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Nursing Homes are in Financial Crisis: Our Seniors Deserve Better

January 20, 2023

Guest Essay – D&C

Nursing Homes are in Financial Crisis: Our Seniors Deserve Better

Nursing homes across New York State need your help. There are approximately 614 nursing homes in New York State. We say approximately because nursing homes have been closing at an increasing rate. If not closing, these facilities are forced to take vital beds offline, which means they are unavailable for people who need them. If you, your loved ones, or family members depend upon nursing home care in your community, this statistic should scare you.

The end of 2022 marked a new milestone of which most people are unaware – but one that is vitally important to the health care system. It has been 15 years since New York State raised the daily Medicaid rate paid to nursing homes to account for inflation. Except for a meager 1% increase in 2022, there has been no increase since 2008. Meanwhile, the inflationary costs that we all experience have risen by 42%.  With Medicaid being the predominant payer for care (about 75% of all resident days are paid by Medicaid), is it any wonder that many nursing homes in New York State are on the verge of financial collapse?

Our seniors deserve better. The financial hardships faced by nursing homes directly impact the residents who depend on us for custodial care (e.g., bathing, dressing, eating) and skilled clinical care; not to mention life enrichment to provide meaning and purpose to residents’ lives. This crisis has resulted in a reduction of nursing home beds and the inability of hospitals to discharge to nursing homes.

This alarm has been sounding for several years with legislators and governors – as failing to reimburse the actual cost of care is not sustainable. Today, the shortfall between what it costs to provide care for one day to one resident and what we are paid by NYS exceeds $110 a day. Action to increase Medicaid rates must be taken in 2023.

Unfortunately, New York has distinguished itself as being dead last in what it reimburses nursing homes compared to actual costs. It’s one of very few states that does not update its rate regularly, even though the law requires periodic updates. When most states increased Medicaid nursing home rates in response to the pandemic, New York reduced the rate not once, but twice (cuts that were thankfully restored in the 2022 budget). The political will to prioritize care for our most vulnerable older adults is simply missing.

Adding insult to the financial injuries is the ongoing staffing crisis declared months ago impacting all sectors in the healthcare delivery system. While this is impacting services at all levels, nursing homes are unable to compete for the quality workforce we all aspire to employ.  The result is very real if you’re in need of nursing home care. Due to staffing limitations, many nursing homes in Western New York, including members of the Alliance for Senior Care in Rochester, are for the first time in their history, leaving beds vacant. Statewide, over 6,700 beds are off-line for the same reason. This has a direct impact on hospital capacity: when hospitals cannot discharge patients who need nursing home services, there are no hospital beds available for patients who truly need hospital care.

The frail elderly we serve deserve better from New York State. The caring and compassionate employees who work in these settings deserve better. The families who rely on us today, and the community who will look to us in the future, deserve better.

Nursing homes across the state are asking every legislator and the Governor to take notice of the damage caused by financial neglect and to prioritize long-term care in the next state budget by providing a 20% increase in the nursing home rate – which is still less than half the increase in costs we have absorbed over the past 15 years. It is time to do better for our New York State seniors.


Members of the Alliance for Senior Care:               Rochester Regional Health Nursing Homes
Episcopal SeniorLife Communities                           University of Rochester Medical Center

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