Nursing shortages adding to issues at Connecticut’s nursing homes and driving up healthcare costs

CT Insider – Friday, January 3, 2025
By Liese Klein

Up to 157 members of the nursing staff are set to lose their jobs in March if Bristol’s Sheriden Woods nursing home closes as planned, along with 102 members of the nursing staff at nearby Countryside Manor, also slated to shut down.

Yet the difficulty of hiring nurses played a major role in the announced closure of the two skilled nursing facilities, both owned by Athena Health Care Systems of Farmington.

“A combination of environmental factors — staffing challenges, facility maintenance needs and rising operational costs — made it impossible to continue operating both facilities consistent with our high standards for care,” Athena officials said in a statement on Monday.

The final closure of the two nursing homes is pending state approval. Athena Health Care Systems, which once owned 21 facilities in Connecticut, will be running only six in the state if the Bristol homes are approved to shut down.

An ongoing shortage of registered nurses, licensed practical nurses and nurse assistants is adding to the financial stress on Connecticut’s nursing homes and driving up health care costs, said Matt Barrett, president and CEO of the Connecticut Association of Health Care Facilities.

Because of staffing shortages, nursing homes turn to temporary nurse staffing agencies “charging fees that far exceed what’s funded in (homes’) state Medicaid rates,” Barrett said.

Since more than 70% of Connecticut nursing home residents rely on Medicaid to pay for their care, operators are losing money and unable to admit additional patients, which ends up costing the state even more money as those patients remain in pricey hospital beds.

“This dynamic is causing financial instability in parts of the sector and costing the state Medicaid program and the operators considerably more than state budgeted amounts,” Barrett said.

Labor shortages hurt hospital bottom lines

Hospitals, for their part, are also struggling with labor shortages even as the worst of pandemic shortages have eased.

“We are seeing some recovery post-pandemic here in Connecticut, as well as nationally, but we still have really significant concerning trends and challenges around workforce and capacity constraints,” Connecticut Hospital Association CEO Jennifer Jackson said at a Dec. 18 event on hospital finances.

Expenses at Connecticut’s hospitals grew by $1 billion in fiscal 2023, the most recent data available, according to a report commissioned by the hospital group, adding to financial strains and increasing operating losses. Hospital labor costs grew by 4.4% in the state, outpacing the regional average of 2.9% and the national average of 1.8%.

Yale New Haven Health President Pamela Sutton-Wallace outlined the problem at the Dec. 18 event: Hospitals and other health care businesses can’t pay enough to workers who live in Connecticut to offset rising prices in the state.

“Some of the challenges we hear from our current employees is the cost of living,” Sutton-Wallace said. “That reinforces the workforce challenges, which exacerbates the access issue, which exacerbates the profitability of hospitals and health systems.”

The labor shortages in hospitals is also expanding beyond nurses to include workers like radiation technologists and respiratory therapists, Sutton-Wallace said. “We find ourselves having to use travelers and or temporary resources to support care,” she said.

Nursing homes seek state wage boost

Nursing homes are looking to state lawmakers to boost wages and benefits for workers through Medicaid changes in 2025, Barrett said. The industry is also advocating for a cap on fees for temporary nurse staffing agencies.

The average annual salary for nursing assistants in Connecticut is $35,995 and starts at $86,505 for registered nurses working at nursing homes, according to ZipRecruiter. With improved Medicaid reimbursements, nursing homes can afford to pay more to attract workers, according to the industry.

“State policy makers must stay focused on the economics of the staffing issue,” Barrett said. “These policy measures will help address the staffing shortages and the financial instability that goes along with the shortages.”

Nursing homes nationwide lost nearly 250,000 caregivers during the pandemic, and the industry continues to face staffing issues even as the population ages, Barrett said.

“Nursing homes are still struggling to recover while nearly every other health care sector has rebounded or gained jobs,” Barrett said “This situation is improving but Connecticut nursing homes still need thousands of workers to return to pre-pandemic levels.”

Worker shortages resulted in 7.2% of Connecticut nursing homes limiting admissions or temporarily closing wings in 2023, according to a Department of Social Services report issued in June.

The pressure of labor costs and higher expenses is taking a toll on the industry, as 15 nursing homes have closed in Connecticut since 2021. Occupancy at Connecticut nursing homes was 87.32% in October, higher than the national average of 80%, according to the Department of Social Services. The occupancy rates reflect high demand for nursing home beds in the state as the sector as a whole continues to lag behind pre-pandemic occupancy rates, Barrett said.

“As a practical matter there are very few open nursing homes beds open in Connecticut today and this should signal to policy makers that access could be a major issue in Connecticut if more nursing homes close,” Barrett said. “This could be very disruptive to our overall health care system if there is limited access to nursing home beds when hospitals need to discharge patients. If this dynamic continues, the overall health care system is in trouble.”

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