During January’s omicron wave of the COVID-19 pandemic, leadership at Sholom, Minnesota’s Jewish long-term care organization, started panicking.
At one point, 60 employees were sick with COVID and unable to go to work. For an organization with roughly 530 workers, down from about 900 pre-pandemic, losing staff to sick leave was devastating.
“We were inches away from saying, ‘how do we call the National Guard,’” said Barbara Klick, Sholom’s CEO.
The staffing shortage isn’t unique to Sholom; right now, there are 23,000 job openings in long-term care in Minnesota. A majority of nursing homes, and over a third of assisted living homes, are turning away seniors due to a lack of staff. Fifteen nursing homes have closed since 2019.
Some missing workers are among the 1 million Americans who have died of COVID, or they have long COVID, the debilitating chronic condition that develops even after a mild case of the virus. Many others have left for retirement or higher-paying jobs, as inflation makes a nursing home wage untenable.
(In 2021, Sholom paid a $27,100 fine for a workplace safety violation that the state says led to the death of an employee from COVID. Sholom disputes the violation, which was judged not “willful” by the state.)
“We’ve been paying caregivers, frontline workers, people in the caring professions, 30% below average wages historically,” said Dan Pollock, an assistant commissioner in the Minnesota Department of Human Services. “We set ourselves up for this.”
But attracting and keeping staff by raising wages isn’t straightforward for Sholom and other nursing homes. Much of the money they make comes from the state, which pays long-term care facilities for their care of patients with Medicaid, a federal insurance program for people with low income.
To raise staff wages, lawmakers need to increase what the state pays for Medicaid, nursing homes say. So Sholom has been part of an industry effort to lobby Minnesota’s legislature to do so before the session ends at midnight on May 22.
Mired in partisan haggling, those efforts might not pay off. The Republican-controlled Senate passed a bill that would give nursing homes $358 million for pay raises, while the Democrat-controlled House passed legislation focused more on child care needs and one-time payments across the human services workforce.
If the final human services omnibus bill doesn’t include the Senate plan, Sholom and other long-term care operators say their level of care will get worse, and many nursing homes will have to keep rejecting potential residents — or shut down entirely.
“It’s not just to say ‘we want money for people,’ what I’m really saying is ‘I want money for quality,” Klick said. When staff is around long-term, they know the residents well and can best address their needs, she said.
“If [staff] get livable wages, I get good people who in turn give me good quality, which means that we can care for seniors in the fashion that they should be cared for.”
Pay rates and delays
In 2021, Sholom operated with $50 million in revenue. Some of that money came from philanthropy, like a capital campaign that raised roughly $20 million over five years from the Jewish community to remodel and repair old buildings.
But philanthropy, while deeply appreciated by leaders, isn’t enough to cover the cost of running Sholom’s network of nursing homes and assisted living facilities.
“The donations that come in right now…have been around COVID expenses, or they’ve been around the buildings or technology,” Klick said. “They really haven’t been around the operations,” like paying for electricity, heating, kosher food, and, of course, staff.
That’s where the state comes in. Operating costs for nursing homes are covered largely by what Minnesota pays in reimbursements for Medicaid. The rates of reimbursement are calculated for the specific expenses at each facility.
For example, if a nursing home resident on Medicaid needs a lot of care and attention, which takes more staff time, the state financially reimburses the facility more than for care given to Medicaid patients who are relatively self-sufficient. Reimbursement rates are also capped, so the state can only partly payback nursing homes.
But there’s a problem with this system: It doesn’t account for rapid inflation. That’s because the state uses old expense information to calculate how much to pay back nursing homes each year.
“When you have a period of rising costs…but our reimbursement rates are based on 15 [to] 27 month-old costs, it doesn’t line up,” said Dave Berryman, Sholom’s CFO. “So we’re losing money.”
A survey by Minnesota long-term care advocates found that the average nursing home operates in the red, and could lose up to $900,000 in 2022 if rates aren’t adjusted for current costs.
In some ways, fighting for better pay is a Sisyphean task. The long-term care industry is lobbying the legislature for a $25 an hour wage for workers, which looked competitive before inflation hit. But now, “there’s a lot of people making close to that in a lot of industries,” Klick said.
Some long-term care facilities, like Sholom, increased staff wages to be able to keep workers, even as it means losing more money without adjusted reimbursement rates. And inflation keeps going up.
“Every time you open the newspaper, it’s gas, it’s groceries, it’s everything, you know, so we’re not even sure if $25 [an hour] will do it,” she said. “But it certainly will be better than what we have now.”
Action and inaction
There have been some victories for long-term care at the legislature this year, like the approval of the long-awaited “hero pay” for frontline workers.
But the one-time bonuses won’t solve the industry’s sustainability problem. Meanwhile, a new bipartisan agreement for spending the state’s $9.25 billion surplus could include funding for nursing homes, but with details few and far between, it’s unclear what that funding will look like — or if spending legislation will get passed at all.
“Our biggest fear is that lawmakers will go home this legislative session without passing much of anything,” said Kari Thurlow, CEO of LeadingAge Minnesota, a long-term care advocacy group. Lawmakers are constitutionally mandated to pass spending legislation every odd year, with no such pressure during even years like 2022.
In Thurlow’s best-case scenario, the final spending bill approved this session will include language from the Senate that increases wages by raising Medicaid reimbursement rates. “It’s not 100% of what we’ve asked for, but it is a very good start at bringing Medicaid rates closer to the actual cost of care,” she said.
If the legislature passes nothing, or doesn’t increase Medicaid reimbursements, long-term care advocates will lobby Gov. Tim Walz to use federal COVID relief to help the industry. But that’s not a sure bet.
“We’re still trying to understand what the governor has left in terms of American Rescue Plan Act money for the state of Minnesota,” Thurlow said. “It’s not a great tool for funding sustainable wage increases, but it could help address other costs.”
Besides the legislature, efforts to help nursing homes are focused on increasing interest in long-term care work in schools and colleges and building support for the elderly outside of care facilities to lessen the load on the industry. Alongside the staffing shortage, Minnesota is seeing an increase in seniors requiring care as baby boomers age and retire.
“The notion that mom or dad is going to go live in a nursing home or assisted living, and they’re going to live there for 20 years, that is really not the case anymore,” said Dan Pollock, the assistant commissioner at the Minnesota DHS.
Pollock is working to help communities become what he calls “age-friendly,” where support services for the elderly help them continue to live at home and make it easier for families to care for older family members.
Part of that work is being paid for by $600 million in federal COVID relief, with money going toward projects like better broadband internet for the elderly and people with disabilities, and helping ethnic minority communities become medicaid providers.
The Jewish community can also work on being age-friendly, Pollock said. Pollock, who is a member of Temple Israel synagogue, invoked the concept of tikkun olam, or healing the world.
“I would think of it as, what’s going on with your neighbor down the street…the person who’s not your relative, who’s maybe an older adult or a person with disabilities?” he said. “Is there something you could do just to be an unpaid caregiver, or…be a direct service provider?”
“There’s a cultural message for a lot of communities, we need to be helping each other,” Pollock said. “That’s the only way that any of this works.”
But at a certain point, the need for quality long-term care – given by well-paid staff – becomes clear, Klick said.
“Everyone thinks they’re going to live like Betty White…’I want to live till I’m 99 and live at home and have a great time,’” Klick said. “Well, I’m just telling you, that doesn’t happen for everybody. As we live longer, we have more mental health issues, more physical issues, more problems, and more memory loss.
“There’s going to be a need for Sholom and other long-term care providers as we go forward,” she said.
