facilities have closed since 2020. The Long-Term Care Imperative also notes that closures don’t tell the whole story about capacity. Facilities that remain open have reduced the number of beds or put them on “sideline”, usually due to staffing issues. This has reduced capacity by 2,597 beds since 2020, “the equivalent of 50 average-sized nursing homes”, the trade group said.
The industry’s struggles aren’t being ignored on the state Capitol, with Republicans laudably advocating for more help. But the majority of the DFL and Governor Tim Walz’s administration argue that the 2015 payments reform – known as “value-based reimbursement” or VBR – will automatically lead to higher spending. Officials said the “statutory increase” will provide $847 million over the next four years. It is important to note that this sum also includes federal dollars, so the state investment is not as high as it seems.
The majority of the DFL also argues that substantial investment in long-term care is also needed for other elderly care, such as aging-in-home services, and that state investment in childcare children will help alleviate labor issues in the nursing home industry. The DFL intends to make historic investments in these other critical areas.
But the industry has compelling rebuttals. He notes the nearly two-year delay before VBR increases nursing home cost catch-up, as the lag could lead to closures. In many cases, facilities have already exhausted lines of credit and other options, Long-Term Care Imperative’s Patti Cullen and Kari Thurlow told the Star Tribune editorial board recently.
We will also add that the current system can cap VBR reimbursement at a substantial cost – traveling nurses, an expensive but necessary staffing option in times of severe labor shortages. This is a significant flaw in the argument that VBR boosts will eventually render installations whole.
The industry clearly needs a good deal of short-term help this session. Providing it would be a highly visible way for the DFLs to support small towns and rural communities. To echo a Walz campaign theme, this is a “One Minnesota” number.
It is also imperative that lawmakers dig deep into what improvements the VBR system needs and whether fare equalization is beneficial. An interim expert commission is expected to report on these complex but essential issues in 2024.
Members of the editorial board are David Banks, Jill Burcum, Scott Gillespie, Denise Johnson, Patricia Lopez, John Rash and DJ Tice. Star Tribune Opinion staff Maggie Kelly and Elena Neuzil also contribute, and Star Tribune CEO and publisher Steve Grove is an advisor to the board.