Scott Tittle, Managing Director and Head of Government Relations and External Affairs at VIUM Capital, shares implications for the seniors housing industry if the SNF mandate passes.
Senior's lives will be impacted by this rule.
Josh Crisp is a senior living executive with more than 15 years of experience in development, construction, and management of senior living communities across the southeast.Learn More ▶
Lucas McCurdy is the founder of The Bridge Group Construction based in Dallas, Texas. Widely known as “The Senior Living Fan”.Learn More ▶
Let's think about comprehensive ways to really encourage people to come into this industry, to be employed, and to sustain the industry for a long time.
Action is needed to oppose the proposed SNF minimum staffing mandate. Scott Tittle, Managing Director and Head of Government Relations and External Affairs at VIUM Capital, shares implications for the seniors housing industry if the mandate passes.
Listen to Scott on VERSED Podcast.
This episode was recorded at the NIC Fall Conference.
Produced by Solinity Marketing.
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Welcome to season six of Bridge The Gap, a podcast dedicated to informing, educating, and influencing the future of housing and services for seniors. Powered by sponsors Accushield, Aline, NIC MAP Vision, ProCare HR, Hamilton CapTel, Service Master, Patriot Angels, The Bridge Group Construction and Solinity. And produced by Solinity Marketing.
Welcome to Bridge the Gap podcast, the Senior Living podcast with Josh and Lucas here at the NIC Conference. It's a great opportunity to reconnect with new friends and old friends. And we're welcoming back. Scott Tittle to the program Managing Director at VIUM. Welcome to the show.
Hey guys, thanks for having me. Excited to be here today. Thanks.
It's great to see you again. I always look forward to these episodes with you because you have your own podcast that we dip into. Occasionally I get some policy updates but there is a policy change forthcoming in the skilled nursing arena. We wanted to pick your brain about it and see what the impacts are on the overall senior living industry.
Yeah, and thanks for asking about it. because it's really important not only for skilled nursing operators but for everyone involved in continuum of care, senior living, and home health hospitals. Everyone involved in consumer care should be really concerned about this rule because not only for what it could mean for nursing homes and then indirect impacts on all their operations, but also what could be next with this administration. I mean, a clear message needs to be sent this administration that this one-size-fits-all all unfunded mandate for skilled nursing facility is just not acceptable. So I'll talk about it a little minute, but let's talk about some context first, President Biden's State of the Union address last year where we called it the longest 19 seconds in long-term care history, where he actually from the podium on the house floor talked about two proposals he wanted to put forth to address what he called quality of care issues and long-term care.
One of them is a topic we're not going to really talk about today, but I know it's top mind for everyone here, is the focus on private equity ownership in skilled nursing facilities. And HHS has kind of gone on this path to try and create a registry of ownership requirements and report requirements in skilled nursing facilities. The second topic you talked about was creating a national mandated minimum staff ratio for all skilled nursing facilities across the whole country. And we'll get into the details here in a minute, but it's incredibly concerning, none least of which it's an unfunded mandate won't result in one iota improvement of quality care. And it's just completely unrealistic in the labor market crisis we're still experiencing in our sector. So.
Well, Scott, you just threw out a lot of information that we could probably spend the rest of the day talking about. Mandate unfunded. Those don't seem to go very well together. What are the practical implications, because I know a lot of people are talking about this, there's a lot of people that are not in skilled nursing that we're dealing with here at the NIC Conference, but as you said, implications across the spectrum. So break down exactly for our listeners that are hearing this for the first time, what's going on? I'm running an assisted living memory care communities in this part of the country. This doesn't really impact me. Explain why it does.
Contextual point certainly is we're still very much in a labor crisis of long-term care. If you look at the other sectors of healthcare, by and large they've all recovered and improved their labor hiring numbers from pre-COVID, right? Hospitals, physician practices, home health, everybody's kind of pre-COVID levels except for skilled nursing, right? I know AL is doing well and senior living is doing well, but skilled nursing is way below where we were, where the sector was before COVID. So that's kind of the really concerning contextual point, is that even if we agreed that an unfunded mandated national men of staff ratio made sense, the people aren't there to hire to actually make this standard work. And so what the proposal is right now, and I think I want to jump right to the import of this discussion. There's an open comment period right now on a proposed regulation in front of CMS and the window closes on November 6th of next week.
So I'll get to how people can contribute and participate in that. And everyone should be thinking about it. You're skilled nursing operator, owner home health hospital at any level. You're an owner, staff member, family member, or vendor partner, everybody should be submitting comments. The point of the rule put to go forward would be to create a national minimum staff ratio of 3.0 hours per resident per day broken down between nursing and CNA. That standard alone is really concerning, especially in certain markets where the labor market, the labor just isn't there to hire. The second would be is that it actually would mandate that every skilled nursing facility would have to have a nurse on staff 24/7, as you can probably already know with the crisis we're having with the nursing side of our labor market right now, that's just not humanly possible.
So those are the concerns. The penalties are significant. Even the Biden administration indicated that this would cost the sector probably $40 billion over 10 years. We think those numbers are under the American Healthcare Association just put forth a study with Clifton Larson Allen, that the annual cost is probably more like $6.8 billion, just plite even if the people were there to hire, right? This is at a time where census hasn't recovered. On the skilled side census before COVID was probably 82% or so. We're kind of high seventies right now, so let's call it we're 4% under where we were pre-Covid. My former boss and mentor, Mark Parkinson has said every 1% of lost census in the skilled nursing sector is a billion dollars loss in the industry. So we're already about $4 billion under where we were pre-COVID in terms of just census driving revenue that we put on another $6.8 billion cost on top of the loss we're already experiencing. So let's call it $10 billion a year. Where is the industry going to come up with $10 billion a year to make up the shortfall in census and also to hire everyone that's going to be needed if this rule goes forward?
And if I understood correctly, the whole premise of one side of this argument for the mandate was to potentially help quality of care. And that's the argument. But I mean, what do you see wrong with that?
Yeah, certainly. And what's really interesting to ask that, is that even by the Biden administration's own report that they accidentally published on their webpage about a month ago indicated that any level of national standard would not improve quality one iota. The Obama administration looked at this many years ago and they backed away from it. So everyone that has looked at this over the years has decided that this is not the way to improve quality.
I will tell you that certainly what seems to be behind it is an active push by the unions. HHS Secretary Becerra was in front of a union group about three or four weeks ago and actually sank the unions for pushing forward this proposal. They say it's about quality, but it's really not about quality. It's a tip to the unions. It's a potential jobs bill for them.
But again, the people just aren't there to hire. I would say that the skilled nursing facility sector is not against staff ratios. It's just they have to be funded, they have to be reasonable. And let's put forth something like what Florida's done. Let's do some state-by-state approach that makes sense for that market and not a national standard. So I answered the question a couple different ways, which is they say it's about quality, but it's really not about quality. And in effect, if this rule goes forth as is, we're going to see a dramatic drop in quality because what we're going to see is a lot of nursing homes close, that's going to mean that seniors and families in rural parts of the country aren't going to have access to care. Allen study indicated that almost 300,000 seniors will be displaced under this rule because buildings are going to close and they're going to have to go somewhere. Senior's lives will be impacted by this rule.
Wow. So if that's not a case to call, email, or contact everybody you can before November 6th.
November 6th. And let me tell you just one quick pathway that's very easy, remember to go to. If you go to the American Healthcare Association's webpage, that's AHCANCAL.org, AHCANCAL.org, at the top of the webpage, there's a button very convenient that says, act now at HCAs, put forth all the pathways. It's easy for people to put their comments in. It does not have to be a master's thesis. It doesn't have to be perfect. It doesn't even have to be long. It has to be personal. There's no form letter that anyone's going to get when they go to the webpage. Legally, CMS is required to respond to every single unique comment. So we wanted to make sure that people just didn't have sort of a, a cookie-cutter response. It needs to be very personal. It needs to talk. You talk about your facility, how many employees you have, the resident acuity, the experiences you're having in your market with trying to hire people, the impact of COVID on your operational costs side and where you are today, and then why this rule is bad going forward. So again, go to AHCANCAL.org, then it'll just zip right an email right to CMS.
To be really clear, so our listeners that are out there, they're like, "Hey, I'm in whatever state I'm in and I don't deal with skilled nursing. Let's let them fight that battle. This is not my fight for today." If this goes through, what are the implications to your everyday senior living community and in that business state-regulated, for the most part, some of these operators deal at some level, some states have some ratio requirements and things like that that most operators ratios are far better than what the state requires. But what would this potentially do to the senior housing industry that's more of your private pay or potentially not have a skilled nursing component?
I think the most important and maybe immediate direct impact or indirect impact, sorry, that those lines are probably even blurred a little bit, is that Clifton Larson Allen study indicated about 102,000 new people would have to be hired in the skilled nursing sector, even if this rule we're able to go through as is and the money was there to do it right, and the people were there to hire. Well, since we know that people aren't there, unfortunately, those nurses and those CNAs, those frontline staff are going to come from somewhere and they're going to come from the existing components of the other part of the healthcare system. So senior housing, assisted living, hospitals, home health, and I will say the collaboration among all the National Trade Associations, AHCANCAL, Argenti, ASHA, and NIC has been really tremendous during this. And I know there's some combined comments and joint comments that are going in from all the National Trade Associations, including Argenti and ASHA as well. So everyone should be concerned about this and put forth a comment.
Lucas, even I can understand this, you're increasing cost. You're not improving quality, you're decreasing accessibility. What is it here? What do we need to do? What do our listeners need to do? It sounds like the industry needs to take some action here. And it sounds like that there is an alignment between the industry trades and associations that are moving forward on this. So for our listeners, just scroll down. You can see in our show notes, we'll have a link directly to what Scott is just informing you on, and you can take that action now to help participate and have your voice heard on an issue like this.
Yeah, and I'll add one more pathway too that people might be able to participate, which is, you know, I've been to DC several times over the last year with skilled nursing facility operators, meeting with members of Congress and staff. They need to understand, the staff needs to understand why this is so concerning and what the Biden administration is trying to put forth here. So contact your senators and house members. There's a hearing this week actually on Capitol Hill about this rule. There's several members of Congress, especially senior Democrats on the Senate side that have contacted the Biden administration sharing their concerns about this rule going forward. And kind of the whole theme here is don't do this rule. It's, it's not going to improve quality. It's only going to hamper the ability to receive this wave of baby boomers coming through skilled nursing facilities and senior housing here in 2025.
And after. If you do do it, phase it out a long period of time. Let's let the labor markets correct itself and let's get past all these COVID operational expenses and let's make sure that we are thinking about other ways to help the workforce needs going forward. My former colleague and friend Cliff Porter at ACHANCAL had a great phrase last week. I saw a panel he's on, he said, "Let's think about a new deal for a long-term care employment needs going forward". Wouldn't that be really special? Wouldn't it be incredible if we had some leadership in DC let's say a presidential candidate or a current presidential administration say, Hey, instead of creating this unfunded mandate and punishing, let's be helpful. Let's think about comprehensive ways to really encourage people to come into this industry, to be employed to sustain industry for a long time.
Let's think about comprehensive, a racial reform. We all heard speaker, former speaker, Paul Ryan this morning talk about as a free market guy he's interested in meaningful immigration reform. That's the only way we're going to help the economy overall going forward and help healthcare as well. Think about new technologies, a way to enhance existing positions on the depth chart in our facilities. And also think about new ways to serve seniors in the future. I love what Cliff said. Let's think about a new deal for employment in healthcare going forward. That'd be really exciting.
Well, Lucas, I am so excited we get to sit down on a regular basis with guys like Scott and what an awesome opportunity our industry has. And I so appreciate the effort that you give all the guys and girls over at VIUM investing so much of their time, put forth the effort, educate us and also if people don't know, you've got a great podcast yourself where you dive into these issues all the time, right?
We do. Yeah. And thanks so much. And you guys have been great supporters of me in helping as I've gotten started this kind of very much feel like a rookie still in the podcast world. I joke podcasting is kind of like water skiing, just gotta get behind the boat and do it, right? You learn something every time. You get better every time. And I think that's been a real blessing and we've had a lot of fun with it this year. We've been focused all on value-based care and thinking about what the ISNIP world looks like for skilled nursing facilities and assisted living facilities. So I really appreciate your guys' support Bridge The Gap is an awesome podcast. I kind of put you guys up on a pedestal. This is where I want to be someday, but I really appreciate the support you guys have provided me.
Absolutely, very kind. Appreciate your time, Scott. And for our listeners, again, go back to the show notes. You can connect with Scott's podcast there and the issues of this mandate. If you want more content, go to btgvoice.com, access all of our content, our shows, and our socials, so you can connect with us there. We want to hear from you. Thanks for listening to another great episode of Bridge the Gap.
Thanks for listening to Bridge The Gap podcast with Josh and Lucas. Connect with the BTG network team and use your voice to influence the industry by connecting with us at btgvoice.com.