A lack of capacity in nursing homes is hurting hospitals’ ability to discharge their patients, giving rise to steadily increasing lengths of stay and stressing systems as they attempt to navigate a precarious operational environment coming out of the COVID-19 pandemic.
A Healthcare Dive review of recent financial filings found that even as overall inpatient admissions fell, large hospital operators reported longer lengths of stay, along with difficulties discharging patients, compared to prior years. That trend was evident across both nonprofit and for-profit operators, and contributed to waning operational income for many systems.
“What we’re seeing is more organizations have inpatient discharges that are below what the pre-pandemic level was, but the patient days they’re staying is not depressed,” said Erik Swanson, senior vice president of data analytics at Kaufman Hall. “We’ve seen continual growth in length of stay since the beginning of the pandemic up to now.”
Providence, Intermountain, Sutter, Mass General Brigham and Advocate Aurora — all large nonprofits — are among the systems that reported higher lengths of stay and lower discharges this summer compared to 2021.
Longer lengths of stay are contributing to some of the worst hospital margins seen since the beginning of the pandemic and a deteriorating sector outlook from ratings agencies.
That’s in part because Medicare, which covers a large part of the inpatient population, generally pays for an inpatient’s hospital stay by a diagnostic-related group (DRG), or one fixed amount based on their diagnosis and severity — regardless of how long they’re in the hospital. Other private payers often pay a flat rate as well for certain expensive inpatient stays, such as bundled payment models for total joint replacements or heart attacks.
As a result, the longer a patient stays, the higher the cost to the hospital, said Rick Gundling, senior vice president of healthcare financial practices for the Healthcare Financial Management Association.
“They generally lose money anyway, it just widens the loss,” Gundling said.
A ‘massive and urgent’ need for labor
A number of facilities said the increasing length of stay was due to problems discharging patients to other care settings. Roughly 12% of all inpatients are discharged to some form of long-term care facility like nursing homes, which were already stressed before the COVID-19 pandemic. But the pandemic’s operational pressures walloped the cash-strapped facilities, leading to a spate of resident deaths, staff shortages and closures.
Providence, one of the largest nonprofits in the U.S., said discharges to skilled nursing facilities have proved most challenging, especially in states with chronic deficiencies in available beds that’s now compounded by a declining workforce.
That’s creating a backlog in acute care — Providence had an average length of stay of 5.85 days in the first six months of the year, compared to 5.62 days in 2021.
“We feel this problem requires some level of intervention by state and federal authorities to create the necessary relief in service to our communities. The need is massive and urgent,” a spokesperson for the system said.
As of August, nursing home employment was down 10% from its peak in January 2020, before the COVID-19 pandemic hit the U.S., according to Bureau of Labor Statistics data.
That’s a large decline compared to the labor recovery seen in other sectors. Hospital jobs are just a shade below pre-pandemic levels, while employment in physician offices and the ambulatory care and home health sectors have bounced back and are even outperforming overall private sector employment, according to a Center for Health Workforce Studies analysis of government data.
Nursing home workforce recovery lags behind that of peers
“There’s no beds. Or no staff — even if there is a bed, there may be no staff. So hospitals can’t discharge,” Gundling said.
There’s a variety of reasons that nursing homes — especially skilled nursing facilities — have seen a downward trend in employment, said Bianca Frogner, director of the Center for Health Workforce Studies at the University of Washington.
The larger movement toward home- and community-based services is shifting business away from traditional post-acute care settings, and the spread of COVID-19 in nursing homes during the pandemic raised alarms about safety and security at facilities, according to Frogner. In addition, nursing homes have difficulty raising wages, especially those that rely heavily on fixed Medicaid dollars.
And much of their workforce, including nursing assistants, receive low pay and often are without health insurance or sick leave. Those employees may have elected to stay at home during the pandemic over fears of contracting COVID-19, or leave entirely, enticed by higher paying jobs in other industries like retail or food service, Frogner said.
Anything that exacerbates staff turnover at nursing homes is a problem, according to experts. Even before the pandemic, the turnover rate for registered nurses and certified nursing assistants was 141% and 130%, respectively, according to research.
Lack of workers at post-acute sites of care trickles upstream and affects hospital staffing as well.
"I wish that there was a bit of recognition that what is happening in one healthcare setting is really a kind of cascading effect that’s happening across the healthcare system."
University of Washington School of Public Health professor
The inability to take on patients being discharged from hospitals means hospitals have longer patient stays, which burdens hospital staff who now have to take on an increased patient load, Frogner said.
Hospitals have also struggled to hire and retain staff during the COVID-19 pandemic — many were forced to turn to high-cost travel nurses to fill in gaps.
“That is a potential pretty significant relationship to the staffing issues that hospitals are facing” — and one that is likely to continue as workers have attractive job options outside of healthcare and without significant investments or changes in how nursing home pay is structured, Frogner said. “I wish that there was a bit of recognition that what is happening in one healthcare setting is really a kind of cascading effect that’s happening across the healthcare system, and that many places are really interconnected more than people realize.”
Delayed care, authorization holdups and more
Other factors are also contributing to elongated patient lengths of stay.
During COVID-19, one in three adults put off non-emergent care, worsening health conditions and giving rise to complications. Many patients now need higher acuity care, experts said.
The Mayo Clinic in August said it was operating “at near capacity” due to its increase in patient days, which were up 7.6% from 2021 in the first six months of the year. The academic medical center chalked it up to capacity constraints as well as a “changing mix” of hospital patients needing to stay longer.
Sicker patients staying longer tend to require more costly resources, like specialty pharmaceuticals. And the cost of those resources has increased due to supply chain issues, rising drug costs and inflation, which exacerbates the issue, according to Healthcare Financial Management’s Gundling. Hospitals are spending 6% more on supplies and 5% more on drugs than in 2020.
In addition, many older patients have moved to Medicare Advantage plans, which currently cover almost half of the entire Medicare population. It can take a few days for hospitals to hear back from plan administrators on whether they’re authorized to discharge patients to other post-acute services. That extends days spent in the hospital, said Kaufman Hall length-of-stay expert Brian Pisarsky.
The roughly three-fourths of patients who are discharged home also face bottlenecks. Hospitals are facing shortages of durable medical equipment, like oxygen tanks or walkers, that patients may need in order to manage their followup care at home, Pisarsky said.
As a result, facilities have to wait to discharge until they receive the needed durable medical equipment.
How hospitals can help
Overall, experts don’t expect larger headwinds to ease up, absent significant investments in the healthcare workforce — but that doesn’t mean hospitals are entirely devoid of interventions to ensure they’re able to staff crowded beds.
Beyond offering higher wages to attract workers to manage patients who are staying longer, hospitals could propose benefits such as paying for school tuition, paid sick leave, subsidized transportation and more training opportunities, according to Frogner.
Hospitals might balk at spending extra money on these benefits, but are likely to save money down the line by keeping workers on board, Frogner added.
“You can turn on the TV and watch a commercial from Amazon that advertises all these additional benefits, other than pay, that they offer their workers. I don’t know the last time I’ve seen — or if I’ve ever seen — a hospital or a nursing home advertise those same things,” Frogner said.
In addition, hospitals should begin discharge planning earlier, so that when a patient is ready to leave the facility a plan is already in place, Pisarsky said.
That means referring asks for any post-acute care approvals to insurance companies earlier; taking steps like multidisciplinary rounding or observation huddles multiple times a day to ensure a care team is on the same page about patient needs; shoring up post-acute provider partnerships and just generally being proactive about the day-to-day blocking and tackling of patients, according to Pisarsky.
Hospitals can also take steps like adopting better models of team-based care, streamlining efficiencies around health IT usage to cut down on click fatigue, automating route tasks with artificial intelligence or robotics and revisiting CEO compensation to free up more dollars. All options should be on the table to ease the growing bottleneck of patients, freeing up staff and dollars to provide better patient care, experts said.
Otherwise, “this ripple effect can really tear through a hospital quickly and jam everything up,” warned Kaufman Hall’s Swanson.