Steady increases in licensed practical nurse and certified nursing assistant hours per resident day in skilled nursing after REIT acquisition could mean that there is some kind of “substitution effect” taking place, where facilities are substituting more expensive skilled labor for less skilled, inexpensive labor, according to David Stevenson, PhD, a professor of health policy at the Vanderbilt University School of Medicine, and R. Tyler Braun, PhD, an assistant professor of population health sciences at Weill Cornell Medical College.
The researchers spoke with LeadingAge members Monday to share their findings, published in Health Affairs, based on their use of a novel database of REIT investments in the United States, which they used to compare caregiver staffing in nursing homes in which REITs were and were not invested in.
Occupancy rates didn’t differ substantially in facilities that were acquired by REITs versus in for-profit skilled nursing facilities that never were acquired by REITs, they found. Most of the facilities that were acquired by REITs were affiliated with chains, according to Braun.
Facilities acquired by REITs, Braun said, had approximately six fewer beds, on average, than did facilities not owned by REITs. No differences were seen as far as resident acuity, race or ethnicity, he said.
“What’s most striking is, [REITs] targeted facilities that had a higher proportion of Medicare patients and less Medicaid patients,” Braun said, adding that the REIT-owned facilities also had “slightly more hours RN per resident per day.”
“What we see is on the aggregate [is] increases of about 2.15% in licensed practical nurse hours per resident, and then we see about a 1.55% increase in hours per day for certified nursing assistants, and then we see about a 3.31% decrease for registered nurses,” he said.
He noted that those numbers were not significant in the aggregate, but “if you were to actually extrapolate that out by year and look at the changes by year and not just in a pre/post period, it can actually get a little more telling. And what we see is that years two and three after acquisition, we see decreases of about 6.25%.”
The steady increases in licensed practice nurse and certified nursing assistant hours per resident day after REIT acquisition could mean that there is some kind of “substitution effect” taking place, where facilities are substituting more expensive skilled labor for less skilled, inexpensive labor.
“After excluding the largest acquisitions, we can see that nursing homes had, on average, about a 6.25% per resident day decrease in staffing following reinvestment, [by a REIT],” Braun said. “So this may suggest that larger deals are more likely to increase LPN and CNA staffing.”
REITs need more study
But REITs and their role in the nursing home sector have been understudied, according to the researchers.
“It’s not only about transparency for the sake of transparency, but it helps to see where payments are going. It helps to understand finances better,” Stevenson said. “In addition, it also helps understand accountability to be able to look at trends. This is the first paper that did it, but others need to follow, potentially looking at other outcomes.” Having a common database of REIT investments can help facilitate investments, he said, “but also just having a greater sense of the parameters in this area, just to understand it better. Not only with policymakers, but researchers and providers alike could all benefit from that.”
