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This past October 1st, the Centers for Medicare and Medicaid Services (CMS) put into effect new regulations concerning the payment or reimbursement of services to skilled nursing facilities and certain types of housing for older Americans. The reductions in payments were targeted at 3-4%. As the regulations were being finalized late this summer, we posted reactions from many facilities saying they would have to cut staff and/or services to comply with the ruling.
How are the cuts now playing out in the planning of elder care in America?
A new survey conducted by Avalere Health LLC, released this week, shows just how such elder-care facilities have reacted to the new stipulations. Overall, the trend is clearly toward reductions and cuts. And they come at a time when ever more Baby Boomers move toward retirement along side their longer-living GI Generation predecessors.
That facilities would be trimming staff and/or staff salaries to comply with the reductions of 3+% in payments may not be surprising, whatever your opinion on the pay cuts themselves. But what Alavere’s survey also shows is the knock-on effect the federally-mandated cuts will bring to longer-term projects, like expanding facilities. Over 76% of the directors of facilities who responded to the survey stated that their organizations were postponing or outright stopping plans to develop infrastructure and space to accommodate the growing number of retiring Americans.
In Tennessee alone, nine projects are on hold – eight in Ohio. Alavere argues that the cessation of such expansion means some 5000 lost jobs in supplies and construction – not to mention the lost opportunities to hire new staff.
Alavere’s survey makes for some grim statistical reading. The cuts mandated from the CMS are part of the ongoing struggle to balance the federal budget. Yet these cuts also seem to be smothering any ‘multiplier effect‘ that economists are always looking for when trying to kick-start the economy.
Unfortunately, care for aging and retiring Americans seems not to be one of the talking points among the political candidates on the voting blocks in 2012.
