Raising the wages of nursing home caregivers is smart.

Trusting nursing homes with even more hundreds of millions of taxpayer dollars is dumb.

On March 2, 2022, the California Association of Health Facilities (CAHF) – a trade group representing nursing home operators – announced a legislative proposal for California to fund a living wage for certified nursing assistants (CNAs). Named “The Drive to $25,” the proposal would establish a CNA minimum wage that would grow to $25 in the next three years. The proposal calls for Medi-Cal to pay for two thirds of this wage increase via wage pass-throughs at an annual cost to Medi-Cal of about a half-billion dollars.

Two days earlier, the White House announced a crack-down on nursing home “bad actors.”

The uncommonly blunt statement called out nursing homes for widespread violations and substandard care that have harmed residents and caused tragic impacts before and during the pandemic. It points out that dangerously unsafe conditions exist in nursing homes despite tens of billions of federal taxpayer dollars flowing to nursing homes each year.

CAHF’s proposal ignores the White House announcement, the nursing home industry’s exceedingly troubled history, and chronic ownership scandals in California. It is fair to ask why California should put its financial trust in unscrupulous chain operators and send even more corporate welfare to facilities that so often jeopardize the lives of their residents.

There are many more serious questions about the CAHF proposal.

1. Who is responsible for low CNA wages?

It’s not the State.  Nursing home chains and other owners set wages for their workers and are responsible for the abysmally low wages and benefits that exist today. CNAs have always deserved a living wage. But for decades operators have fought long and hard to avoid paying them one.

Operators ignore their existing commitments to pay decent wages. SNF Medi-Cal rates more than doubled under an industry-designed rate system enacted in 2004 known as AB 1629. Advancing decent wages is a stated purpose of that law, which funneled billions and billions of dollars to nursing home operators. Yet some California nursing home chains slashed staffing and wages after it took effect and used the new funds to increase profits.

Nursing home owners divert over a billion dollars to themselves rather than pay decent wages. California nursing home owners pay themselves over a billion dollars a year through related parties to hide and pad profits. Those funds should be un-diverted and used to increase staffing levels and to fund living wages now.

Nursing homes received tens of billions of dollars in government COVID-19 relief funds. The additional funds nursing homes received are so extensive they are difficult to catalog. The public does not know how this money was used.

2. Will this plan crowd out programs and caregivers that keep people out of nursing homes?

Sending more money to nursing homes while ignoring in-home and community-based options is not in keeping with Californians’ preferences on long term care.Most people who need long term care prefer to receive it at home. Government programs already pay California nursing home operators over $10 billion per year. In-home caregivers and staff members at assisted living facilities deserve living wages too. Singling out nursing home CNAs is certain to cause unintended consequences.

3. Why is the plan missing a minimum staffing requirement?

The plan calls instead for a study on staffing, a poorly disguised stalling tactic. California’s minimum staffing requirements are far below levels needed to meet the needs of residents from twenty years ago. CAHF’s plan would raise wages but would not prevent operators from slashing staffing and pocketing the savings. Nursing home care will not improve and residents will continue to suffer neglect until operators hire and maintain enough staff to meet residents’ needs. It is not “Real Reform” to skip the most important ingredient.

4. Who would want to work in an unsafe working environment?

Fair wages are critically important but they are not the only factor that matters to workers.

California’s overburdened nursing home workforce will not stabilize until the often-terrible working conditions improve in facilities.

5. What does CAHF mean that operators would use “facility funds” to cover about a third of the wage increase?

These are taxpayer funds, mostly from the Medicare program. As CAHF acknowledges, nursing homes rely almost completely on government funds. The proposal does not appear to include ownership investment in the wage increase.

6. Why are nursing homes completely dependent on government programs?

CAHF’s proposal acknowledges that “skilled nursing facilities (SNFs) in California are almost 100 percent government funded.” The fact that no one other than the government buys their product reflects the public’s fear of substandard nursing homes and strong desire to stay out of them. California’s nursing home population is shrinking despite the rapidly aging population.

7. Should California be “partners” with the nursing home industry?

CAHF describes nursing homes’ relationship with the government as a partnership, but should it be? Although nursing home owners are virtual wards of the state due to their financial dependence, profiteering operators do not act like partners. They hide behind extraordinarily complex ownership structures, engage in a tremendous churn in chain ownership that is harmful to residents, routinely put profits before care, blame the State for their own failures and sue the state constantly to defeat any efforts to hold them accountable. Californians are poorly served by this partnership.

California has been down this road before with the nursing home industry.  The industry cries out for more money and promises better care.  Well, the State’s expenditures to nursing homes are at an all-time high – and consumer complaints about nursing home care are too.

Funding wage increases for CNAs is a good idea but only if we:

  • Ensure all additional spending goes to staff and does not further enrich owners;
  • Increase the state’s minimum staffing standard to 4.1 hours of direct care per resident per day, eliminate all minimum staffing waivers, and hold nursing home operators accountable through strong enforcement of the staffing and wage requirements;
  • Tie all future Medi-Cal nursing home rate increases directly to staffing and wage increases;
  • Require a registered nurse in all nursing homes, 24 hours a day;
  • Enhance working conditions and training and certification opportunities for CNAs.
  • Raise wages for IHSS workers and provide greater financial support for home and community based services.
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