Nursing Home Leaders Aim to Harness AI, Data to Beat Staffing and Payment Challenges in 2024

For 2024, the nursing home industry’s focus must be on strategies that prioritize data accuracy, effective leadership, and innovative solutions as facilities evolve to meet changing demands and challenges from staffing.

This is the view expressed during a webinar held Thursday based on a survey of our readers on their outlook for 2024 titled, “Skilled Nursing 2024 Executive Outlook: Staffing, Reimbursement, M&A in Turbulent Times.”

Panelists included Steve Nee, CEO of Diversicare Healthcare Services, who said that staffing remained the main obstacle for providers and must be countered with attention to staff’s well-being. Other panelists sharing their perspectives on the critical issues confronting skilled nursing facilities (SNFs) included Jen Gross, Post-Acute Informatics Specialist with Net Health, and Peggy Connorton, Associate Vice President of Healthcare Regulation at Covenant Retirement Communities.


Panelists said operators must remain proactive, and resilient in ensuring the highest quality of care, regulatory compliance, and financial viability. The journey ahead demands a strategic and collaborative approach to address challenges, particularly around staffing, they said.

These experts emphasized data accuracy, data sharing and data transparency as key drivers of quality along with staffing solutions as major areas to focus upon for improving care in 2024.

In late 2023, Skilled Nursing News conducted a survey of its readers in collaboration with Net Health on the outlook for the sector. Out of a total of 123 respondents from across the sector – with a majority being C-suite executives – 67% said that they did not expect the staffing climate to improve in 2024.


Moreover, about 50% said that recruitment and retention will be the biggest challenge for skilled nursing in 2024.

Meanwhile, technology adoption was cited as a way to help drive quality of care, especially through predictive analytics, which almost 50% of respondents identified as the most effective technology helping organizations prepare for the future.

However, more than half of survey respondents also said cost was the biggest barrier to new technology adoption.

Full survey results are forthcoming soon.

This is the first in a series of two articles based on the SNN Outlook 2024 survey.

Staffing challenges

Having a dedicated and skilled workforce is pivotal for successful operations, Nee said, emphasizing the importance of an atmosphere that balances work and life.

“Staffing remains our number one challenge going into the new year with labor and other operating costs on the rise as a close second,” he said. “I believe that in most markets, if you have the staff, specifically great nurses and CNAs, you should be able to fill your beds.”

Diversicare provides post-acute care in 45 centers across five states, primarily in the Southeast and Midwest.

Nee also touched upon the recent uptick in occupancy rates but said staffing challenges continued to dampen this positive trend. He ranked recruitment and retention as the number one challenge, closely followed by rising labor and operating costs, as well as regulatory compliance – which includes the survey process.

Meanwhile, Connorton echoed Nee’s sentiments and highlighted the significant backlog in the survey process. She shed light on the impact this backlog has had on regulatory compliance, including on the crucial 5-Star ratings.

“The survey process being very behind [means] some communities haven’t had surveys since 2019,” Connorton said. “I hear that in many states across the nation, there’s a lack of surveyors. And while that impacts the regulatory process, it also impacts our 5-Star ratings.”

Covenant operates several SNFs and assisted living facilities (ALFs) in 19 communities across ten states.

Connorton said forthcoming challenges, such as increased scrutiny in Payroll Based Journal (PBJ) audits, Medicare probe audits, and new emergency preparedness regulations create a multifaceted regulatory landscape for operators to navigate.

“So there’s just a lot that our communities and providers still need to plan for,” she said. “And they just need to be ready on an everyday basis and what’s happening with forthcoming regulatory and compliance issues.”

Data on the industry

Gross emphasized that data, both quantitative and anecdotal, supported the prevailing challenges in staffing. Net Health is a health care software provider.

“We are definitely seeing the same challenges particularly with staffing and staff turnover,” Gross said. “And we’re seeing this both in black and white from the data, from 5-Star rankings and from various state staffing metrics, but also anecdotally, of course from our clients in the amount of turnover that they’re having with the staff who interface directly with us via their MDS submissions.”

Gross also underlined ongoing staffing challenges, suggesting data-driven strategies to use the thinly stretched staff more efficiently.

“So it is really key for the providers to ensure that the staff are being used appropriately for the acuity in the high risk areas in their facilities,” she said.

Certain regulatory challenges were particularly difficult to implement, Gross said, characterizing the October 2023 Minimum Data Set (MDS) changes as a “sledgehammer” on the industry. MDS Coordinators really struggled during the transition period and nursing homes faced ripple effects on quality measures and 5-Star ratings, she said.

Gross underscored the need for providers to proactively manage their internal data, given the uncertainties surrounding data reporting from CMS.

“So a lot of this data that providers and their communities tend to rely on, they get directly from CMS,” she said, adding that there the lag in the official data’s release causes problems. “They’re going to be waiting a long time to get results from all of these changes. So providers really need to have a good handle on their own data internally.”

Strategies for staffing issues

Nee presented strategies to combat workforce issues. He stressed the importance of genuine care for staff, investing in their development, and fostering a culture of excellence. He urged operators to be flexible in areas such as scheduling and wages while showing grace in disciplinary actions.

Additionally, he recommended getting creative with solutions, including partnering with local educational institutions for CNA classes and exploring artificial intelligence (AI) tools for operational efficiency.

“Do internal CNA classes or partner with local LPN schools, so you get a lion’s share of those graduates,” Nee advised. “It’s always wonderful to partner with placement organizations that assist with identifying and placing foreign trained nurses from overseas or several companies that are specializing in this right now,” he said.

Nee also recommended using AI to find ways to augment staff’s jobs to make them easier and to increase efficiencies and optimize workflows. 

Connorton expanded on Nee’s strategies by delving into the crucial aspect of leadership development.

She emphasized the need for comprehensive leadership training, especially for those in middle-level positions as well as setting clear expectations for new hires and flexibility in roles to accommodate staff needs.

“[In the industry], we promote into positions and we sometimes don’t do the leadership training,” she said. “[At Covenant], we invest a lot in leadership training and middle-level leaders going through training and understanding what it takes to be a leader in an organization.”

Value-Based care and quality improvement

The panelists addressed the impact of value-based care (VBC) on skilled nursing facilities.

Connorton shared that the impact from VBC on Covenant Retirement Communities has been minimal thus far. However, she underscored the critical role of quality metrics in driving reimbursement, positioning quality improvement as a cornerstone for success.

“To look at this from a bigger lens is to see the impact on reimbursement, and as people start to focus on measures that will impact reimbursement,” she said. “So everything that we do every day from a quality perspective, is really impacting the bottom line.”

She said that keeping an open line of communication with health care partners also helps.

“We have been a valuable resource with our partners, with our hospital partners and ACO partners, looking at what they need from us, having very good dialogue back and forth with them as well being transparent when negative things happen in our buildings and sharing the celebrations when positive things happen as well,” she said.

Gross also emphasized the significance of accurate data in achieving positive outcomes in a value-based care framework.

“The foundation of quality improvement is working with objective data,” she said. “And quality improvement relies on up-to-date facility level quality measures, with transparency down to the resident level details.”

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