Assisted living communities are more at risk of closure than nursing homes

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Nearly 20% (19.5%) of Minnesota assisted living service providers responding to a recent survey said they may be forced to close or sell facilities due to “difficult financial conditions “. The number represents nearly 400 assisted living locations across the state. In contrast, 11% of care home respondents said they were at risk of closing facilities in the next year, which equates to 40 care homes.

The survey, conducted by Long-Term Care Imperative in April, the results of which were released on Thursday, also found that more assisted living communities than nursing homes increased employee salaries by more than 10%, although the ‘fairly difficult’ overall financial performance of the living communities is not as ‘sluggish’ as ​​the financial performance of nursing homes.

“While they [assisted living providers] are more able than nursing facilities to increase charges to stabilize their financial performance, the ability to do so will be limited by market realities, and in many cases has already been limited,” says the long-term care imperativea collaboration of LeadingAge Minnesota, which is the state partner of the National LeadingAge Association and also Argentum, and Care Providers of Minnesota, which is the state affiliate of the American Health Care Association/National Center for Assisted Living.

A total of 28.6% of assisted living respondents said they had reduced ability to maintain financial solvency, an additional 3.6% said they were beginning to reduce their ability, and an additional 4.2% said that they planned to reduce their capacity even more than they already have.

“If many sites close, it will cause huge problems accessing this service, at a time when alternatives like nursing homes are also under strain and may not be able to accommodate clients who do not cannot access assisted living sites,” said the Long-Term Care Imperative mentioned.

Forty-five per cent of respondents living on assistance said they would face an immediate cash crunch if income fell. More than half of assisted living respondents (58.7%) said they could only function for a month or less without Medicaid income to cover payroll and other expenses, and 16.2% additional said they could only operate for two more months without such income.

The median operating margin of respondents in assisted living in March was -1%, and 39.6% of respondents reported having margins below -10%. The provider’s median loss was $1,943 for the month, which equates to an annualized loss of $23,316. Rural suppliers had more difficulty, on average.

Wages have increased

More than half of participating assisted living providers reported increasing base hourly wages for certified practical nurses by more than 10% over the past two years despite a lack of ongoing funding; others said they raised salaries for the position by up to 15%, while some either did not raise salaries or raised them by a lesser amount. Many providers have reported wage increases of up to 15% for registered nurses, licensed practical nurses and dietetic staff. In many cases, reserves are used to cover these and other cost increases.

An October survey by the Long-Term Care Imperative found that more than 12,000 positions in Minnesota’s assisted living communities were unfilled, and nearly a third of assisted living recipients independent living said they were limiting the census due to staffing levels. Staffing remains at similar levels today, the group said.

In late April, the state Senate passed a bill to address the situation of the state’s long-term care workforce by including a $1.3 billion surplus priority for raise rates for the long-term care, personal care and disability exemption service industries. The bill passed the State House on May 3. The amount would be on top of an earlier $322 million package introduced to address staffing issues at the facilities.

A bipartisan commitment required

With results From the April survey in hand, the long-term care imperative calls for a bipartisan commitment to support providers, first by adjusting state Medicaid rates to support competitive salaries. “Without sufficient staff, elder care providers cannot admit residents, resulting in lost revenue for organizations across the state,” the group noted.

With just weeks left in the state’s legislative session, the group has asked providers to “flood” Gov. Tim Walz’s (D) office with appeals beginning today, asking that he and the State legislators are prioritizing older adults and their caregivers in assisted services. living communities and retirement homes.

The Long-Term Care Imperative’s April survey drew responses from 179 assisted living facilities and 156 nursing facilities. For more details on the survey results for retirement homes, see McKnight Long Term Care News.


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