Nursing homes are closing. What should we do?

An interesting article on the Marketplace Morning Report last week dives into the topic.

Hundreds of nursing homes around the country have shut down leaving states to deal with what to do with people who need long term care…In Massachusetts, lawmakers have extended a $50 million lifeline to keep some nursing homes open.

One nursing home owner interviewed stated:

“Business is the hardest its been since I’ve been in it for 40 years. I have seen ups and downs. But the challenge right now is the most difficult.”

The key issue is prices. Medicaid is not paying enough to cover the costs of housing, feeding, and treating individuals that need long-term care. One trade group claims that the $50 million “lifeline” lawmakers are proposing needs to be six times higher to cover costs.

Regardless of correct number, this is certainly one of the issues with a single payer system. Single payer systems solve the coverage problem. However, if they don’t get prices right, providers will exit and patients may have coverage for services (e.g., nursing homes) for which they are not actually able to find providers.

Regardless of what health care system we have, we need to get the prices right. As stated by Anderson et al. (2003), “It’s the prices, stupid”.