Demand Drops for Nursing Homes in Massachusetts

By Harry S. Margolis

According to the Massachusetts Division of Medical Assistance (MassHealth), nursing home usage in the Commonwealth has dropped 19% since 1995.  At the same time, the number of nursing home dropped from 545 to 410. 

While the number of nursing home beds dropped, the remaining nursing homes are having more trouble filling their beds with the average occupancy rate falling from 95% in 1995 to 90% in 2011.

While MassHealth continues to be a budget-buster, this trend has saved Massacusetts a considerable amount money with the number of covered days dropping from 37,000 in 1995 to 29,000 in 2011, a fall of 22%. 

Interestingly, there has been an increase in Medicare coverage from about 5,000 patient days in 1995 to 6,500 in 2011.  This reflects another significant change in nursing home use, that more if it is for short-term post-hospital rehabilitation, which unlike long-term care is covered by Medicare.

The Massachusetts Department of Public Health predicts that rate of nursing home use by seniors will continue to drop, but about 20% between 2008 and 2016, as alternatives such as assisted living and home care continue to take hold.

These trends are mostly good news for seniors, most of whom would prefer care in places other than nursing homes, and for the state government which helps finance most care.  They can, however, make it difficult for nursing homes which struggle to provide excellent care despite lower revenue due to more empty beds, lower MassHealth reimbursement rates as compared to costs, and fewer private-pay patients who help subsidize the MassHealth-covered residents. 

It is not unusual for seniors and their families to delay nursing home entrance for as long as possible, paying out of pocket for home care and assisted living care, finally moving to a nursing home when they can no longer afford the alternatives and can rely on MassHealth coverage of their nursing home care.

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