FARGO — The coronavirus pandemic has taken a financial toll on almost every sector of life, and long-term care facilities for seniors are no exception.
Skyrocketing costs related to the purchase of personal protective equipment, the need to quarantine COVID-19 positive residents, and the demand for increased staffing levels, coupled with loss of revenue and limited relief assistance, have left area senior services facilities with an uncertain financial future.
But, as each of those who spoke to Forum News Service about the current financial strain pointed out, the protection of precious lives comes with a determination and resilience to withstand whatever the virus confronts them with.
Nearly 10,000 North Dakota residents live in nursing home, assisted living and basic care facilities across the state, according to Shelly Peterson, president and CEO of the North Dakota Long Term Care Association. That includes 5,300 people in skilled nursing homes, 2,600 in assisted living, and 1,800 in basic care facilities.
While costs vary dramatically depending on the level of care, Peterson said the daily average for a skilled nursing home stay is $280 per person.
Prior to the pandemic, Peterson said, the wearing of masks, face shields, gowns, and gloves was atypical. When someone did have an infection requiring such extreme isolation precautions, she said, they could expect their rate to increase an average of $150 per day.
Peterson called the cost of some PPE orders these days “mind boggling.” A recent facility, she said, spent more than $400,000 on a gown order.
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Another challenge is labor costs, which have risen an estimated 25%, "at a minimum," Peterson said, and loss of revenue is a very real problem.
“With the hospitals shut down and not doing elective surgeries,” she said, “you don’t have people going in redoing hips, knees, [procedures] that would generate rehab.”
Families have also been holding back on placement, she said, because of the fear of death in a congregate care setting, as well as the lack of visitation rights.
The majority of the more than 200 facilities in North Dakota are nonprofit organizations, the highest percentage of any other state.
“Generally, our No. 1 one issue is money,” Peterson said.
That’s true now more than ever before.
Funding for North Dakota and Minnesota’s long-term care facilities is completely controlled by their state legislatures, Peterson said.
“We’re the only two states in the country who have rate equalization,” she said. “Whatever they set as the rate, that’s what you charge the private pay and that’s what you charge the Medicaid residents.”
If the rate isn’t set appropriately, she said, it can’t be raised without approval from the respective legislature. “So, you work really hard to make sure there’s adequate funding and adequate support,” Peterson said.
That correlates with what Jon Riewer, president and CEO of Eventide Living Communities, is seeing on a daily basis.
Staffing costs through June increased an estimated $799,000, Riewer said, due in large part to added hours and “appreciation pay.” Projections through September suggest another $300,000 will be called for.
Eventide offers a full continuum of services, from skilled to memory care, he said, including assisted and senior living. Four of their sites are located in the Fargo-Moorhead area, all of them nonprofits, with a total of 800 residents.
The nonprofit employs 1,400 full- and part-time workers, with roughly 1,000 in the Fargo-Moorhead area. Total yearly revenue is an estimated $90 million, he said, with expenses near the $88 million mark, and anywhere from $45 to $50 million goes to staffing costs.
To date, Eventide has conducted more than 1,300 tests for COVID-19, the cost of which has been incurred by the state. Seventy-five staff members have tested positive, all of whom recovered. Seventy-two residents also tested positive, with two currently active, and 23 deaths.
Additional PPE, food delivery, and other unexpected costs totaled $288,000 through June, and another $87,000 will be spent through September.
As of June, Eventide had a census decrease causing a loss of $1.7 million, he said. The census measures the occupancy level across all facilities. An almost equal amount is projected to be lost by the end of September.
Riewer said financial recovery projections put them well into 2021 on the occupancy side.
“That’s without a second wave,” he said.
While there has been more stability on the assisted living side, Riewer said it’s hard for people to get excited about communal living with the specter of additional safety restrictions looming overhead.
“I’ve heard stories of people waiting it out in hotels,” he said. “Traditionally, this is a very busy time for move-ins and tours.”
Not this year, especially at a place like Eventide, which offers a hybrid of age-in-place options, normally an advantage. Just not during a pandemic.
“It’s really hard to market to those front-end seniors looking for a lifestyle,” he said.
Where do they make up for all this lost income?
“I don’t know that we do,” he said.
And though he said he hates to acknowledge it, he’s already thinking about the next big financial challenge.
“If we’re largely dependent on Medicaid,” Riewer said, “and Medicaid is funded by our state coffers, you can imagine the nervousness we all have about what that’s going to look like.”
Outside of the federal CARES Act funding, Eventide was too large to qualify for other forms of relief, such as PPP loans, so Riewer said they’ve been beefing up their lines of credit, getting good at preserving PPE, and preparing to fight for their financial survival as the next few years unfold.
Self isolation from friends, family, and neighbors may be taking a huge emotional toll on everyone, but it’s also giving Riewer a glimmer of hope about proving the value of community care in the future.
“I’m optimistic because we know what true isolation can do to the spirit,” Riewer said.
Money they don't have
“The issue we have with our senior housing is they haven’t qualified for a lot of the federal CARES Act money,” Patti Cullen, president and CEO of Care Providers of Minnesota said.
While nursing facilities with Medicare participation have gotten some federal assistance, some senior living facilities, especially private pay, haven’t gotten anything from the federal government, she said.
“Their struggle is how much can you raise rents to cover all the increased costs,” Cullen said.
Minnesota has 368 skilled nursing facilities statewide, she said, and 1,400 assisted living. The average size per facility is just under 100 residents.
Unlike North Dakota, the Minnesota divide between for profit and nonprofit facilities is about 50/50. Private monthly room rates at nursing facilities in Minnesota average $11,000, she said; semi-private is closer to $10,000.
Federal assistance to help with infection control, adding staff and equipment, and paying overtime and hazard pay was not made available to assisted living facilities, Cullen said. And, those facilities who did receive federal dollars found out they couldn’t fully afford the premium costs associated with a COVID-19 outbreak if they had more than one exposure.
“All they know is they’re spending money they don’t have,” she said.
The new Wild West
Garth Rydland, president and CEO of Valley Senior Living, is seeing many of these issues at their three Grand Forks locations, with approximately 550 residents and 850 employees, but $1.8 million of federal Provider Relief Funds have allowed them to absorb the extraordinary costs so far, as well as those expected in the future.
“The cost of products has skyrocketed,” Rydland said. “Items such as an isolation gown used to cost about 50 cents. Those same gowns now cost $2.75 each.”
Concern for the fall and winter months caused them to order a six-month supply totaling $402,050.
At the beginning of the pandemic, he said, they had 7,000 masks on hand, which would typically last them a couple of months.
“Now we are using over 10,000 masks a week,” he said.
And they used to be able to get anything from any source. Not anymore.
“It's like the Wild West of PPE,” Rydland said. “We paid a company that didn’t exist prior to the pandemic $80,000 for an order of 100,000 masks two months ago. [As of June 29], one-third of the shipment finally moved from China to a warehouse in Cincinnati. The rest is still ‘on hold.’”
Staff are tested every two weeks, he said, with an average of four positive results each time. Six residents tested positive in late April, and then no one else for five weeks. In June, three residents were identified as having COVID-19.
Liability insurance premiums are going up, if it can even be found for skilled nursing, Rydland said. Valley Senior Living’s premium has increased at least $120,000 from 2019.
“There’s a lot of insurance companies right now that are not writing new policies,” he said, “and they will exclude any claims related to COVID-19.”
There’s also the added expense of paying staff 100% of their scheduled hours to stay home if they have COVID-19 symptoms, or exposure to someone suspected of having it. At one point, Rydland said they had the equivalent of 35 full-time employees out at once. So far, they’ve spent a total of $200,000 on the new benefit.
While federal disbursements have helped keep Valley Senior Living financially well-positioned for the future, Rydland said he’s exercising extreme caution.
“Some people think we’ve made it, and we’ve come out the other side,” Rydland said. “And we are far from that.”
For a complete cost analysis of long-term care by state visit https://www.genworth.com/.