You’re Putting Grandma…Where?!

How Innovation is Improving Nursing Homes Across the Country

November 27, 2018

Most families have had the heart-wrenching experience of deciding “what to do” with a relative who is no longer capable of taking care of themselves. The last resort is a facility known as a nursing home, in which around-the-clock care is given to elderly and/or disabled individuals. And as patients and visitors alike can attest, these end-of-life health care centers aren’t exactly Disney World for the grey-haired. Documented mistreatment from staff, as well as preventable injuries, pit employees, patients’ families, and governments in seemingly endless conflict. Fortunately, dramatic turnarounds in quality can and do happen, and innovative homes promise the aged and disabled a better quality of life. State government policymakers must ensure that nursing homes and their skilled staff have the flexibility needed to create fulfilling, enjoyable environments for their guests.

In his book Being Mortal, famed surgeon, researcher, and author Dr. Atul Gawande discusses the travesty that awaits many seniors and their families researching nursing home options. One elderly woman interviewed for the book describes finding a nursing home that was “one of the nicer ones” because it was clean, but regardless, “you had the people in their wheelchairs all slumped over and lined up in the corridors. It was horrible.” But “experimental” institutions that allowed patients more autonomy and allowed for events such as animal visitation report happier, healthier residents, with (in some cases) far lower bills than Medicaid (read: taxpayers) is currently on the hook for.

Writing in The Atlantic, journalist Alana Semuels describes the “Green House Project,” a network of small nursing homes (each with 10 to 12 beds), in which each resident gets his/her own bedroom and bathroom. Instead of strictly controlling residents’ schedules, skilled nurses provide a more supportive role to tenants, helping them plan their own activities and giving them input into weekly menus. Amenities such as nail salons, delis, and coffee shops in Green House common areas allow residents traditional comforts, under the watchful eye of skilled staff. Even if these add-ons aren’t efficient in the narrow sense, these adaptations go hand-in-hand with reduced hospitalization rates for residents, fewer problems overall, and correspondingly lower government spending.

In 2016, researchers from Harvard Medical School found that taking into account the characteristics of nursing home residents, these institutions lead to nearly $8,000 less in Medicare expenditures per resident per year (a roughly 30 percent reduction). There’s plenty of disagreement over the exact bottom-line savings (some studies find only around $1,200 in annual savings), but all studies agree that these innovative homes do save taxpayer funds and improve seniors’ lives through more options and autonomy. The founders of the Project seem to agree, and Green House beds total nearly 2,000 nationwide, spread out in more than half of all states.

Unfortunately, regulators at all levels of government have a way of keeping progress at bay. For starters, there’s a host of rules across the country restricting new nursing home beds. States such as Utah, South Dakota, and Massachusetts maintain strict limits on the number of nursing home beds permitted statewide, making it very difficult for a new provider to disrupt the old way of doing things. Chelsea Jewish Foundation, a patient-centric nursing home that has more in common with Green House than a traditional facility, was fortunate to obtain an exemption from Massachusetts’ strict rules back in the days of Governor Romney – but many more are not so lucky.

Additionally, more than 30 states have certificate of need laws making any new installation subject to government approval, with policymakers wary of approving new facilities even when demand gets high. Scholars at the Mercatus Center at George Mason University describe these laws as requiring “permission slips” to make any number of industry moves, including opening up a new facility, acquiring another facility, and purchasing equipment. Harvard medical scholar David Grabowski sums up the evidence that these laws result in less disruption to the failed status-quo of miserable nursing homes, resulting in “lower access and quality of care while increasing private-pay prices. Certificate of need has even distorted the size of nursing homes. The average number of beds in a nursing home is roughly 110 in states without a certificate-of-need law and 131 in states with a law.”

Nursing homes don’t have to be a miserable, expensive experience for all parties involved. If states committed to lifting moratoriums on state-wide bed counts and made it easier for new providers to set-up shop, the elderly and disabled could finally have a shot to have more fulfilling lives. And, at a time when entitlement programs such as Medicare and Medicaid are accumulating trillions of dollars in debt, a 30 percent reduction in long-term care spending would be a welcome relief for taxpayers. With more leeway and less barriers, managed care visionaries can let a thousand flowers bloom in more and more Green Houses.

Ross Marchand is a Catalyst Policy Fellow and the director of policy for the Taxpayers Protection Alliance. He focuses on a range of issues, ranging from health-care reform to internet regulation to Postal Service-related issues. Ross is an alumnus of the Mercatus Center MA Fellowship at George Mason University, where he received his MA in economics in 2016. He has interned for the Texas Public Policy Foundation and the American Legislative Exchange Council, analyzing and blogging on a variety of public policy issues.
Catalyst articles by Ross Marchand