By Steve Moran

A few weeks ago, we published an article titled “Is Don’t Blame the Nursing Homes’’ a Winning Strategy?” and got this email from a reader:

Can you please elaborate on what you mean in your #2 proposal to overhaul the industry? These kinds of things often sound great conceptually but the devil is always in the details. Can you please put some meat on the bone either in a direct reply or a future article?

That’s when I think you start to get people to buy-in. I am open to reforming but not without knowing some idea what you’re talking about.

He had a great point.

Here is what #2 said:

A complete overhaul of the entire nursing home post-acute system. This would mean standing up to pressure from nursing home operators that would fail under this overhaul, vendors that would cease to have a reason to exist, and regulators who would have to approach what they do very differently.


I have some underlying assumptions and beliefs that frame my thinking. If you think I have it wrong, I would love to hear your thoughts.

  • There is fundamentally enough money already in the system to provide great nursing care for the frailest in the United States, but the system is so broken that way too much money is spent on inefficiencies and regulatory compliance.
  • The buildings we have today were largely designed to service the needs of the operator and to reduce costs, with only minimal concern for resident well-being. (A prime example of this is two-, three-, and four-resident rooms.)
  • Even though broken, the system today works adequately for most operators and solution suppliers, meaning they are making money. This means that radically revamping the system creates a great deal of uncertainty and would undoubtedly mean some solution providers would be rendered irrelevant and others would be forced to radically retool. This all means that status quo with tweaking seems safer.
  • The regulatory system is expensive and combative, pitting regulators against operators, and to some degree pitting the public against both operators and the government. It also is so rigid that it often hampers great resident care. Yet the system in a weird, sick way works for everyone. The government is fearful of changing it in any way that appears to be favorable to operators, believing it would look like they don’t care about older people. The operators hate the system but know how to work with it. Bad operators fear a revamped system that would make them more accountable.
  • The reimbursement system is a complicated game where expert players can make a lot of money and amateurs get hurt. Because it is so complicated, it has spawned a cottage industry (actually big business) of consultants who are focused on extracting maximum dollars from the federal government while staying out of trouble.
  • The true financial health of nursing home operators is a kind of Willy Wonka’s insanity. On one hand, operators and trade associations are constantly advocating that the government better come up with more money or the whole sector will collapse. And yet, at the same time, nearly every time a nursing home comes up for sale, there are multiple buyers competing for the property — leaving unanswered the question of why anyone would be so eager to purchase a business that is losing money and about to go broke.

A New System

Here is what a new system would look like:

  • The resident experience would be the most important thing. In other words, everything done or not done would start with a single question: “What impact will this have on the resident experience?” recognizing that residents have vastly different needs and there will be compromises, largely driven by costs.
  • Regulations should be written to be just enough to ensure program flexibility and good care for residents. While not a perfect model, most very successful businesses have a mix of heavy, prescriptive rules that establish a brand standard but at the same time are not expensive when it comes to serving the individual needs of customers.
    It would require a regulatory framework that was more corrective than combative. Yet it needs to have enough teeth to swiftly shut down chronic abusive operators.
  • It needs to have staffing rules that are strong enough to ensure residents are getting the care, services, and experiences they need while flexible enough to do what is best for the residents, rather than simply meeting arbitrary standards.
  • Reimbursement rates should reflect the reality that CNAs and other frontline staff need to earn a living wage and that doing so will create a better resident experience.
  • Life enrichment should be elevated to a level that enhances resident well-being.
  • The goal should be to minimize documentation, doing just enough to ensure great care and legal liability protection.
  • Every single thing needs to be on the table, meaning that in designing a new system, there should be no need to protect any business sectors.