Pros and Cons of Downsizing Nursing Home Staffs
There have been many divided opinions about the idea of downsizing nursing home staffs, as people are split on whether it’s a good idea. A business that resorts to downsizing is likely going through a rough patch. Such is the case with nursing care facilities, which have experienced tremendous upheavals over the past two years.
The COVID-19 pandemic has negatively affected businesses in various sectors all over the world. The nursing home industry has also had these troubles, resulting in massive layoffs and severe understaffing and pushing nursing home liability insurance to the brink.
Pros and Cons of Limiting Nursing Home Staffs
Is downsizing nursing home staffs a good idea? While downsizing usually indicates trouble for a business, there might be some positive aspects to it as far as the long-term care industry is concerned. At the very least, it doesn’t necessarily indicate that the particular facility is in trouble. In some cases, downsizing may have justification.
The Shift Toward More Private Rooms
More and more facilities are considering making the shift toward more private rooms. It is the case with Pearl Healthcare, which is currently amidst a massive renovation project. The Illinois-based company likely will reduce the number of beds on offer in favor of more private suites spread out over two facilities.
Several factors drive this transition. In a report published by Skilled Nursing News, CEO Eitan Zeffren observed the increased focus on aesthetics and the type of care environments people prefer. As more people reach the age when they need long-term care, Zeffren feels that shifting toward more private rooms will pay off in the long run.
Of course, such a shift almost certainly entails downsizing. Unsurprisingly, many smaller operators balked at the prospect, citing cost concerns.
One example is Highland Oaks, a Chicago-based facility with 52 beds. According to executive director Matt Kinsinger, scalability issues pose a significant hurdle to his desire to shift to more private rooms.
Kinsinger explains that with 29 rooms, Highland Oaks would be wrestling with the overhead of maintaining 29 beds. In contrast, facilities with 140 beds would probably be able to manage.
Others in the industry have similar concerns. Dana Wollschlager and Ed Slack of healthcare specialists Plante Moran Living Forward have been analyzing market dynamics and formulating strategies to help nursing care facilities populate their rooms. It is an incredibly crucial task considering that many of the operators the partners work with are struggling to recover from the pandemic.
Wollschlager voiced concerns that the utilization of SNFs may never reach the same levels as before COVID-19 struck. He went on to say that over bedding has long been an issue, even before the pandemic.
The main problem for many nursing care facilities is how to address scalability issues. But Pearl Healthcare’s Eitan Zeffren cites the new opportunities for smaller operators to deal with these challenges.
Zeffren reminds smaller facility owners that the company started reasonably modestly in 2018. By adopting a more agile approach that enabled Pearl to deal with changes, the company eventually expanded its network to encompass six facilities. He now emphasizes the importance of maintaining efficiency and tailoring one’s approach to address each facility’s unique needs.
Cost Remains a Challenge
Others continue to struggle to make the new model work financially. Highland Oaks’ Matt Kinsinger acknowledges that switching to more private rooms may reduce the population by 50%. But it won’t necessarily result in a corresponding cost reduction.
Lets’ say a facility plans to build 29 private rooms. The cost of cleaning and maintaining those rooms still wouldn’t go down significantly. For Kinsinger, the main concern is how to make the transition without increasing costs.
Downsizing offers many advantages that nursing care facilities should consider when planning for the future. While it is undoubtedly the way forward for many organizations, others will have to weigh its financial feasibility against other factors. In any case, the possibility of shifting to private rooms will continue to inform the long-term care industry moving forward.
About Midwest Insurance Group
Midwest Insurance Group is a risk retention group developed by Caitlin Morgan Insurance Services in response to the unique needs of the healthcare industry, particularly that of senior living facilities. With rising premium costs and difficulties in obtaining coverage from the traditional professional and general liability insurance market, Midwest Insurance Group represents a viable, long-term insurance alternative for the senior living sector, giving members complete control over costs and claims management. Midwest Insurance Group is reinsured with Lloyd’s of London, and A rated by Demotech.