Skilled Nursing Facilities

Responding to Staffing Crisis as a US Nursing Home

Nurse puts her head in her hands
Cheryl Lee
July 15, 2022
1 min read
Nurse puts her head in her hands

We are about to witness the closure of over 400 US nursing homes this year, with the staffing crisis as one of the driving factors.

Since 2015, more than 1,000 nursing facilities have ceased operations with approximately 45,000 residents being displaced. Several factors led to the closure of the nursing institutions, with the pandemic as the exacerbating factor.

Remaining nursing homes are expected to feel the increased pressure from the closure’s repercussions, with impacts likely to be higher cost and possible closure.

Why have US nursing homes closed?

Staffing crisis

The pandemic has left US nursing homes struggling to retain their staff , impacting their ability to provide quality care. Over 400,000 nurses have left the industry and they are not returning.  

Apart from lost human resources, factors such as the new Biden administration mandate, industry norms and burnout are also impacting staffing levels.

Contributing factor 1: New mandates

The pandemic has magnified issues for nursing care standards, with vaccinations as a means to curb the spread of virus. In line with this, the Biden administration had pushed forth policies such as minimum staffing requirements for nursing homes and vaccination mandates for health-care workers.

While these policies are created with goodwill, it has also unintentionally worsened the labor shortage situation for US nursing homes.

The Centers for Medicare & Medicaid Services (CMS) is establishing a minimum staffing level with the aim of providing residents high-quality nursing care. This initiative was proposed as research has observed fewer COVID-19 deaths when nursing facilities have a higher number of registered nurses.

The CMS will also hold US nursing homes accountable if they fail to meet the minimum staffing level. Considering the penalty mechanism and staffing shortage situation, we expect nursing institutions to experience increased pressure in meeting the standards.

Unlike minimum staffing requirements which mainly involves nursing facilities, vaccine mandates affect both nursing institutions and the labor force directly.

Health-care workers in facilities under Medicare and Medicaid payment are expected to be fully vaccinated, otherwise, nursing institutions may be removed from the funding program.

Contributing factor 2: Industry norm

Nursing aides, also known as nursing assistants, are vital players in a nursing home ecosystem. They are the fundamental actors who interact with the residents. They are also the ones delivering the quality care which families prioritize.

Despite their valuable contributions, nursing aides are undervalued.

Most nursing assistants work as an independent contractor to the nursing facilities instead of an employee. Thus, they often face unequal treatments such as the inability to turn down extra shifts, apply for sick leaves and receive low wages. In some cases, these nursing caregivers may even receive penalties for not taking on longer working hours.

This makes it even more challenging for US nursing homes to source and hire nursing assistants for their facilities.

Burnout can affect the quality of care residents are receiving.

Contributing factor 3: Burnout

Since the start of COVID-19, nearly 400,000 workers have left US nursing homes and residential care facilities. Coupled with the Omicron wave, the effect of staffing shortage was amplified. Frontline workers had to stay home due to COVID infection, and many quit for better opportunities. Therefore, remaining nursing aides are expected to take on the additional workload by handling more tasks.

Post-traumatic stress disorder (PTSD) is another mental health issue common in nurses. The nature of a nursing job involves close interactions with residents. Thus it is no surprise why nursing staff display symptoms similar to veterans in combat after witnessing residents pass away from COVID-19.


Besides staffing shortages, funding is another huge challenge for US nursing homes.

According to AHCA, it is projected around 32 to 40 percent of residents are residing in nursing homes which are potentially at financial risk. They also projected nursing facilities to have negative 4.7% operating margin based on a median occupancy of 77.3%.

The CMS also announced a 4.6% cut to the Patient-Driven Payment Model (PDPM) amounting to $320 million for FY2023. CMS rationale it as a way to compensate for the overpayments made to nursing homes when PDPM was first introduced.  

In response to the CMS initiative, the president and CEO of AHCA commented: “Many nursing homes already face imminent closure”. Consequently, “this Medicare cut could force more seniors across the country to relocate and find alternative care farther away from family and loved ones”.

Beyond a cut in PDPM payment, nursing homes will have to tick off more requirement in order to remain eligible for Medicare and Medicaid payment

Repercussions on remaining US nursing homes

Higher cost

US nursing homes are turning to temporary staffing to cope with the high volume of workload and lack of manpower. Staffing companies are charging facilities as high as $84 per hour for a nursing aide, which is two to four times higher than before.

In view of these lucrative prices, workers are quitting their staff positions to become contract nurses. This results in high turnover rates which reduces nurse supply and increases demand for contract nurses.

Recently, at least 4 states have enacted regulations to increase pay for nursing home workers, and at least 3 states are providing nursing staff one-time off bonuses to retain them. While this is a possible solution, it does not deny the fact nursing homes are paying more than before.

Suffice to say the repercussions of staffing shortages will have a lasting effect and nursing homes are already feeling it.

Limiting new admissions also means turning away residents who need the care.

Limiting new admissions

At the peak of the pandemic, nursing aides may even care for up to 25 residents and it is impacting the quality of care they deliver.

With inadequate staffing manpower, nursing facilities opted for the last resort – limiting new admissions.

According to AHCA, 58% of nursing institutions have resorted to limiting new admissions as a result of staffing shortage. The Biden administration’s new initiatives further aggravated the situation even though it seeks to enhance the quality of care.

However, curbing the number of new admissions means US nursing homes are not optimizing their full capacity and this is hurting their margins.

Increased expectations

Approximately 23% of COVID-19 related deaths stemmed from nursing facilities. As such, there is greater expectations for nursing homes to deliver better care. This is why also CMS aims to phase out “rooms with three or more residents and to promote single-occupancy rooms” alongside minimum staffing requirements.

In addition to staffing crisis and limiting residents’ admissions, smaller nursing homes are struggling even further to meet these expectations. Thus, working towards these standards may require them to cut down on the residents in-take even further.

Despite their best efforts to provide residents with the care they deserve and meet the expectations, a staffing crisis is inhibiting their ability to do so.

Together, all these repercussions form a closed loop of vicious cycle, with staffing crisis as the leading factor.

So what should US nursing homes do?

The next step forward

Moving forward, nursing institutions should consider investing in technology software to reduce the administrative burden on nursing staff. Chat with us today to find out how Zipline can implement our software in your facility according to your needs.

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