Nursing homes experienced unprecedented financial challenges during the COVID-19 pandemic, raising concerns about a potential increase in nursing home closures. The COVID-19 pandemic resulted in lower occupancy rates and revenue in nursing homes, raised operating costs with new expenditures on personal protective equipment, cleaning supplies, and COVID-19 tests, and exacerbated existing staffing shortages, resulting in increased costs to attract and retain workers. We conducted this study to understand the impact of COVID-19 pandemic on nursing home closures and found that closures did not increase during 2020 and 2021. There is, however, some evidence that nursing homes that were more impacted by COVID-19 were more likely to close. Nursing home characteristics associated with higher likelihood of closure included size, occupancy rate, and percentage of residents with Medicare as the primary payer. Explanations for the absence of additional closures during 2020 and 2021 include several strategies by nursing home providers to mitigate staffing shortages, including freezing admissions and closing portions of facilities, and federal and state financial assistance to nursing homes that likely prevented or delayed closure.
This research was conducted under contract #HHSP233201500039I between HHS/ASPE’s Office of Behavioral Health, Disability, and Aging Policy (BHDAP) and Research Triangle Institute. Additional research in this area is available at the ASPE Aging & Disability page and the ASPE COVID-19 page.
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