The system of public-private partnerships for generating capital is failing the skilled nursing sector, according to the findings of a newly released research paper commissioned by the National Investment Center for Seniors Housing & Care and written by ATI Advisory.
Private investment historically has provided the capital to build nursing homes, and state and federal governments have offered daily operational support via reimbursement mechanisms, which are bound by regulation regarding how these payments are used, according to the report.
“The current nursing home industry is struggling as it is increasingly serving a more complex patient population, facing a continuing staffing crisis which could become more difficult with new staffing mandates, and continuing to struggle with reimbursement as a result of growing Medicare Advantage penetration and value-based payment models,” Bill Kauffman, senior principal at NIC, wrote in a blog Thursday.
Policy changes over time have resulted in operators seeking alternative sources of capital. According to ATI Advisory, the public-private partnership system needs to be reinvented. The system was intended to draw in private capital to develop infrastructure for skilled nursing facilities to operate, but it has not evolved to meet the needs of an aging population and budget constraints, according to the report.
The solution, ATI said, is to encourage private capital sources to invest in modernization of existing infrastructure or operational improvements that would drive quality care for residents and patients by supporting frontline staff.
“For public-private partnerships to succeed, the system needs to encourage much-needed innovation that would improve facilities and their operations for patients and staff,” Kauffman said.
