In a rare move for a sitting president, President Biden mentioned nursing home issues during his State of the Union address on March 1. The fact that Biden indicated his administration will be taking a tougher stance on nursing homes underscores the increasing complexity of the regulatory landscape of long-term care facilities in America going forward.
However, experts have pointed out that nursing home compliance is hindered by chronic Medicaid underfunding. According to a new report by the American Health Care Association and National Center for Assisted Living, the nursing home industry is “on the verge of collapsing” due to underfunding and the COVID-19 crisis.
Although it's clear the industry has a few bad apples that must dealt with, most nursing homes offer quality care and experts agree that nursing home compliance efforts will significantly benefit from more government funding. In his speech, Biden attempted to shift the blame for nursing home issues onto private equity firms, saying “as Wall Street firms take over more nursing homes, quality in those homes has gone down and costs have gone up.”
However, Biden didn’t mention the problem of Medicaid underfunding during his speech. Rather, he mentioned nursing homes in the context of what he considers corporate price-gauging, saying that “Tonight, I’m announcing a crackdown on those companies overcharging American businesses and consumers.”
Biden knows that inflation is his biggest political liability, which explains why he made sure to address rising costs in his speech and attempted to shift the blame for inflation onto companies and “evil” Wall Street investors which own them. In his speech, Biden also said that corporate consolidation and resulting anti-competitive business practices including price-gauging are partly responsible for rising prices, specifically mentioning that the meat-packing industry is dominated by only four major players. In reality, however, the root causes of inflation are multifaceted and stem from various supply chain issues, labor shortages, and higher energy costs. These problems have been exacerbated by the Russian invasion of Ukraine and inflation has become a huge challenge for Biden and policymakers worldwide. Labor shortages in particular have hampered the nursing home industry and Biden failed to mention that in his speech—nor did he mention Medicaid underfunding. Instead, he focused on private equity firms, which he said have lowered nursing home quality, and vowed to address this issue by saying that Medicare will “set higher standards for nursing homes.” Biden’s plan for improving nursing home quality was outlined in an official statement released on February 28 which announced a set of reforms for the industry. The statement said that the reforms, which were developed by and will be implemented through the Department of Health and Human Services (HHS), are designed to “improve the safety and quality of nursing home care, hold nursing homes accountable for the care they provide, and make the quality of care and facility ownership more transparent so that potential residents and their loved ones can make informed decisions about care.” Biden’s February 28 announcement on nursing home reforms criticized the role of private equity in the nursing home industry, but once again failed to mention the problem of Medicaid underfunding. Going forward, nursing home organizations will need to make their voices heard so that nursing home issues can be addressed in a comprehensive way, which necessarily includes Medicaid funding and reform. Nevertheless, the fact that Biden is taking nursing home issues seriously is a good sign, and it’s encouraging that a sitting president went as far as mentioning nursing homes in his State of a Union address.