In Jobs Debate, Nation's Nursing Home Sector a Proven Winner as Reliable Local Employer

Sep 08, 2011, 13:42 ET from Alliance for Quality Nursing Home Care

- President Obama, Congress Urged to View Medicare as Both Vital Seniors' Program and Key Jobs Driver -

WASHINGTON, Sept. 8, 2011 /PRNewswire-USNewswire/ -- As concerns at the White House and Capitol Hill mount about zero jobs growth in the U.S. economy, the Alliance for Quality Nursing Home Care (Alliance) today urged President Barack Obama and the newly appointed Congressional "Super Committee" to view Medicare not just as a vital seniors' health program, but also as a key driver of local jobs that has now enabled the U.S. nursing home sector to become America's second largest health facility employer and a cornerstone of local employment from coast to coast.

Noting the New York Times report on August 17 that deep government funding cuts have "led many in the health industry to caution that it cannot be relied upon to keep hiring workers," Alan G. Rosenbloom, President of the Alliance, said the fact nursing homes employ 1.7 million Americans and generate $201 billion annually in economic activity should give pause to those who view Medicare as solely a program ripe for further cuts to meet deficit reduction targets.  "Medicare is far more than just a key national health program, and serves as a cornerstone of rural, suburban and urban employment throughout America," Rosenbloom stated. "We encourage our national leaders to recognize and respect the dual benefits of Medicare as both a program crucial to the health and welfare of our seniors and a program that can reliably grow jobs – particularly at a time when we are at risk for a double-dip recession."

Rosenbloom pointed to a new analysis from Avalere Health that finds a regulation recently issued by the Centers for Medicare and Medicaid Services (CMS) will reduce Medicare payment to the U.S. nursing home sector by $79 billion over 10 years, reduce national economic activity by $6.75 billion in FY 2012, and have a significantly negative economic impact on many of the nation's most populous states even as lawmakers seek ways to boost a worrisomely weak economy.  In many states, moreover, Medicaid cutbacks have created an even worse macroeconomic environment for nursing facilities.  

"In partnership with the American Health Care Association (AHCA), we recently launched an aggressive, objective and constructive national media campaign to make clear our sector cannot be expected on the one hand to continue being the reliable jobs partner we have proven to be even in this devastating economic downturn, while, on the other, absorbing one deep funding reduction after another," Rosenbloom continued, noting the campaign is expected to continue throughout the fall, and designed to draw attention to the repeated cuts.  "Layoffs, reduced salaries and benefits, and compromised patient care are not just a possibility, but a certainty if already squeezed facilities are viewed – yet again – as a target for Medicare funding cuts."

As Congress prepares for the President's speech before a joint session of Congress tonight, the Alliance leader said the following 10 states' congressional delegations have the highest number of nursing home jobs; followed by the total jobs created by nursing home activity, and the total economic impact on the state economy (Source: Avalere Health):  


NH Jobs

Total NH-Generated Jobs

Total NH-Generated Econ Activity




$21.35 Billion




$17.86 Billion




$13.13 Billion




$12.73 Billion




$11.63 Billion




$11.76 Billion




$10.72 Billion




$7.83 Billion




$9.83 Billion




$3.37 Billion

Overview of Recent Nursing Home Sector Payment Cuts and Ongoing Threats:

Over the past several years, the federal government has implemented a series of reductions in Medicare payments to nursing homes that will lower payments by more than $125 billion in the FY 2012-21 period.  Specific changes include:

  • FY 2010 CMS Rule. Estimated decrease of $16.8 billion over 10 years (FY 2012-2021) from the 3.3 percent forecast error (i.e., case mix) adjustment in FY 2010.
  • Federal Health Reform. Estimated decrease of $29.4 billion over 10 years from productivity adjustments/reductions in the market basket (inflation) update starting in FY 2012.
  • 2010 Regulation. Estimated decrease of $2.6 billion over 10 years from the 0.6 percent forecast error cut in the market basket update for 2011.
  • FY 2012 CMS Rule. Estimated decrease of approximately $60 billion over 10 years from the 11.1 percent RUG recalibration/parity adjustment and an estimated decrease of at least another $19 billion over 10 years from changes to payments for therapy services (at least an additional 3.5 percent cut in Medicare).  
  • Medicaid Cuts. The deteriorating economic conditions across the country also have led to significant reductions in Medicaid payments to nursing homes, compounding the risk to providers, employees and patients.  For example, Florida and Ohio have cut Medicaid payments to nursing facilities by six to seven percent already this year.
  • Potential Impact of the Budget Control Act. The Joint Select Committee on Deficit Reduction may recommend additional cuts in Medicare or Medicaid payments to nursing facilities. In addition, since Medicaid is the biggest payer for nursing facility care, any broad-based Medicaid reductions recommended by the Select Committee would have a disproportionate impact on nursing facilities.  Should the sequestration provisions of the Act be invoked, SNF Medicare payments could be cut an additional 2 percent or approximately $10 billion over 10 years.  

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SOURCE Alliance for Quality Nursing Home Care