Nursing Care Facilities Add 2,800 Workers Amid ‘Growing But Slowing’ Labor Market

Nursing care facilities added about 2,800 jobs in November 2022, as the health care sector overall saw payrolls increase by about 45,000 workers.

Hiring in nursing care slowed down from October, when nursing homes added about 4,100 new workers. Job growth overall slowed in November, with nonfarm payrolls increasing by 263,000, compared with average growth of 282,000 over the previous three months and the year-to-date average of 392,000.

“The monthly gain paints an image of a still growing, but slowing, labor market,” Beth Mace, chief economist at the National Investment Center for Seniors Housing & Care (NIC), wrote in a Friday blog post on the latest jobs data from the Bureau of Labor Statistics (BLS).

While nursing care facilities did add workers in November, the sector is lagging other parts of the health care continuum. Home health services added 6,600 workers last month, and community care facilities for the elderly added 5,300 workers.

Overall job growth in November exceeded expectations. Economists surveyed by Dow Jones had called for non-farm payrolls to increase by about 200,000, as CNBC reported. With tight labor markets driving wage growth and fueling inflation, the Federal Reserve might be inclined to continue ratcheting up interest rates.

“It is looking for the job market to slow significantly and for the inflation rate to be tempered before it will adjust its aggressive stance on monetary policy,” Mace wrote of the Fed.

Staffing challenges weigh on occupancy

Acute staffing shortages in nursing care facilities have constrained occupancy growth in 2022. Skilled nursing occupancy declined by 40 basis points, to 78.4%, between August and September, according to NIC data released on Dec. 1.

“Some challenges do persist as staffing shortages continue to create difficulties within skilled nursing properties limiting the ability to admit new patients in some markets. However, the current occupancy trend does suggest that demand for skilled nursing properties is recovering, given the 172-basis point increase from January to September this year (2022),” wrote NIC Senior Principal Bill Kauffman.

Between September and October, skilled nursing facility occupancy increased by 40 basis points, according to a BMO Capital Markets analysis of Centers for Medicare & Medicaid Services (CMS) data.

While BMO analysts described post-acute occupancy growth as continuing at a “modest pace,” reduced census, lack of staff and other challenges are weighing on the sector.

Indeed, as the workforce crisis drags on, more nursing homes are closing their doors. At least 60 nursing facilities in Texas, representing about 2% of the Lone Star State’s total facilities, have closed in 2022, according to a report from the state’s Health and Human Services agency.

“I would say easily, the staffing and the workforce crisis that we’re dealing with … is easily the most significant challenge that I’ve seen since I’ve been involved in this profession,” Kevin Warren, president and CEO of Texas Health Care Association, recently told NBC affiliate KXAN.

In fact, staffing issues are a prime factor behind nursing bed reduction nationwide, and particularly in rural areas.

The labor market situation is fueling concerns about the Biden administration’s plan to implement federal staffing minimums for nursing homes. Industry advocates are calling for higher reimbursement rates, particularly in Medicaid, to fund additional hiring, as well as more resources to support recruitment and retention programs.