Pandemic-Driven Home Health Shifts Trigger Therapy Layoffs, Nursing Home Strategy Changes

Lawmakers and policy experts have talked about a need to shift seniors from institutional to home settings for years, and the pandemic has dramatically forced the health care delivery system to do just that: Patients en masse are no longer going to skilled nursing facilities, and instead opting for home health care. The changes may end up being the new normal, leaving SNFs with sicker and sicker patients — and also some families with more limited options.

While opinions vary on how deep and how lasting the shift to home will be over the coming years, the near-term trend has had wide-reaching effects on the post-acute and long-term care ecosystem.

When the pandemic first struck in spring 2020, full-service therapy company Infinity Rehab furloughed many employees who were stationed in skilled nursing facilities across 18 states. JoLynn Munro, division president at Infinity, said they had hopes that the onset of COVID-19 would subside quickly. But it didn’t, and the company went through three rounds of layoffs.


Infinity was able, however, to retain some physical, occupational, and speech therapists for new work contracting with home health agencies for patients that previously would have been in skilled nursing facilities.

“When people have the choice to not come to an institutional setting, they’re choosing to stay home, which has really driven up the need on the home health side, and we’ve certainly seen that in our business,” Munro told Skilled Nursing News. “What we’re hearing from potential [home health] partners who want to contract with us is that their current providers can’t meet the need, that there’s not enough staff hours available.”

Anne Tumlinson, the president and CEO of ATI Advisory, said that available data comes from early in the pandemic, but it shows that home health has increasingly taken the place of SNFs for post-acute care.


“There’s been this clinical stretching into home health that would not have occurred otherwise, because it wouldn’t have been forced,” Tumlinson told Skilled Nursing News.

In addition to patients choosing home health instead of a SNF when possible, there’s also generally fewer hospitalizations, which serves as a prime referral mechanism for facilities. That’s mainly because people are either forgoing medical care entirely, or they’re receiving telehealth services from providers like Doctor on Demand or other virtual care providers. Even before the pandemic, studies studies have shown that certain types of telehealth reduce hospital admissions, and the emergency expansion of virtual-visit coverage during COVID provided wider proof of concept.

“As we increase medical services at home, and certainly we are doing that as a result of the pandemic, the end result is that people go to inpatient hospital settings a lot less frequently,” Tumlinson said. “And the main pathway to skilled nursing facility care is through a hospital because that’s just your distribution or your sort of your, your channel.”

Munro at Infinity said the company is looking to branch into home-based therapy that patients would otherwise receive at an outpatient facility. Though she they expect the SNF business to eventually recover, the company wants to diversify and look at other lines of business.

“For people who don’t have the skills need at home, how do we provide therapy to them in a house-call type situation, where they might be finished with their SNF stay or their rehab stay, and just need additional therapy, like outpatient therapy?” Munro said. “We have optimism for the future. But we also don’t want to just be sitting here, not looking at what else we can do.”

With the changes, the big question is whether the move to home health is here to stay. Bobby Guy, a health care transaction lawyer with Polsinelli, said he thinks the change is only temporary: Ultimately, the desire for community and the acuity level of care needed will drive occupancy back up across skilled nursing facilities.

“You will always have a place for high-acuity settings, because it’s too hard to replicate that in a different setting like home health,” Guy said. “We can replace some of the services that you get at independent living and assisted living with home-based care; it’s a lot harder to replace skilled nursing and memory care in a home-based setting.”

Real estate investment firms are currently waiting for skilled nursing facilities to catch their breath, and even as home health may keep growing, he doesn’t see that growth taking away from SNFs — but rather the two potentially partnering to deliver the best level of care needed to a patient.

Tumlinson sees the future a little differently, as lawmakers and President Biden have increasingly promoted policies that would create an infrastructure — and funding — to shift seniors out of institutional care and into their home communities through both Medicare and Medicaid. The types of services that may be covered more broadly are things that facilities do already, like meals, personal care, and other around-the-clock services.

But that shift can’t and won’t happen immediately.

“This will require a very significant federal investment that will take an act of Congress to happen, and then it will take all 50 states to decide what they’re going to do,” Tumlinson said. “You’ll see some proposals for investing in better wages for the workforce and higher federal funding per state dollar for home- and community-based services in Medicaid.”

Taken altogether — lower hospital admissions, more patients choosing home health when possible and a long-term turn away from institutional settings — COVID could very well leave less room for SNFs in the market, especially as federal COVID-19-related aid ends.

But some families will still need to placed their loved ones in institutional settings, Tumlinson said.

“I don’t care how great the home health agency is. You bring your mom home from the hospital, and you have to feed her and bathe her, and you have to get up in the middle of the night when she can’t get up — all these things that facilities take care of, now it’s on the family,” Tumlinson said. “But they can’t get into a SNF, because now there’s fewer SNFs.”

“Even when there’s a zillion resources, sometimes an institutional setting is the most appropriate and the best for everybody involved,” she continued. “That’s going to be the challenge over the next 10 years.”