‘A Maze With Mostly Dead Ends:’ Why Nursing Homes Will Be Major Talking Point in Upcoming Election Cycles

The nursing home industry, along with other settings in long-term care, is expected to be a central campaign focus for presidential candidates in future elections.

One reason is growth of the older population just as the Medicare trust fund is projected to show a deficit starting around 2026 when the oldest of baby boomers will turn 80. In the 2028 election cycle, social security will be only a few years away from running a deficit. This is complicated by the fact that millennials and Gen Xers – who will be taking care of their parents’ long-term care needs – will be heavily indebted, experts said.

Moreover, the issue of long-term care access will gain national traction when it’s not seen as a low income issue, but rather a middle class issue, they said.

“I think the questions have to be not systemic, but personal. They have to be about my mom, and my dad, or about what is going to happen to me,” said Bob Kramer, founder and fellow at Nexus Insights, and co-founder, former CEO and now a strategic advisor at the National Investment Center for Senior Housing and Care (NIC). “For boomers, for a long time, it was about their parents. Now, it’s going to be increasingly about themselves.”

Rising personal debt is also an issue that will impact long-term care, and is, therefore, likely to push long-term care to center stage in upcoming election cycles.

Kramer calls the caretakers of boomers the “triple mortgage generation,” made up of millennials and Gen Xers, where their first mortgage is their student loans, their second mortgage is their home, and the third is how they’re going to cover long-term care for their parents.

“I call them the first triple mortgage generation, because this is huge. It’s a huge impact on them. They have a vested interest in this issue, not just for themselves when they’re 85,” he said.

Meanwhile, nursing homes have been starved for funding for years, and by 2028, the need for such care will have been escalating with no solutions, he said.

“Their lifetime savings, their social security, is not going to be adequate to address their long term care needs,” Kramer said.

Providers saw a little bit of this focus with President Biden’s State of the Union address in 2022, and the launching of the administration’s reform initiative – most notably with the federal minimum staffing proposal and closer scrutiny of private equity, said Kramer.

Kramer shared his views in VIUM Capital’s latest podcast to discuss skilled nursing’s place in future election cycles, along with other major topics like Medicare Advantage and the federal minimum staffing proposal. He was joined by VIUM Capital’s Scott Tittle.

Biden’s reforms provide glimpse into 2028 discussion

Candidates prior to Biden largely ducked the issue of long-term care, said Tittle, managing director at VIUM Capital, despite the issue having an incredibly large impact on the majority of constituents in the country. 

“My sense is [Biden’s] State of the Union address was a great case of politics that got ahead of policy,” said Kramer. “CMS was doing a careful study of the issue, trying to figure out where to come out on it. All of a sudden, the White House rushed out politically and said, ‘We’re going to have a staffing mandate.’ CMS was caught unprepared.”

CMS was also caught embarrassed, he said, because its study had said the staffing mandate could not improve the quality of care problems and could actually have unintended consequences.

Why isn’t this a main issue in the 2024 campaign? Well, with President Joe Biden facing off against former President Donald Trump yet again, it’s more of a campaign of personalities rather than national issues, Kramer said.

“It was true in [2016]. But it was even more true in [2020]. And it will be absolutely the case in 2024. This is about personalities. It’s not about issues. And those that are trying to make it about issues are just drowned out,” said Kramer.

And, while long-term care issues have become more and more urgent, they haven’t hit a boiling point yet for the majority of constituents. For presidential candidates, it’s also a broken system in need of a complete overhaul.

“It’s not that it’s so big, it’s so broken,” said Kramer. “When people encounter long-term care in America, what they find is a maze with mostly dead ends … we’re in fundamental denial as to the investment we have to make.”

As a former state legislator back in the eighties, Kramer realized there was never going to be enough public sector dollars to totally address the long-term care, post-acute care challenge in the country.

“You are going to have to have meaningful private sector engagement. Now, we demonize the private sector engagement on the one hand, but denounce anybody that talks about raising taxes to address the issue on the other hand,” said Kramer. “That leaves you at a zero sum game of nothing.”

Moreover, if the country is going to move toward value-based care, move toward better outcomes at less cost, real time accessible data will be crucial. It’s a point similar to one brought up recently by leaders at Zimmet Healthcare Services Group.

And usually, innovation in skilled nursing is started by the private sector and then public entities pick ideas up and do pilots to pioneer such innovative projects, he said.

“We desperately need innovation, we need more efficiency of staff. We need healthcare that is predictive, participatory and preventative, not just reactive, curative and passive. You can’t go there without innovation and without data,” said Kramer.