$300 million for nursing homes is a head scratcher

November 29, 2021 12:20 am

Rep. Sara Carruthers. Photo from the Ohio General Assembly website.

Late last month, Republican state Rep. Sara Carruthers of Hamilton introduced House Bill 461, a bill designed to appropriate $300 million in federal American Rescue Plan funds as a one-time payment to Ohio nursing facilities.

We all know that as people age, they need extra support. Nursing facilities are a key piece of the puzzle for providing people with support as they enter a phase of their life when independent living becomes more and more difficult.

Traditionally, Ohio has leaned heavily on nursing facilities to provide long-term care support to its aging residents. For instance, in 1993, 91% of Ohioans receiving state Medicaid dollars to pay for their long-term care services were in nursing homes.

Over time, this reliance on nursing facilities for long-term care has come under scrutiny by policymakers. There is strong evidence that nursing facilities represent diseconomies of scale, where the services required for a nursing facility end up being much more expensive on a per-patient basis than smaller, community-based models for providing long-term care services.

On top of this, many worry about the quality of care associated with use of nursing facilities. People who stay in nursing facilities usually have less control over their day-to-day activities and less friendships than people in community care settings, two key aspects of quality of life in old age.

These twin problems of costs and quality have driven policymakers to shift public dollars to supporting seniors’ ability to stay in the community rather than moving into nursing homes. By 2015, a majority of people receiving Medicaid were in community settings rather than in nursing facilities.

Nursing facilities became a flashpoint during the COVID-19 pandemic. About one in three deaths statewide have been among long-term care facility residents according to Ohio Department of Health data

Part of the reason nursing homes have been so deadly is because COVID-19 has been much more deadly for elderly Ohioans: nearly 3 in 4 COVID-19 deaths in Ohio have been among people age 70 and older. Part of the reason nursing homes have been so deadly is because of the congregate care nature of nursing facilities. Just as Ohio’s densely-populated prison settings made them early flashpoints for massive COVID outbreaks, the dense settings of nursing homes and close contact between workers and residents made them especially dangerous places for spread of the deadly disease.

The American Rescue Plan Act provides $250 million nationwide for “strike teams” to fight COVID-19 outbreaks in nursing homes. It also provides an additional $200 million nationwide for quality improvement around infection control and vaccination uptake at nursing homes.

In light of these allocations, the suggested unrestricted funding for nursing homes in House Bill 461 of $300 million, over a third of what Ohio has remaining to spend from the American Rescue Act, seems very high. Additionally, much has been made in the media about the fact that the bill does not direct funding toward specific programs to combat COVID-19 or provide additional specific health supports for residents.

In a world where we are moving more toward cheaper, higher-quality options for seniors to spend more of their lives in their homes rather than facilities, a large, lump-sum grant of unrestricted funding to facilities that do the opposite of this seems like a strange choice. Policy should be built on what provides the most benefit beneficiaries at the least cost to the public, and nursing homes have not traditionally done this.



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Rob Moore
Rob Moore

Rob Moore is the principal for Scioto Analysis, a public policy analysis firm based in Columbus. Moore has worked as an analyst in the public and nonprofit sectors and has analyzed diverse issue areas such as economic development, environment, education, and public health. He holds a Master of Public Policy from the University of California Berkeley’s Goldman School of Public Policy and a Bachelor of Arts in Philosophy from Denison University.