As pandemic-era funding runs dry, many rural nursing homes are closing -- a loss for families and local economies

Bloomberg map, from CMS and Census Bureau data

Amid increasing medical costs, depopulation and a national nursing shortage, hundreds of rural nursing homes are closing, leaving economic losses and care deserts behind, reports Lauren Coleman-Lochner and Martin Z. Braun of Bloomberg. "Across the country, almost 690 nursing homes have shut their doors since 2020, according to the Centers for Medicare & Medicaid Services. The American Health Care Association, an industry trade group, expects the number to keep ticking up in the coming years because of a combination of rising labor costs, falling enrollments and government reimbursements that fall far short of paying the bills."

Many rural places already face depopulation and staffing shortages across several sectors, so the struggles for a small long-term care facility are amplified. "America's elder-care deficit is particularly acute in the Midwest and parts of the South, where a larger portion of the population age 65 and older resides in rural counties; in North Dakota, it's 46%, double the average nationwide, according to Census Bureau data," Coleman-Lochner and Braun write. Residents in these regions face further stress because finding a new nursing home, which may be hundreds of miles away, "causes families to splinter and can become yet another contributor to depopulation."

In smaller towns, a care facility is often the largest employer, so when it closes, the economic domino effect begins with job losses and trickles down. When a long-term care facility closed in Mott, North Dakota, pop. 700, "Business at the town's drugstore dropped 40% . . . , according to owner Chuck Oien. His wife's grocery store also saw a decline," Bloomberg reports, "as did restaurants and hotels that catered to out-of-town family members when they visited."

The pandemic "didn't cause the troubles at hundreds of U.S. nursing homes, but it sure didn't help," Bloomberg reports. "The number of workers in nursing homes and residential-care facilities dropped by 210,000 between February 2020 and June 2023, according to the Bureau of Labor Statistics, as nurses and caretakers sickened or quit, feeling burned out. CMS estimates that nursing homes lose more than half their workers each year. . . .The federal aid directed at hospitals and nursing homes during the early part of the pandemic temporarily covered up the fundamental problems with the industry's economics, says Kelly Arduino, head of the healthcare practice at advisory firm Wipfli. With government assistance winding down, there will be more financial distress and closures." Arduino told Bloomberg: "It's only going to get worse. We all see it coming. We don't see a mechanism for how to fix it."