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Our Nursing Home Industry – A National Scandal


Our Nursing Home Industry - A National Scandal
David Chess, MD, Chief Health & Policy Officer & Chairman of the Board / Founder, Tapestry Health

A society defines itself by how it cares for its most vulnerable, and especially its seniors. As a Board-Certified Internist and Geriatrician with over 35 years of providing care in nursing facilities, this sentiment has guided me throughout my career. It has led me to found Tapestry Health, a multispecialty medical practice that focuses on providing medical infrastructure in skilled nursing facilities (SNFs), as well as Project Patient Care, a patient advocacy organization based in Chicago, Illinois. My commitment to this work has led me to build innovative programs both in the community and in skilled nursing facilities, designed to provide more and better-focused care to our frail elderly.

Far too many of our SNFs have become the worst place to be either as a patient/resident or an employee. Many nursing homes lack the resources required to provide residents with the care they need and deserve, which results in low wages, insufficient staffing levels, high workloads and low morale. The COVID-19 pandemic has only exacerbated these challenges.

Our nursing facility industry is about to crumble.

The nursing industry is being torn apart by the convergence of several major currents:

1. Staffing—a large percentage of the workforce has vanished. According to Bureau of Labor Statistics data1, the number of workers employed at nursing care facilities nationwide has declined by 15%—from 1.59 million to 1.35 million—between February 2020 and November 2021, with decreasing employment nearly every month. This is nearly 250,000 employees in less than two years. As of late February 2022, 35.9% of nursing homes experienced a shortage of direct care workers2.

Furthermore, the cumulative percent decrease is drastically more than that in other health care sectors over the same period, with the total health sector seeing a 2.7% decrease, outpatient care centers seeing a 1.8% increase, home health services seeing a 1.4% decrease, and hospitals seeing a 1.8% decrease.

2. Staff salaries have increased over 20% this last year, yet rates paid to the facilities have stagnated and fee-for-service compensation for physicians and nurse practitioners has declined by up to 7.5 %. Medicaid reimbursement, which comprises the largest share of nursing home reimbursement, has not kept pace, resulting in SNFs and medical providers assuming the burden of those costs. 

3.  SNF census has declined by 25% (partly due to a lack of staff, requiring facilities to turn patients away).

4. A horrible work environment—with limited staff, the few remaining dedicated caregivers work multiple shifts and are constantly being called into work, which makes burnout rampant. Compensation alone doesn’t compensate for a markedly reduced workforce. People are simply overworked.

A Regulatory compliance and survey process both distract and often assault a beaten-up staff and push people out of service to the facilities.

The President’s suggested policies as highlighted in his recent State of the Union address are well intended but do not address these underlying issues. The President’s prescription for this ailing industry is to double down on approaches that haven’t worked over the last 50 years.

It is a time for a rethink.

It is time to align facilities, their funding and the survey process with social and clinical outcomes.

It is not time to blame venture funding, we must instead focus on addressing the systemic issues plaguing the industry. Nursing home occupancy declined by 16% from 2020 to 2021, which could lead to more than 1,600 nursing home closures in the next year3. In December 2021, over 300 nursing homes had closed their doors permanently since the start of 2020, with only a quarter of homes nationwide expressing confidence they could make it through the next year or beyond4. Shortages of nursing homes will have consequential effects; families will not have safe, high-quality places to send loved ones and hospitals will not have places to discharge patients. This will be particularly problematic for rural communities, where services and employment opportunities are already limited. Nursing home closures are especially alarming when you take into account that the U.S. population is aging and living longer than ever before.

The largest national nursing facility chains have dissolved and sold off assets. This is not a money grab, this is a distressed industry.

We need to make SNFs places where people want to work, are respected, have manageable workloads, and have the opportunity to learn and grow.

The road to achieving this shared goal is not to mandate staffing, but rather to pay for excellence. Currently, a 1-star facility gets the same reimbursement as a 5-star facility. We can create a funding stream that helps lift the 1 Star facilities and rewards the 5-star facilities. We can force poor-performing facilities that don’t improve to close while encouraging new facilities that are committed to excellence to open.

A second critical ingredient is to revamp our policy of oversight and punishment. The president suggests we massively increase our regulatory oversight.

It is clear that the current survey process as structured has not worked to create a safe and better care environment. It has not driven better care or better clinical outcomes. It has not made our facilities safer places to care for residents and patients. We have had groups of surveyors descending on facilities for 50 years. Though again well-intentioned, we cannot report on improvements in overall care, patient safety, or quality measures without first addressing the underlying issues facing SNFs.

The approach to oversight needs to become one of providing best practices to facilities and assistance with systems integration. In a setting of staff turnover approaching 100% even prior to the onset of the COVID-19 pandemic, the concept of staff education is not relevant5. These facilities need help instituting best practices and systems. We should instead repurpose a portion of survey funding to facility support and system development, partnering with our quality organizations, then survey, then penalize if necessary. If we did this, I believe we would have different outcomes, and would systematically be helping facilities build sustainable infrastructures.

Why should the government be in the job of making nursing homes better? Shouldn’t this be the responsibility of ownership?

Facilities do not have the staffing, funding (as a result of low Medicaid rates) or expertise to effectively implement new systems. This needs to be a public-private partnership. From this partnership, we can truly create safer, more sustainable places for care, and ultimately decrease the cost of care and oversight6.

There are precedents for this partnership. In 2009, as part of the Health Information Technology for Economic and Clinical Health (HITECH) Act, the federal government set aside $27 billion for an incentive program that encourages hospitals and providers to adopt electronic health records systems (EHRs). Additionally, CMS has launched a National Partnership to Improve Dementia Care in Nursing Homes to end the misuse of antipsychotic drugs as chemical restraints by reducing prescriptions by 15%. These programs, which have tangible impacts on individuals living in nursing homes, need to be expanded to further support our nursing home population.

We can do this. We need to stop doubling down on failed approaches and invest in creating safe centers for caring for our most frail, disabled and elderly.

About Dr. Chess

David is a geriatrician, internist and entrepreneur with 35 years of experience working to improve care for patients.  The systems he has developed have enabled clinicians across the country to truly care for people by providing care as if the patient was a family member. Prior to founding Tapestry, David was the Founder and Chief Medical Officer for TripleCare Inc., a telemedicine company focusing on caring for acutely ill people in nursing facilities, an area where he has extensive experience.


1. https://www.healthsystemtracker.org/chart-collection/what-impact-has-the-coronavirus-pandemic-had-on-healthcare-employment/

2.  https://www.aarp.org/ppi/issues/caregiving/info-2020/nursing-home-covid-dashboard.html

3. https://www.ahcancal.org/News-and-Communications/Press-Releases/Pages/Nursing-Homes-Face-Imminent-Closures-Without-Financial-Support-From-Congress.aspx#:~:text=From%202020%20to%202021%2C%20nursing,%2C%20their%20families%2C%20and%20staff.

4. https://www.usnews.com/news/health-news/articles/2021-12-23/as-covid-hits-nursing-home-finances-town-residents-fight-to-save-alzheimers-facility

5. https://skillednursingnews.com/2021/03/nursing-homes-have-94-staff-turnover-rate-with-even-higher-churn-at-low-rated-facilities/


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