In the beginning...
From time-to-time, while researching topics for these blog posts, I encounter articles which jumble together all manner of facts and figures and end up delivering anything but a meaningful conclusion. Although I normally dismiss such flotsam, this past week the online newsletter The Fiscal Times published, "The Coming Nursing Home Shortage" a confusing article asserting that reduced construction of nursing homes and the arrival of aging baby boomers will (inevitably) result in a shortage of capacity in nursing homes. Although I believe the more relevant question is whether the entire elder care services infrastructure (i.e. home and community based services, assisted living and skilled nursing facilities) will be sufficiently robust to accommodate future needs, if the highly regarded Kaiser Health News found the article interesting enough to reprint (which they did), then I think it is worth my trouble to explore the subject a bit further.
Although article was national in scope, since Illinois is one of the 10 states (ranked seventh) which together account for 54% of the population over the age of 65, it seems reasonable to rely on Illinois trends for purposes of evaluating the article's claim.
Who decides where/when SNF's are to be built in Illinois?
In Illinois, to build a nursing home (i.e. SNF) one must first obtain a certificate of need (CON) from the Illinois Health Facilities and Services Review Board. The Review Board is comprised of nine members, appointed by the Governor and confirmed by the Senate and its job is to assure that a proposed project is needed and financially and economically feasible. In general, the CON process allows the state to limit its overall health and medical expenditures and about 36 states still have CON laws. Unfortunately, the article failed to address whether applications for CONs are trending up, down or constant. I think that is strike one against the theory of an impending shortage.
In the 2011 annual Illinois Long-Term Care Services Inventory, the Review Board projected that 105, 398 SNF beds will be needed to meet demand in 2018: an increase of approximately 2,500 beds (or 3%). However, this does not take into account that average nursing home occupancy in Illinois is currently 88%, which means there are currently over 10,000 empty SNF beds in the state. From 1995 to 2002, the number of nursing home beds in Illinois increased 2% (here), and in 2002 Illinois ranked 24th in the number of nursing home beds (100.3) per 10,000 population. So far, it doesn't appear that much of shortage will occur in the near future. I'll consider this strike two against the article's conclusion.
More reasons on why worries of future insufficient nursing home capacity are overblown in Part II.
What do you think?
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