New Analysis: U.S. Skilled Nursing Sector, America's 2nd Largest Health Employer, Caught in State-Federal Funding Squeeze Jeopardizing Seniors' Care and Fragile Economic Recovery

State Medicaid Volatility in State Capitols Raises Stakes in 2011 Federal Medicare Funding Debate

WASHINGTON, Feb. 8, 2011 /PRNewswire-USNewswire/ -- With President Barack Obama preparing to unveil his proposed FY 2012 federal budget, a new analysis detailing the significance of the U.S. skilled nursing sector to the strength of America's national, state and local economies spotlights how volatility in state Medicaid funding – combined with the possibility of further cuts to Medicare – risks not only seniors' care, but jobs stability and the fragile economic recovery now taking shape. Moreover, the study emphasizes the critical importance of stable Medicare funding from Washington in propping-up the ailing Medicaid program, which has become a touchstone of budgetary conflict in state capitols nationwide.  

"When considering budgetary policy for FY 2012, policymakers should be cognizant of the considerable impact of nursing facilities on the United States economy, and that Medicare cuts have a significant impact on jobs throughout America," says the new February 2011 installment of the Alliance for Quality Nursing Home Care's "Care Context" series of health policy analyses, created with analytic support from Avalere Health, a non-partisan health advisory firm. The new report details the fact that the U.S. skilled nursing sector – the nation's second largest health employer – accounts for 1.7 million jobs, with a total impact of over $201 billion annually on U.S. economic activity.

The new analysis finds the following 12 states 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:  

"With pressure on Governors in big and small states alike to cut state Medicaid funding, this places a premium on ensuring the President and Congress work to achieve stable Medicare funding for the skilled nursing sector to help protect seniors' care, grow the U.S. jobs base, and nurture our fragile economic recovery," stated Alan G. Rosenbloom, President of the Alliance, and an expert on the deep correlation between Medicare and Medicaid funding. He also stressed the fact that over the past two years, the sector -- through both regulatory and budgetary actions – has already absorbed nearly $30 billion in Medicare cuts over ten years.

The cumulative funding squeeze negatively impacting the sector, and by extension U.S. seniors and workers, Rosenbloom said, is not a partisan matter. "Protecting seniors' care, the U.S. jobs base, and our slowly developing economic recovery, is largely a function of ensuring federal Medicare funds are adequate and sufficient in the FY 2012 federal budget to compensate for scaled back state Medicaid funding. With record numbers of nursing facility patients returning home after successful rehabilitation, this should further incentivize federal and state lawmakers alike to help pass budgets that promote economic stability for a key employer prevalent throughout rural, suburban and urban America."

Emil Parker, Director at Avalere Health, the lead author of the analysis, said nursing facilities across the nation are responding to the funding squeeze in a variety of ways, including submitting late payments to vendors and being forced to delay facility improvements and maintenance: "Given that the average age of nursing home facilities in the United States is 29 years, delays in maintenance may negatively affect residents' quality of life. In addition, if nursing facility physical plants cannot be maintained adequately and the sector's capacity declines as a result, some patients may have to spend more time in higher-cost acute care hospitals because of delays in transfers to nursing facilities," he said.

"With approximately 70 percent of nursing and rehabilitation facilities' costs related solely to staffing, a clear and present danger of actual staffing cuts looms later this year unless Medicare funding stability is achieved by President Obama and Congress in the months ahead," Rosenbloom warned. "Avoiding a disastrous scenario of this nature must be a top health policy priority for the Obama Administration and for Congress."

Nursing facilities are the dominant provider of Medicare post-acute care services, treating 50 percent of all Medicare beneficiaries who are discharged from hospitals to post-acute care. The majority of patients are short-stay Medicare patients who are discharged from the hospital to the nursing facility, and need restorative and recuperative care before returning to home and community.

To View Complete Study, and to Learn More About the Significance of the U.S. Nursing Home Sector to the U.S. Economy and its Dominant Role in Caring for Post-Acute Care, go to www.aqnhc.org.

SOURCE Alliance for Quality Nursing Home Care