Our state is home to 362 nursing homes, currently caring for more than 22,000 older Minnesotans on any given day. These facilities serve a critically important role providing long-term care to our seniors and are vital employers in our communities.
Nursing homes need, and should expect, adequate funding to hire the skilled staff required to provide the best possible care. Older adults and their families also need, and should expect, high quality, safe environments from the long-term care industry.
One way to achieve these goals is to change the way we pay for this care by creating incentives for nursing homes to achieve better outcomes. Minnesota has implemented similar strategies for other health care programs and seen tremendous results.
The Legislature, to its credit, attempted to do just that in 2015. Unfortunately, it’s not working. A recent independent evaluation of nursing home payments in Minnesota found no improvement in nursing home quality, as determined by feedback from residents, family members and regulators. The evaluators predicted that, without further changes, 97 percent of Minnesota’s nursing homes will have no incentive to improve quality.
We have another chance to get this right. Gov. Tim Walz has proposed changes to the quality measures now in place that are used to determine payment rates. The governor’s budget, currently being considered by the Legislature, would also impose reasonable limits on payments, based on quality. The goal is to get better value for the millions spent by the state on long-term care.
Some in the Legislature and the nursing home industry have inaccurately characterized this common-sense approach as a cut to nursing homes. Even with these proposed changes, the overwhelming majority of nursing homes will receive higher payments from the state, with spending increasing by $594 million from fiscal year 2020 and 2023. Nursing facility rates will increase by 5.2 percent annually, allowing for continued wage increases and improved health insurance benefits for nursing home employees.
The proposed changes would also slow the rate of spending increases. From 2015 to 2023, taxpayer spending on nursing homes is expected to increase by 76 percent, or up to $1.3 billion. Slowing growth would help not only older Minnesotans who receive assistance through public programs, but thousands of private-pay residents who currently pay $95,000 annually for their nursing home care.
In addition, the governor’s budget proposal reduces growth in costs being billed to taxpayers that don’t go to direct care, such as administrative overhead and salaries for top executives. That area of spending has increased by 26 percent in recent years, rapidly outpacing spending growth for services for residents such as dietary, housekeeping and laundry.
Minnesotans have always been generous when it comes to taking care of our parents, grandparents, neighbors and friends as they age. Let’s make sure our money is going for the right things – including to improve quality in the care they receive. Thousands of older Minnesotans are counting on us to make sure that happens.
Lourey is commissioner of the Minnesota Department of Human Services.