The long-term care landscape had been facing significant challenges well before the pandemic hit, only to experience even more disruption amid COVID-19. A new analysis conducted by the American Health Care Association and the National Center for Assisted Living (AHCA/NCAL) estimates that the long-term care industry is expected to lose $94 billion over a two-year period ending in 2021. The organization noted that, from increased routine testing to hiring additional staff and purchasing personal protective equipment (PPE), providers have dedicated extensive resources to fight the pandemic. These additional costs have magnified the financial shortfalls facilities faced for years prior to the pandemic, and now many are at risk of shutting down for good, according to the analysis.
In addition to increased expenditures, long-term care facilities have also suffered a sharp decline in occupancy. In an interview with McKnight’s Senior Living, AHCA/NCAL President and CEO Mark Parkinson said, “In three short months, we’ve gone from 71% to 67%…We need census to recover at a rate of about one percent a month, and while that doesn’t sound like a lot, it’s not as easy as it might seem … If the census doesn’t recover at all, or recovers slower than that, the sector has a real problem.”
The pandemic also resulted in many patients in skilled nursing homes to be sent home for care in order to avoid the enhanced COVID-19 risk found in congregate living settings. This has caused many, including the Biden administration, to reexamine care for these patients moving forward. As part of the administration’s $2 trillion infrastructure proposal $400 billion is allocated to substantially expanding coverage of home- and community-based services (HCBS).
Aftermath of COVID-19 on Residents, Staff
Other challenges being faced by senior care facilities is the emotional toll COVID-19 has taken on residents. The Centers for Disease Control and Prevention (CDC) found that more than 40% of Americans had anxiety and depression, symptoms of trauma, more thoughts of suicide and were abusing drugs and alcohol. This is worse for long-term residents who for more than a year have been isolated and confined to their rooms with no exercise, no visitors and limited access to the outdoors and fresh air.
It’s therefore important for staff to be alert to cues indicating issues that residents may be experiencing, looking for signs of diminished engagement. Staff training can help to re-engage residents.
Of course, it’s not only the residents who have had to cope with emotional health issues. The pandemic has also taken a toll on staff, who have had to work long hours, treat patients, and quarantine from family members. Facilities are looking to provide their staffs with access to confidential mental health counseling (including via telehealth) and resources through their Employee Assistance Programs (EAPs).
A Hard Insurance Market
On the insurance side, the senior care marketplace has been “hardening” for the last few years, with increased General Liability, Professional Liability and Excess Liability insurance rates, capacity shortages and coverage retrenchments. The pandemic further complicated this with some insurers exiting the market while others have imposed moratoriums on new business or asked for higher retention levels, reducing limits and/or mandating COVID-19 exclusions in their coverage forms. All signs point to continued rate increases throughout 2021.
As a result, it’s important for agents and brokers to meet with insureds well ahead of the renewal to discuss risk-mitigation strategies and protocols, prepare them for increased rates and coverage changes, and ensure that the information provided to carriers is accurate and reflects changes at their facilities caused by COVID-19.
This last year has been transformative and challenging but it also offers opportunities for the long-term care industry to reflect and make changes to implement stronger risk management protocols to mitigate losses, keep residents safer, help get control of insurance costs, and increase census through the steps that management takes to gain consumer confidence.
Manchester Specialty Programs specializes in providing agents and brokers with totally integrated business insurance solutions to meet the needs of Home Care, Allied Health and Human/Social Services organizations. For more information about how our products and services can help protect your insureds, please contact us at 855.972.9399.
Sources: Healthcare Innovation, McKnight’s Senior Living, Willis Towers Watson, Skilled Nursing News