Nursing home operators across Alabama are weathering a host of issues these days, from rising health care costs and worker shortages to a stubborn pandemic that won’t let go.
Some 230 nursing home facilities exist in the state, according to the Alabama Nursing Home Association. But a 2003 moratorium on the Certificate of Need Review Board and the Statewide Health Coordinating Council is preventing new nursing home beds from coming into the market, says Brandon Farmer, ANHA president and CEO.
“We’re currently over-bedded as a state, and there isn’t a need for new, additional beds,” says Farmer. “Now there have been some new homes built, but those have been replacement homes. They’re built in the same county where the original owner operated, and they’re simply replacing one home or consolidating two homes into one new home or something to that effect.”
Among the nursing homes in Alabama, the majority, between 60% and 70%, are what are called legacy or “mom and pop” operations, Farmer says.
“They’re family-owned, privately-held and multi-generational, passed from one generation to the next. And then a lot of those legacy homes, or family-owned homes, may be just a single home or two homes at best,” he says.
One legacy organization is Traylor Nursing Home Inc., in Roanoke. Mark Traylor is the company’s president. His great-grandmother, Beulah Traylor, started the business back in 1955 when she, along with her husband, began boarding transient workers.
Today, the family owns four skilled nursing home facilities. Traylor Retirement Community in Roanoke also includes some independent and assisted living units. The family company also owns Arbor Woods Health & Rehabilitation Center in Reform, Arbor Springs Health and Rehabilitation Center in Opelika and Self Skilled Nursing in Hueytown.
Traylor, who left a career as a stockbroker to join the family business, says he grew up helping out at the nursing home whenever he could.
“I’ve been janitor. I’ve been the maintenance groundskeeper. I’ve done everything but nursing,” he says.
Keeping a nursing home financially sound, however, can be a struggle.
In fact, a 2022 report on the impact of the COVID-19 pandemic on nursing homes released by the American Health Care Association and conducted by CliftonLarsonAllen LLP says that, nationwide, between 32% and 40% of nursing home patients are in facilities that are financially at risk. Some of those homes include those with five-star quality ratings, it says.
Among the reasons: increased labor costs and inflation.
The report says, “Medicare margins and (public health emergency) related funding provided help and support throughout 2020 and early 2021, but potential cuts to these programs pose risk to nursing homes as they continue to face financial challenges, such as occupancy decline, staffing shortages and increased labor costs.”
It also points out that nurses’ wages “on all levels” doubled from 2020 to 2021. Moreover, the wages of contracted and agency nurses rose two to three times.
As of May 2021, the median hourly wage for a nursing assistant in Alabama was $11.68 while licensed practical nurses and RNs made $19.29 and $29.09 per hour, respectively, according to the Bureau of Labor Statistics State Occupational Employment and Wage Estimates for Alabama. Home health aides made $10.54 per hour.
As a consequence of pay increases, competition from hospitals and private physician offices and the mounting need for nursing care workers due to the COVID-19 pandemic, hiring is difficult for nursing home operators, especially those in rural communities.
“You don’t have a large pool of people to come to work there,” Traylor says.
Across all of the Traylor nursing homes, 75% of the residents are on Medicaid, he says, and his prices are dictated by the state of Alabama and the federal Centers for Medicare & Medicaid Services. He says one of his biggest challenges is keeping up with the current pace of rising wages.
Nursing homes in Alabama did get some relief through
the Coronavirus Relief Fund for PPE, cleaning and other COVID-related costs.
“With the help we’ve had from the State of Alabama and the federal government, we’ve been fortunate enough to be able to give bonuses for people having to work on COVID units, being able to pay them more, and that’s about the only way we can stay competitive,” Traylor says.
ANHA’s Farmer says the industry is facing a “workforce pandemic.”
“That workforce pandemic is exacerbated by what we all went through clinically,” Farmer says. “That is to say there’s a limited amount of potential applicants in health care in the state of Alabama.”
Sharon Baker, vice president of business development for Turenne & Associates, says hiring difficulties existed even before COVID.
Turenne, which runs one of the largest nursing home facilities in Alabama, Capitol Hill Healthcare in Montgomery, has boosted its recruiting efforts on digital platforms to connect with millennials and Generation Z workers, she says.
“We have Facebook. We have a text to apply option. We have LinkedIn accounts. We’ve done all of those things to have a digital presence to attract additional applicants, and it has been very successful for us,” Baker says.
Besides hiring issues and rising labor costs, inflation is another problem and even skilled nursing facilities like Methodist Homes of Alabama & Northwest Florida, where the majority of patients are private payers or have long-term care insurance, are feeling the pinch.
The company has facilities ranging from independent living and assisted living to nursing care services. This includes two communities in Alabama with nursing services, Fair Haven in Birmingham and Wesley Place on Honeysuckle in Dothan.
“As it relates to the provision of Medicare covered services, clearly the costs involved in providing therapy and all other supply-driven resources are increasing in cost,” says Methodist Homes President and CEO Christopher Tomlin.
“Prescription drugs are increasing in cost, not specific to us, but just specific to the industry in general,” Tomlin says.
Paying for such nursing home and long-term care services can be daunting for many patients and their families.
The U.S. Department of Health and Human Services reports that in Alabama the monthly median cost for a semi-private room is $6,676 and $7,026 for a private room. Assisted living is $3,503 a month, on average.
Besides Medicaid, other options for paying for long-term skilled nursing care are through long-term care insurance or out-of-pocket. Former federal workers may qualify for what is called the Federal Long Term Care Insurance Program (FLTCIP).
Long-term care provides for the personal or medical needs of people unable to care for themselves for an extended period of time, says Long-termcare.gov. These services can be administered in the home or in a facility such as a nursing home.
Long-term care insurance policies typically cover nursing home care, assisted living, assisted living specialty care and adult day care.
Medicare.gov advises people who are considering buying long-term care insurance to look for insurance companies that are licensed in the state where they live. Second, they should carefully determine the kind of care services they or their loved one will need.
Third, it is also a good idea to examine different policies carefully to see which services each one will actually cover. And finally, the agency encourages people to be aware of which policies have coverage restrictions such as pre-existing conditions.
Besides workforce woes and rising costs, the COVID-19 pandemic has changed nursing home operations. Operators like Tomlin say many safety protocols put in place at the start of the pandemic have remained.
All associates who enter Methodist Homes campuses, for example, are screened by answering a series of questions about symptoms, vaccination status and any possible exposure to COVID, Tomlin says. Additionally, they undergo temperature checks.
“We also still continue to wear masks in our communities,” says Tomlin. “Sometimes surgical masks, but when community transmission rates are higher, we move to more protective masks, either a KN95 mask or an N95 mask.”
But despite all the challenges of running a nursing home today, Traylor says he loves it still.
“You get paid to do something to care for people every day, the people who need it the most,” he says. “It’s a wonderful business.”
Gail Allyn Short and Julie Bennett are freelance contributors to Business Alabama. Short is based in Birmingham and Bennett in Auburn..