Dec 21, 2019

Preserving What’s Essential

Readers of this Blog know that the Rockefeller Institute, the research arm of the SUNY system ( is a website that I visit frequently. A recent visit led me to an article about manufacturing in NYS (“Twenty-First Century Manufacturing: A Foundation for NY’s Economy,” 9/2010). The article described how manufacturing in NY employs 450,000 people (down from 2.0 million in 1950) and explains the evolution of manufacturing in NY along with current trends. It also describes the efforts that the State is taking to attract new industries to the State and cautions that the State is not doing enough to support the existing industries and manufacturers. It seems to me that something similar can be said about the State and Nursing Homes.

Nursing homes generate significant economic activity. In fact according the Healthcare Finance News (2/23/2011), NYS state ranks first in nursing-home generated economic activity and employment. The data is striking: over 197,000 jobs generating over $21 billion in annual economic activity. Seems like a good deal; NYS spend roughly $6.0 billion in Medicaid and gets $21 billion in economic activity. Like manufacturing, nursing homes are downsizing and/or closing as a result of reduced reimbursement. Additionally the economic data alone are not able to quantify the full public benefit that comes from caring for senior and chronically ill individuals who are not able to remain independent in the community. Like manufacturing, NYS is investing time and resources to create new forms of long term care, while not doing enough to support existing providers. Perhaps the State needs to show caution and support for existing nursing homes.

The current Medicaid Budget and the new cap on Medicaid spending are taking an enormous toll on nursing home providers. According to the Citizens Budget Committee (10/14/11) sixty-six percent (66%) of the savings implemented in the current fiscal year have come from reductions in Medicaid reimbursement to providers. In the next fiscal year, it is anticipated that sixty-nine percent (69%) of the savings will come from additional Medicaid reimbursement reductions. Hospitals, clinics and other providers can increase volume and diversify its payers, vying for more private insurance and managed care payers. Nursing homes are not able to do the same. Thus the current political and economic posture places a significant portion of the nursing home industry at risk.

Losing nursing homes is not good public policy, particularly given the future needs that the baby boomers will require. Nursing home substitutes will have a role in caring for these individuals, but we in the industry know that they do not replace nursing homes and the need for care will be a significant problem if facilities close. There will be an economic void that will also have a deep impact on communities and the entire State. Innovation will be required; nursing homes will need to recreate themselves to survive this difficult period. Nursing homes don’t have to face this challenge alone; a strategic partner is available!

Caretech has been a strategic partner to nursing homes for almost thirty years. During this period, Caretech has developed an array of solutions that help nursing homes lower costs, and become more efficient. Caretech continues to innovate and it continues to grow, serving close to 14,000 nursing home beds. The need for innovation, creativity and solutions will continue until the powers that be realize how essential our industry is for economic and public policy reasons. Caretech can help your facility meet the challenges that are coming our way; don’t weather these alone; why we wait for the state to realize how important we are!.