PRINCETON – The nation’s nursing homes have been staggered by the toll of COVID-19 on their frail and elderly residents, as well as staff. But as nursing homes begin focusing on reform and recovery, they also are confronting the fiscal impact of the pandemic.
NJHA’s Center for Health Analytics, Research and Transformation (CHART) surveyed the state’s nursing homes to assess the economic impact of the crisis since March and compiled the findings in the bulletin Nursing Homes Face Economic Upheaval as They Focus on Care and Recovery: The Financial Impact of COVID-19. The results, based on responses from one-third of the state’s nursing homes and extrapolated statewide, reveal:
- New Jersey nursing homes experienced an approximately 20 percent increase in expenses for each month from March through June – or $100 million per month for each of the four months. Nursing homes further project a 12 percent increase in expenses for July through December, or an increase of approximately $350 million for the last six months of the year. All told, for calendar year 2020, CHART projects an increase of $750 million – or 13 percent – in nursing home expenses. The increases are attributable to staffing agency costs to maintain staffing levels; overtime or premium pay; purchases of personal protective equipment at significantly higher prices in the marketplace; and other expenses such as equipment rentals, telehealth technology, virtual visiting platforms, facility modifications and the cost of weekly testing of residents and staff, which began May 2
- Nursing homes also recorded a 20 percent decline in revenue per month for March through June, due largely to declines in non-COVID admissions from community-based and hospital referrals and a disruption of outpatient services in New Jersey’s healthcare delivery system. These decreases in admissions also are attributable to declines in hospital elective procedures, since many patients who undergo such procedures may be admitted to nursing homes for a short recovery stay.
These findings are reinforced by data from the Centers for Medicare and Medicaid Services. In a report issued June 7, CMS stated that occupancy rates declined 22 percent in N.J. nursing homes – the highest median percentage drop in occupancy in the nation – compared to the 4th quarter of 2019. Late in 2019, nursing home occupancy in New Jersey was near 83 percent. It fell to just under 50 percent at the peak of the pandemic and, as of June 7, sits at a median of approximately 64 percent, compared with a national median occupancy of 75 percent.
“COVID-19 has revealed vulnerabilities in our system of care for our most frail, elderly residents, and this data provides yet another perspective of the challenges facing nursing homes,” said Cathy Bennett, NJHA president and CEO. “Our aim in gathering this data is to inform the discussion as public health, providers, payers, senior advocates and other stakeholders come together and move forward in prioritizing care for the elderly.”
Additional analysis from CHART provides a profile of New Jersey nursing homes and their residents as further insight for stakeholders as they work to address needed reforms for the future. Nursing home residents in New Jersey, for example, have greater prevalence of several key underlying chronic conditions than the national average, including hypertension, diabetes, hyperlipidemia and ischemic heart disease.
“This information is valuable in fully understanding the needs of the people we serve in New Jersey nursing homes,” said Theresa Edelstein, senior vice president of Partnerships Transforming Health at NJHA. “Our elder residents, and the hard-working staff who care for them, must be the focal point as healthcare stakeholders move forward with lessons learned from this pandemic.”
