Using dementia patients as moneymakers? Big mistake for the nursing industry

In a given year, about 1.3 million Americans suffer a nursing home injury or death, which would amount to almost 50,000 deaths each year. Yet even with millions of Americans living longer and tending to their illnesses later in life, caring for people in nursing homes remains one of the most expensive industries in the country.

The industry has been challenged to solve this challenge as well as improving patient care and reducing costs. But efforts to improve this sector have yet to generate significant results, despite some innovations.

New evidence suggests that the rental revenue streams these organizations depend on aren’t materializing as expected. Further, many nursing homes are concerned that the inherent issues in caring for these patients are going to cause their reputation to suffer. This could mean long-term impact on the bottom line for such providers, as well as damage to their most vulnerable patients.

An informal survey of nursing homes suggests a mismatch between what is happening and what was expected. For example, the rental revenue earned by nursing homes did not appear to live up to expectations. As a result, many nursing homes are spending less on staffing. According to a study from the University of Minnesota, almost 17 percent of nursing homes are considered low-resources, and three-quarters of these low-resource facilities are not putting enough money into health maintenance, and nearly 70 percent of the low-resource facilities fail to provide the necessary supply of medications that make it possible for patients to be allowed to live as long as possible. These findings demonstrate the difficult choices most nursing homes are facing as they develop plans for closing these facilities and serve their elderly and disabled patients.

There is also a need for more transparency about what nursing homes are doing. Nursing homes have recognized the need to step up their efforts to improve safety and care for patients. However, in order to be effective, these efforts need to be formally documented. Lack of transparency in a sector that generates such valuable revenue is dangerous for the health of both nursing home residents and their families.

Policymakers also must help to improve the industry’s reputation. One way to do this is to help nursing homes find innovative ways to recruit new revenue streams — and they have no better tool than having a defined and transparent financial enterprise.

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