Nearly 70% of older adults will need long-term care services, according to Harvard’s Joint Center for Housing Studies. But for many individuals, the cost of affordable long-term care services is beyond their reach in an industry facing higher labor and supply costs, a labor shortage, and other challenges. According to KFF (Kaiser Family Foundation) and The New York Times, nearly three million older Americans who need long-term care are not receiving it due to lack of accessibility and the high cost of assisted living facilities, nursing homes, and aides at home.
The High Cost of Care
Four out of 10 adults (43%) are not confident they will have enough money to pay for the care they may require as they age, according to a KFF survey. Just under three in 10 (28%) individuals 50 to 64 years old, many of whom are on the verge of retirement, say they have saved money to cover future living support needs. Although the percentage is higher among individuals 65 and older (48%), half of this age group still says they don’t have the money for senior care.
According to the Harvard Joint Center for Housing Studies, most older adults have limited options to offset the cost of senior care. Just 14% of long-term care services were paid out of pocket in 2021, according to the Congressional Research Service (CRS). Private long-term care insurance is unlikely to make these services affordable for most households. The CRS estimates that only 8% of senior services were provided through long-term care or private health insurance in 2021. Medicare does not cover most long-term care services. Medicaid is the largest payer for senior services, covering 44% of care in 2021 in nursing homes and through waiver programs for home and community-based services.
Bottom line: The overwhelming majority of adults say that it would be impossible or challenging to pay the estimated $100,000 needed for one year at a nursing home (90%) or the estimated $60,000 for one year of assistance from a paid nurse or aide (83%), the KFF survey revealed.
Mixed Reviews on the Quality of Care, Income Plays a Role
When asked about the quality of care in residential facilities, the majority say they are “somewhat” satisfied, with about a quarter saying they are “very” satisfied with the quality of care they or their loved ones received in a long-term care facility (23%). About a third concur regarding the quality of care provided by paid nurses or aides (35%). One-third (33%) say they are unsatisfied with the quality of residential care, while one-fifth (22%) say the same about the care provided by paid aides. Individuals with household earnings less than $40,000 are more likely than those with higher incomes to be dissatisfied with the quality of care in residential institutions (42% vs. 28%, respectively).
Staffing Shortages in Senior Care
Exacerbating problems with access to senior care is the growing shortage of care providers. According to the Bureau of Labor Statistics, the senior care sector has lost nearly 229,000 caregivers (or more than 14% of its workforce) since February 2020, the worst job loss among all healthcare sectors.
Additionally, in 2023, there were 600 fewer nursing homes than six years ago, according to The Wall Street Journal. The COVID-19 pandemic, in part, expedited the closing of nursing homes since families preferred loved ones to remain home. According to The Wall Street Journal, COVID-19 claimed the lives of more than 167,800 nursing home patients, as well as many of their employees. Hospital staffing levels have improved since the pandemic’s peak, but nursing homes have not.
The Impact of Understaffing on the Industry
Understaffing doesn’t only limit admissions. According to the American Health Care Association and National Center for Assisted Living (AHCA/NCAL)
- More than 21,000 residents have been displaced by closures
- 30 more U.S. counties became nursing home deserts
- Two out of five closures had four- or five-star ratings
- Only three new nursing homes have opened in 2023
- 55% of nursing homes are turning away prospective residents and patients
- 48% percent of nursing homes have waitlists spanning at least a few days
- 21% percent of nursing homes are downsizing beds or units, and 24% have closed a wing, unit or floor because of labor shortages
Understaffing also leads to compromised care quality as overworked personnel struggle to satisfy residents’ various and complicated demands. Basic daily routines such as grooming, feeding, and mobility aid can suffer due to insufficient staffing. This neglect can lead to a loss in physical health and emotional well-being and an increased chance of avoidable accidents or medical issues. The economic consequences for long-term care and home care providers are also serious, impacting their reputation, operational costs, and ability to deliver quality treatment.
The psychological impact on both residents and staff is equally significant. Residents may feel ignored or alienated as a result of insufficient interaction, while staff suffer from burnout, stress, and moral anguish as they deal with high workloads and the emotional problems of providing substandard care.
Addressing the Senior Care Crisis
Several solutions for tackling the country’s senior care crisis include:
- Getting policymakers and other stakeholders on board to address the issues: The ability to deliver and finance long-term care does not meet the demand of the demographic shift to an older population. LeadingAge President and CEO Katie Smith Sloan in an interview with McKnight’s Senior Living said, “Policymakers and the public have to understand how long-term care is delivered and paid for – in a patchwork, inefficient system – and appreciate the needed support.” A systemic approach to fixing the issues is needed, according to Sloan.
National Investment Center (NIC) for Seniors Housing & Care President and CEO Ray Braun told McKnight’s Senior Living that “issues related to access and affordability are on NIC’s radar screen,” and he called them an ongoing challenge for the sector. “NIC has been committed to defining and finding solutions for the middle-market consumer segment, and this work is more important than ever,” he said. “We need to be creative in finding scalable solutions and models to bring forth greater access and options for the wave of baby boomers ahead.”
- Building intergenerational living and communities: This includes everything from services that match students or working professionals with older adults to live together to building communities to resolve the social care crisis older adults face while boosting the supply of affordable housing for students and young families.
- Addressing the workforce shortage in long-term care: This requires a multifaceted approach involving various stakeholders, including policymakers, healthcare providers, educational institutions, and the community, to ensure quality care for an aging population. For example, new safety standards may pressure nursing home operators to dramatically increase recruiting.
The Biden administration stated that it intends to establish a minimum amount of time nursing home employees must spend with each person. Several years ago, federal researchers concluded that 4.1 nurse hours were safe for residents. According to KFF, almost seven out of 10 nursing homes do not have enough nurse staff to devote four hours daily to each person.
Technology solutions such as assistive devices, health monitoring systems, and communication tools can help streamline tasks, reduce workload, enhance overall efficiency in caregiving, and improve the bottom line for businesses. Implementing internal training programs and continuous professional development opportunities empower caregivers with the skills needed to handle diverse resident needs effectively. Emotional support and counseling services to mitigate burnout and improve mental health are also integral to enhancing business performance through skilled and satisfied staff.
Additional solutions to address staffing shortages include:
- Creating flexible staffing options that include part-time or on-call specialists to meet peak demand. This method enables a more dynamic and responsive staff, improving care quality and corporate agility.
- Encouraging relationships with private firms to increase funds and resources. Public-private partnerships can bring innovative solutions, experience, and financial support to address staffing issues, improving a business’s capacity to offer quality care while being financially viable.
- Using innovative recruitment techniques, including competitive pay, benefits, and unique professional progression opportunities.
Conclusion
“We know that the majority of Americans want to age in community, in their homes,” said Sloan in her interview with McKnight’s Senior Living. “That’s an opportunity for providers across the spectrum,” she said. “The big question for our members is determining the path that is consistent with their mission and sets them up to be successful well into the future. It’s really about making the smart and strategic choices and executing them while at the same time navigating workforce shortages and other pressing issues.”