First toilet paper. Then baby formula. Could a nursing home shortage be next in Pennsylvania?

As Pennsylvania’s population grays, nursing home owners should be rubbing their hands together in anticipation of an increasing stream of business.

They’re not.

Many are worried they may have to close.

The industry is in a crisis. That’s troublesome for seniors. Pennsylvanians could need more nursing home in care in the future. But if nothing changes, finding a bed could be challenging.

Some homes are losing money on many residents every day. They are struggling to find enough nurses and other health care professionals. As a result, they aren’t filling all of their beds.

Fifty-seven percent of nursing homes in Pennsylvania are projected to have an operating loss of at least 7.5% this year, according to a report last month by CliftonLarsonAllen, a national accounting firm. Another 17% of homes are projected to have a loss between 1.7% and 7.5%.

Nursing home operators in western Pennsylvania fear as many as one-third to one-half of the state’s roughly 680 nursing homes could close if help isn’t provided, the Pittsburgh Post-Gazette reported.

Fourteen homes have shut down in Pennsylvania since the beginning of 2020, including Blough Healthcare Center in Bethlehem. Others plan to close, including Philadelphia’s city-owned home, which is projected to lose $5.7 million for the fiscal year that ends June 30, The Philadelphia Inquirer reported last week.

That’s all sobering. But Pennsylvania’s seniors, and people with disabilities who need a nursing home, aren’t doomed yet.

Elected officials can help the industry. Let’s hope they have the brains and the courage to do it.

In the next week or so, lawmakers and Gov. Tom Wolf will finish negotiating a budget for the next fiscal year. They should raise the state’s paltry Medicaid reimbursement rate for nursing homes.

Roughly 65% of the state’s nursing home residents, about 45,000 people, have their care paid for by Medicaid.

Medicaid pays nursing homes about $200 a day per resident. That’s about $50 less than what the care costs, on average, according to the Pennsylvania Health Care Association, a trade group that represents nursing homes, personal care homes and assisted living facilities.

That means nursing homes lose a cumulative $820 million annually on those residents.

This problem has been festering for a long time. The state hasn’t increased its reimbursement rate since 2014, and costs of care have risen.

Most surrounding states pay a higher rate, ranging from $226 per day in Ohio to $293 per day in Maryland.

The pandemic exacerbated the situation in Pennsylvania, and it’s now on the verge of boiling over.

“I don’t think it’s hyperbole to say that this state budget could dictate the future of long-term care in Pennsylvania,” said Zach Shamberg, president and CEO of the Pennsylvania Health Care Association.

“This has to be the year,” he told me Tuesday. “Otherwise, we could see a collapse of the long-term care system in Pennsylvania.”

Some nursing homes are closing floors or wings and turning away as many as 20 residents a month because of the lack of staffing and untenable Medicaid rate, Shamberg said.

Other homes are being sold or reorganized, which can impact the continuity of care to residents during the transition to new management and staff.

Shamberg’s association and other industry advocates are asking for about $294 million through a higher Medicaid reimbursement rate. He told me he’s optimistic that lawmakers and the Wolf administration recognize the industry needs help.

The industry also is asking the state to spend some of its $2 billion in federal COVID-19 relief funds on nursing homes. That would bridge the gap between when any Medicaid reimbursement rate increase would take effect in January.

The state provided one-time funding in the past two years to help with pandemic costs, but it’s critical to have an ongoing increase in revenue for “sustainability and predictability,” Shamberg said.

State officials also can help by backing off plans to require nursing homes to provide additional hours of care to residents.

I suggested that last year immediately after those new regulations were proposed. This just isn’t the time.

While more care would be welcome, it’s unlikely nursing homes would be able to find enough nurses and other professionals.

Even if they could, the cost to hire them could worsen the crisis.

Wolf has proposed increasing Medicaid payments by $91 million annually to account for additional costs. The cost to provide additional care to Medicaid residents is expected to be $435 million annually, according to a study commissioned last month by the Pennsylvania Health Care Association.

Those regulations remain in the approval process, with the Wolf administration intending to implement them next summer. Shamberg said negotiations are occurring and he is hopeful the administration could reduce the amount of care hours it initially proposed.

I hope lawmakers take this problem seriously as they wrap up the budget. I also hope they remember that seniors vote in great numbers.

Morning Call columnist Paul Muschick can be reached at 610-820-6582 or paul.muschick@mcall.com

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