Nursing Home Job Losses Accelerate in Third Month After PDPM

The first two months after the implementation of a new Medicare payment model for nursing homes saw slight employment drops in the space, but the trend accelerated as the year came to a close — with the losses nearly quadrupling in December.

The national nursing home industry shed 6,700 jobs in December, according to the most recent set of employment data from the federal Bureau of Labor Statistics (BLS), as the overall nursing care facility workforce dipped below 1.6 million.

December’s decline marks a sharp increase over the 1,700 positions lost in November and 1,300 shed in October, the first month of the new Patient-Driven Payment Model (PDPM) for Medicare reimbursements.

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The overall health care industry added 28,000 jobs in December, the BLS reported, to end the year up nearly 400,000 positions; the ambulatory sector saw a gain of 23,000 jobs, while hospitals expanded their staffs by 9,000.

Nationwide, 145,000 people entered the workforce last month, with unemployment remaining stagnant at a persistently low 3.5%.

As in months past, it’s important to note that the BLS data does not specify which types of nursing home employees lost their jobs, so it’s difficult to draw a straight line between PDPM’s effects and the federal employment numbers.

Layoffs of therapists became an early story under PDPM, which shifted reimbursement incentives away from the total volume of therapy provided and toward individual resident acuity. National skilled nursing provider Genesis HealthCare (NYSE: GEN) publicly acknowledged that it had reduced its therapy workforce by just under 6% just days after PDPM took effect, and SNN has fielded multiple anecdotal reports from therapists about layoffs and hour cuts at nursing homes.

About 43% of skilled nursing operators reported having laid off therapists in an SNN poll conducted last fall, with a firm majority reporting cuts of up to 40% of overall therapy staff. An additional 53% disclosed having converted staff to PRN, or as-needed, status; those cuts were also concentrated in the up to 40% range.

That said, only 16% of respondents said they would continue to lay off employees into 2020.