PRF Release Welcomed as Financial Strain of Staffing Crisis Worsens

Though fears of a massive staff exodus following the Biden’s administration vaccination mandate have likely been tempered with the recent inclusion of all health care providers, recruitment for nursing homes remains a challenge as the need for direct care workers in long-term care settings will nearly double in the next decade.

“When I worked in Illinois, I was in Chicago for 11 years, I had people coming in filling out applications every five minutes,” Marc Halpert, chief operating officer at Monarch Healthcare Management, told Skilled Nursing News. “I remember my lobby was full of people all the time filling out applications. There’s weeks that I go by with zero applications in Minnesota.”

While increasing wages, offering bonuses, and paying staff overtime have been some ways that operators have tried to improve staffing levels, these strategies raise new concerns about operations hitting a breaking point and no longer being sustainable.

All 70 small, medium and large senior housing and skilled nursing executives said they were currently paying staff overtime according to survey data from July 12 to Aug. 8 released by the National Investment Center for Seniors Housing Care last month.

If wages keep going up and incentives such as staff overtime and sign-on bonuses offered, the margin to make a profit may not be attainable for many operations.

“When I started in 2005 in the industry, I was always told to pay less than 5% overtime,” Halpert explained. “Like any industry, in health care, you’re always going to have some overtime but under 5% that doesn’t really cost you much.”

Then about five to 10 years ago, 10% staff overtime was the new bar, he said.

“As long as you were under 10%, under 5% facilities did great, but under 10% was still manageable. Now I’m hearing it’s under 15%,” Halpert said. “The truth is that paying overtime is not my concern, I would be glad to give my employees overtime. The problem is the burnout.”

With 32 skilled nursing facilities throughout the state of Minnesota, this is the first time Halpert’s been in the industry where he’s dealt with the same issues for 18 months and “it doesn’t seem to be getting any better.”

He said that Monarch is “the highest paying operator in Minnesota,”, offering up to $25,000 sign-on bonuses over the last year and paying CNAs up to $20 an hour and nurses up to $40 an hour.

With no end in sight, Halpert has never seen a staffing crisis this bad.

He said he hopes that none of Monarch’s facilities have to close down due to not being able to staff the buildings, though it is a reality that many operators now face.

“We actually have bought a couple of facilities in rural areas and combined them already. We have some other facilities that are definitely struggling and hurting we’re trying to hold on. I’m still hopeful that things are able to recover,” Halpert said.

Servant Living Center, a nursing home in Medford, Okla., a town with a population of 1,000 people, closed its doors this year after opening in 1965, due to an ability to maintain an ample workforce, Scott Pilgrim, owner and CEO of the Diakonos Group, wrote in an op-ed published in the Tulsa World.

Island Nursing Home and Care Center, in Deer Isle, Maine, announced in late August that it would be closing in the fall. It will join Country Manor in Coopers Mills, located in Whitefield, Maine, and the Somerset Rehabilitation and Living Center in Bingham, Maine –, both expected to close by the end of the next month, according to NewsCenter Maine, an NBC-affiliate.

“The national health care staffing crisis has reached a critical point. Facilities like ours can no longer find qualified staff,” Island Nursing Home posted onto Facebook on Aug. 30. “There are simply not enough qualified staff available in a rapidly declining healthcare workforce … We will no longer be able to meet our minimum staffing requirement.”

While Monarch has not had to close down any facilities, admission caps have been implemented.

“We just don’t have the staff to take care of people and my job is to keep our residents safe, so if we don’t have enough staff we’d have to cap it,” Halpert said.

After 18 months of SNFs slowly building back patients and hospital referrals lost during COVID, it is a tough reality for operators to face.

While Minnesota-based Health Dimensions Group hasn’t had to cap admissions, it is something that’s on CEO Erin Shvetzoff Hennessey’s mind.

With $25.5 billion recently made available for health care providers, announced last Friday, including $17 billion from the Provider Relief Fund that will be based on lost revenues and expenditures between July 1, 2020 and March 31, some much needed relief is heading operators’ way.  

“Financially in skilled nursing, our rates go up, in many cases based on cost, and we’re putting out the cash for increased wages and bonuses and agency before we see our reimbursements go up,” she said. “That puts a lot of pressure on cash because there’s a delay. At this point I’m more worried about staffing than COVID.”

The release of the funds was cheered by trade associations and operators across the industry, but Michelle Kozloski, senior vice president of human resources for Covenant Living Communities and Services, said a more aggressive approach is needed to recruit and retain qualified staff to the industry.

“I think a strategy for senior living has been to wait for people to come to us, we post a position and wait for people to apply, we can’t do that anymore,” she said. “Because there’s no people to apply. You’ve got to create your own pool for the long-term.”

While Covenant has implemented common recruiting and talent acquisition strategies like salary bumps and hiring days, Kozloski worries how long it can last.

“I don’t feel these kinds of strategies are sustainable,” she said. “You can’t keep throwing money at people.”