The Quotes That Defined 2021 in Skilled Nursing — and Hint at What’s Ahead

This year was another rollercoaster for the skilled nursing industry as operators – and truthfully the nation alike – went from the tail end of another covid surge, to the widespread availability of vaccines, then considerable optimism and a possible light at the end of the tunnel, back to another COVID-19 surge and as I’m typing it remains to be seen how much devastation the omicron variant will do – especially to some of the most vulnerable members of our population living in nursing homes.

As my Skilled Nursing News predecessors appropriately summarized one year ago “there’s no easy way to look back” over the last year in the skilled nursing sector.

But there are some topics to reflect on, as seen in the following compiled quotes: the ongoing long-term care staffing woes that seem far from over, skilled nursing providers and their complicated relationship with value-based care and the continued busyness of the industry’s acquisition market. 

Without further ado we’ve brought to you a few of the most memorable quotes from the year, selected by SNN editor Jordyn Reiland.

‘A Circular Nightmare’

A consumer watchdog report sounded the alarm bells early in the year, warning that the industry had seen far from the worst of the long-term care crisis.

A report from the U.S. PIRG Education Fund, an arm of the nationwide U.S. Public Interest Research Group, found that the total proportion of nursing homes reporting shortages in at least one staff category rose from 19.9% in May to 22.8% in December.

Understaffing of aides, including certified nursing assistants, was the most widely seen problem in the report, with 20.6% of facilities reporting shortages in December compared to a 17.4% rate in May.

“Not only are the shortages a direct result of the COVID-19 pandemic, experts say, but in a circular nightmare, the staff shortages also fueled more COVID outbreaks in nursing homes among residents and staff,” PIRG noted in its report.

Harvard researcher Michael Barnett told U.S. PIRG at the time that “the situation may erupt before the pandemic subsides.”

“It’s a recipe for a collapse in the workforce,” he told the group.

Staffing has remained the top concern for nursing homes throughout 2021, and that likely won’t change in 2022 – particularly as the Centers for Medicare & Medicaid Services (CMS) vaccine mandate plays out in the courts.

Software firm OnShift in its third annual Workforce 360 Survey reported that of more than 2,050 industry professionals, 70% believe difficulties managing labor costs will remain the same or worsen over the next three years.

Nursing Homes’ Financial, Operational Recovery ‘Completely Tied to Visitation’

With vaccines fully underway for both nursing home residents and staff, rapid improvements on the clinical side could be seen in February compared to much of the year prior.

However when it came to the financial outlook for skilled nursing facilities, especially when looking at occupancy levels following the third wave of COVID-19 that hit in November and December 2020, that recovery looked much murkier.

In some parts of the country occupancy rates were as low as 55.7%, according to an analysis earlier in the year from the professional services firm CliftonLarsonAllen (CLA).

Mark Parkinson, president and CEO of the American Health Care Association (AHCA), said during a virtual discussion at Skilled Nursing News’ virtual Payments, Policy, and Capital Summit that the industry’s recovery was entirely connected to visitation.

“I think that recovery of the sector is completely tied to visitation,” Parkinson said in February. “People do not want to have their loved ones admitted into a facility when they can’t visit them, and nobody wants to move to a facility when they can’t have visitors.”

The Centers for Medicare & Medicaid Services (CMS) in November issued guidance allowing visitation for “all residents at all times.”

As the omicron variant has rapidly become the dominant strain of COVID-19, a group of aging services organizations sent a letter to CMS Administrator Chiquita Brooks-LaSure last week suggesting the agency allow facilities the flexibility to place temporary visitation restrictions to protect residents and adhere to infection prevention protocols.

Buyers Have ‘Voracious Appetite’ for Skilled Nursing Facilities

Despite continued staffing shortages and slow occupancy recovery, the skilled nursing acquisition market has not slowed.

Many in the industry, including Walker & Dunlop Managing Directors Josh Jandris and Mark Myers, have pointed to the abundance of federal aid the nursing home industry has received as one reason why the market has remained active.

“The buying community for skilled has a healthy appetite, I daresay maybe even voracious in some cases, depending on the types of facilities in the marketplaces,” Walker & Dunlop real estate broker Mark Myers told SNN.

To highlight just a few of the transactions that occurred in 2021: Diversicare Healthcare Services was acquired by DAC Acquisition LLC in a deal that would give Diversicare’s stockholders a cash amount equal to $10.10 per share of its common stock; Providence Group acquired California’s second-largest skilled nursing facility operator – a deal that included 58 total facilities; Welltower Inc. largely ended its relationship with Genesis HealthCare; and DigitalBridge sold its wellness infrastructure business, which included 83 SNFs and other health care assets, for $3.2 billion.

I-SNPs Remain ‘Only Model’ for Nursing Homes to Enter Value-Based Care

As operators look to find ways to build a foundation for the future post-pandemic, the institutional special needs plan (I-SNP) could be an important tool in the skilled nursing industry’s toolbox.

The I-SNP is a type of Medicare Advantage (MA) plan that restricts enrollment to people eligible for MA who, for 90 days or more, need or are expected to need the services of a SNF or another institution.

“If we want to see skilled nursing facilities move towards value-based payment and taking risks, this is really the only model out there for them,” Jill Sumner, AHCA’s vice president of population health management, told SNN.

For providers who moved into the I-SNP model before the pandemic, the clinical benefits to residents covered by the MA plan were significant.

According to J. Mark Traylor, president of Traylor Porter Healthcare and a member of Simpra Advantage’s board of directors, having nurse practitioners available to care for all patients, regardless of whether they were Simpra members, “was a lifesaver.”

‘Hundreds of Thousands of Nursing Home Staff Are Going to Leave’ Without Reasonable Vaccine Mandate Implementation

The Biden administration’s early announcements regarding a vaccine mandate only included nursing home staff, leaving many in the industry seriously concerned the government was singling them out and that doing so would only contribute to an already taxing staffing situation.

“If the vaccine mandate is implemented poorly, hundreds of thousands of nursing home staff are going to leave. If it’s implemented thoughtfully, we can avoid that. And, I think, still achieve the objectives that the administration wants to achieve,” AHCA’s Mark Parkinson said in an interview with SNN on Aug. 30.

As of Dec. 5 CMS reported that 77.3% of staff and 87% of residents were fully vaccinated. That is up from 60% of staff per facility back in August when the mandate was first announced.

CMS eventually issued guidance on the mandate that included all health care workers, requiring operators to get a plan in place to vaccinate staff and have them all fully vaccinated by Jan. 4.

That mandate remains tied up in the courts as I write this, and leaves many operators’ hands tied as to what to do next. It seems very likely the U.S. Supreme Court will take up the issue and make the final call.

‘We All Have to Get Comfortable With Where We Add Value’

Just a few months after Angela Brandt took on her role as ProMedica’s Senior Care President she spoke with SNN to discuss her goals in the new role, and specifically acknowledged the need for those in and outside of the industry to recognize the role long-term care facilities can play in value-based payment.

“We all have to get comfortable with where we add value for the health care continuum for all stakeholders,” Brandt told Skilled Nursing News.

Medicare Advantage enrollment represented 46% of all 57.7 million eligible Medicare beneficiaries, according to a July report released by the Medicare Payment Advisory Commission (MedPAC).

“You have to think about how you add value as a skilled nursing facility to help a hospital have the appropriate length of stay for the acuity of their patients. How do you help the physician work through a bundle of care where skilled is a portion of that bundle where we historically have not always been. So skilled nursing can really help in those kind of value based programs, specifically Medicare Advantage,” she explained.

The reason why SNFs may not have had a seat at the table previously “was both a clinical and a financial conversation where the shared savings was not distributed to skilled nursing facilities,” she added.

Genesis is ‘Presumably Taking a Page Out of Ensign Group’s Playbook’

Genesis HealthCare has remained in the headlines of SNN throughout 2021 – from its announcement that the operator would delist from the New York Stock Exchange to its most recent executive shakeup and move to shift toward a market-focused model.

Some in the industry can’t help but wonder if the post-acute care company is trying to follow in the footsteps of another major player in the space.

Stifel analysts in a note issued in November said the move was “presumably taking a page out of [The] Ensign Group’s playbook.”

Sabra Health Care REIT Chief Investment Officer Talya Nevo-Hacohen told SNN that Ensign has set an example that some skilled nursing operators have attempted to replicate.

“Clearly Ensign has become somewhat of a role model for a lot of companies in the way they’ve been able to both scale up their operating model and continue to be very successful,” Nevo-Hacohen said.

“They’re unusual in that they’re a skilled nursing operator that has returned all of their PRF, so that’s quite remarkable and really sets them apart,” she added.

It remains to be seen whether Genesis’ efforts will pay off, but one thing we’re certain of is we’ll be here to report on what unfolds.