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Nursing Homes


Nursing facilities, commonly called nursing homes, serve a small percentage of older adults. These facilities continue to be in the public-policy spotlight because of efforts to redefine their position in the long-term care system and because of ongoing efforts to enhance the quality of care they provide to their residents. Nursing facilities are defined here as facilities with three or more beds that routinely provide twenty-four-hour nursing care services to sick or disabled individuals; they may be certified by Medicare or Medicaid or licensed by the state as a nursing facility, and they may be freestanding or part of a larger facility. There are four major characteristics of nursing facilities: (1) facility characteristics, (2) resident characteristics, (3) financial characteristics, and (4) administration and staffing characteristics.

Facility characteristics

A nursing facility (NF) is a facility that has met Medicaid certification requirements. A skilled nursing facility (SNF) is one that has met Medicare certification requirements. Facilities that are part of hospitals and intermediate-care facilities for the mentally retarded (ICF-MR) are not included in this discussion.

In 1998, there were about 17,000 nursing facilities containing approximately 1.8 million beds and 1.6 million elderly and disabled residents in the United States. Six statesCalifornia, Illinois, New York, Ohio, Pennsylvania, and Texasaccounted for 37 percent of all nursing-facility beds (over 640,000 beds). Texas had the most nursing-facility beds (122,365). The total number of nursing facilities (and the number of licensed beds) fell slightly between 1998 and 1999. Nationwide, there were 49.7 beds per 1,000 persons age sixty-five or older in 1999, a drop of 4.2 percent from 51.9 beds in 1998. The average size of a nursing facility in 1997 was 107 beds. For the thirty-three largest chain-owned facilities, the average number of beds per facility in 1999 was 109, which was a 5.1 percent drop from the average of 115 beds in 1998.

Data from the 1997 National Nursing Home Survey revealed that approximately 77 percent of all facilities and 84 percent of all beds are certified by both Medicare and Medicaid. In 1997 the occupancy rate in all nursing facilities was about 88 percent, which is 5 to 10 percent, less than during the early 1990s. According to Manton and Gu, "there was a large absolute decline (415,000 persons) in the institutional population 1994 to 1999" (p. 3). Over 66 percent of the facilities are located in the Midwest and southern regions of the nation, and about 61 percent of the facilities are located in metropolitan areas.

The majority of nursing-facility beds in 1997 were owned by for-profit organizations (67 percent), followed by not-for-profit organizations (26.1 percent), with government-owned homes accounting for about 8 percent of all facilities. The consolidation of the nursing-home industry is reflected by the fact that between 1998 and 1999 the number of licensed beds in the nation's thirty-three largest nursing facility chains increased by almost 2 percent. These chains owned approximately 27 percent of all beds nationwide in 2000 with about 56 percent of all nursing homes in the United States being part of a chain.

A significant change in nursing facilities has been the addition of what has been called special care or subacute care units within nursing facilities. These units "have emerged in an effort to meet the needs of subgroups of residents such as those with Alzheimer's disease or with relatively short-term post-acute needs" (Wunderlich and Kohler, p. 22). The number of dementia-specific special care units has also grown and "as of 1996, nearly one in four nursing homes had at least one organized dementia care unit, wing, or program" (NIA, p. 41). As a result of this growth, the Centers for Medicare and Medicaid Services (CMS) now track information on special units for residents with Alzheimer's disease. In addition, the Alzheimer's Association has developed specific guidelines for special care units (SCUs) and the Joint Commission of Accreditation of Healthcare Organizations has developed SCU standards. These types of units continue to be viewed by operators, staff, and family members as a better alternative to traditional nursing-facility care. Because of the lack of a standard definition for SCUs, the National Institute on Aging has supported a number of projects to examine the nature and effectiveness of these units. One of the significant outcomes of this research has been the development and testing of a method for classifying SCUs, which has allowed for a more effective comparison of the care provided across different types of SCUs.

Resident characteristics

One established fact about older adults is that in general they are living longer and healthier lives. There has also been an increasing availability of alternatives to nursing facilities (e.g., assisted living) and an increased use of community-based services (e.g., home health care), with the result that the profile of the "typical" nursing facility resident has changed in significant ways since 1985. There are now three older women for every older man in nursing facilities. This ratio has not changed since 1985, but the percentage of white residents declined from 93 percent in 1985 to 89 percent in 1997. It is very common for women to be widowed at the time of admission. Persons sixty-five years and older using a nursing facility in 1997 had an average age at admission of 82.6 compared to 81.1 in 1985. A common approach used by health care providers to measure functional ability in older adults is activities of daily living (ADLs). This method consists of measuring changes in the person's ability to perform six ADLs. ADLs include such functions as bathing, dressing, and eating. The mean number of ADLs that nursing facility residents experienced difficulty in increased from 3.8 in 1985 to 4.4 in 1997 (Sahyoun et al.; Wunderlich and Kohler). The four ADLs that nursing facility residents receive the most assistance with are bathing (96 percent of residents), dressing (87 percent), toileting (56 percent), and eating (45 percent). Approximately 50 percent of nursing facility residents are over the age of 85. Because of these increases in levels of disability (which have lead to much higher levels of frailty) and the trend towards entering the facility later, operational and clinical challenges have increased for administration and staff, who now must care for sicker, frailer residents with more complex medical problems. These changes have occurred in the context of an "increased use of preadmission screening, expanded role of Medicaid home and community-based waivers, the introduction of Medicare and Medicaid managed care programs, the general trend toward prospective payment, and more rapid discharges from hospitals" (Wunderlich and Kohler, p. 22). As a result, "the services that were once provided in the hospital setting are now more frequently available in the nursing home setting; assisted living environments are starting to provide nursing care; and home health agencies deliver services that were once available only in acute care environments or nursing homes" (Fairchild, Knebl, and Burgos, p. 84).

In 1997, approximately 58 percent of residents were admitted to a nursing facility from a hospital or another nursing facility. Another one-third were admitted from their homes, and 40 percent of this group had been living alone. The most common diagnoses at the time of admission were cardiovascular disease, mental and cognitive disorders, and disorders of the endocrine system (i.e., diabetes mellitus); and, almost without exception, residents had more than one diagnosis when they were admitted. These conditions often contribute to functional decline, which can impact ADLs and instrumental activities of daily living (IADLs) such as shopping and taking medication. When combined with other risk factors, such as living alone and low income, these conditions make it more and more difficult for a person to remain independent, increasing the risk for admission to an institutional environment such as a nursing facility.

Financial characteristics

The government's current expenditures for health care clearly favor nursing-facility care, which is costlya conservative estimate put the cost of a nursing-home stay at $47,200 per year in 1999. Total nursing-facility care expenditures in 2000 were $92 billion, compared to $40 billion in 1988. The Congressional Budget Office (CBO) projects the nation's expenditures for long-term care services for the elderly will exceed $108 billion by the year 2010. The largest portion of these expenditures ($52 billion) will come from Medicaid; out-of-pocket expenditures will exceed $29.3 billion; Medicare will account for $16 billion; and private long-term providers will account for $11.2 billion. Medicare, which was designed to pay mostly for acute care or hospital costs, has historically paid for a very small portion of nursing facility care; this is expected to continue into the future, while long-term care insurance will likely play a more significant role. The growth in expenditures for nursing-facility care is projected to accelerate over this decade because of a number of factors, including rising provider costs in such areas as labor and liability rates. The CBO estimates that inflation-adjusted expenditures for long-term care for the elderly will grow annually by 2.6 percent between 2000 and 2040.

In 1997, average daily charges ranged from $136 for skilled care to $109 for intermediate care. For certified Medicaid beds, rates averaged $98, while Medicare rates were $216 per day. Across these rate categories, significant differences occurred based on such factors as ownership status and region of the country. For example, the rate for a skilled bed operated by a proprietary facility in 1997 was $139 per day, compared to $147 per day for a not-for-profit facility. The average daily rate for that same skilled bed in the northeast was $176, compared to a low of $115 in the South. Between 1990 and 2000, the desire of providers to fill a bed with a Medicare patient depended on the type and level of reimbursement and regulations. Currently, many providers are attracted to the Medicare program because of the relatively high reimbursement rates for these residents.

Administration and staffing

In 1997, it was estimated there were approximately 1.4 million full-time and part-time employees in nursing homes. The recruitment and retention of these employees, although a significant issue for all businesses today, pose some rather unique challenges for nursing-facility providers. The challenge of retention is critical in a nursing-facility environment because of the direct impact it has on quality-of-care issues. The administrative team, working with other staff in a facility, creates the culture of quality care. The ability to create and maintain a culture of quality is often hindered by high turnover of staff in many facilities. Singh and Schwab (1998) report that about 40 percent of nursing home administrators turn over each year, and the American Health Care Association (AHCA) reported in 1997 that the turnover rate for RNs and LPNs was 51 percent and that nurse's aides had a turnover rate of 93 percent. Registered nurses account for only 15 percent of the average nursing staff, while certified nurse's aides account for nearly 66 percent of staff. A number of factors contribute to staff turnover, including job stress, limited career opportunities, pay, and organizational culture. When looking at the clinical staff, the area that receives the most attention is pay. Based on 1997 data, the average RN was paid $16.88 per hour, LPN wages averaged $12.88, and nursing aide wages averaged $7.44. When these relatively low hourly rates are combined with a minimal benefit package, a strong economy, and the demands associated with caring for frail, medically complex persons, the challenge to retain quality employees can be easily appreciated.

The need to improve staffing standards and levels has received increased attention. In 1997, the staff-to-resident ratio for all direct-care staff was 89 per 100 residents and 59 nurse's aides per 100 residents. Certified nurse's aides spend the most time with residents, providing a significant portion of direct care, and yet they are often not well prepared to provide the level of care required by residents with increasingly complex medical problems. Based on the Medicare time studies that used the Online Survey, Certification, and Reporting (OSCAR) system, staffing hours for nurses averaged 3.5 hours per resident day (24 hours) for all nursing facilities in 1998. Registered nurses were found to spend 0.74 hours per resident day, LPNs spent 0.69 hours per resident-day, and nurse's aides averaged 2.09 hours. Because of the wide variation in resident care needs these numbers vary significantly across facilities. In contrast to the OSCAR finding of 3.5 hours per resident-day, a CMS time study came up with 4.17 hours, and a recently convened expert panel found the average to be 4.55 hours.

The recently released Institute of Medicine study on improving the quality of long-term care adds its support to this issue by recommending that CMS not only require RN presence twenty-four hours per day, but also that minimum staffing levels for direct care be developed.

Finally, the increasing role of the medical director has contributed to improving the quality of care. Each facility is required to have a medical director, who provides care to those residents who do not have a primary care provider. The medical director also plays a critical role in shaping clinical policies and procedures. The voluntary certification of physicians as Certified Medical Directors offered through the American Medical Directors Association has assisted physicians to better understand not only their clinical role within long-term care, but also to have a better appreciation of how to more effectively work within a nursing facility and as an active member of the administrative team.


Nursing facilities continue to serve a vital role within the long-term care system, even as they struggle to deal with a number of issues ranging from delivering quality care to adequate reimbursement. The frenetic pace of change is driven by the dynamic environment in which they operate, which seems destined to continue to bring more and more uncertainty to the role they will play in the long-term care system in the future. The recent Nursing Home Initiative by CMS has helped to continue focusing attention on addressing nursing-home quality and on minimum staffing ratios. Whatever the future holds for nursing facilities, one thing seems certain: if they are to survive and prosper, they will have to continue to evolve to meet the ever-changing needs of the residents they serve and to find funding mechanisms to adequately support the services they provide.

Thomas J. Fairchild Janice A. Knebl

See also Assisted Living; Long-Term Care; Medicaid; Medicare; Nursing Home Administration; Workforce Challenges.


Aventis Pharmaceuticals, Inc. Institutional Highlights Digest. Managed Care Digest Series, 2000.

American Health Care Association. Facts and Trends 1999: The Nursing Facility Sourcebook. Washington, D.C.: ACHA, 1999.

Congressional Budget Office. Projections of Expenditures for Long-Term Care Services for the Elderly. CBO, 1999. Available at

Fairchild, T. J.; Knebl, J. A.; and Burgos, D. "The Complex Long-Term Care Service System in Matching People with Services." In Long-Term Care. Edited by Zev Harel and Ruth Dunkle. New York: Springer Publishing Company, 1995.

Gabrel, C. S. An Overview of Nursing Home Facilities: Data from the 1997 National Nursing Home Survey. Hyattsville, Md.: U.S. National Center for Health Statistics, 2000.

Heffler, S.; Levit, K.; et al. "Health Spending Growth Up in 1999; Faster Growth Expected in the Future." Health Affairs 20, no. 3 (2001).

Manton, K. G., and Gu, X. "Changes in the Prevalence of Chronic Disability in the United States Black and Nonblack Population above Age 65 from 1982 to 1999." Proceedings of the National Academy of Sciences of the United States of America, Early Edition. 8 May 2001. Available at

National Institute on Aging. Progress Report on Alzheimer's Disease 1999. Silver Spring, Md.: Alzheimer's Disease Education and Referral Center.

Sahyoun, N. R.; Pratt, L. A.; The Changing Profile of Nursing Home Residents: 19851997. National Center for Health Statistics, Centers for Disease Control and Prevention, 2001.

Singh, D. A., and Schwab, R. C. "Predicting Turnover and Retention in Nursing Home Administrators: Management and Policy Implications." The Gerontologist 40, no. 3 (2000): 310319.

Wunderlich, G. S., and Kohler, P. O., eds. Improving the Quality of Long-Term Care. Washington, D.C.: National Academy Press,. 2001.

U.S. Census Bureau. "Nursing Home Residents 65 Years Old and Over by Selected Characteristics: 1997." In Statistical Abstracts of the United States, 2000. Washington, D.C.: Census Bureau.

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Nursing Homes

Nursing homes


A nursing home is a long-term care facility licensed by the state that offers 24-hour room and board and health care services, including basic and skilled nursing care, rehabilitation, and a full range of other therapies, treatments, and programs. People who live in nursing homes are referred to as residents.


Slightly over 5% of people 65 years and older occupy nursing homes, congregate care, assisted living, and board-and-care homes. At any given time, approximately 4% of the population are in nursing homes with the rate of nursing home use increasing with age from 1.4% of the young-old to 24.5% of the oldest-old. Nearly 50% of those 95 years old and older live in nursing homes. Nursing homes must meet the physical, emotional, and social needs of its residents.

Required care plans

There are federal laws regarding the care given in a nursing home, and it is essential that staff members become aware of these regulations. It is required that staff conduct a thorough assessment of each new resident during the first two weeks following admission. The assessment includes the resident's ability to move, his or her rehabilitation needs, the status of the skin, any medical conditions that are present, nutritional state, and abilities regarding activities of daily living.

In some cases, the nursing home residents are unable to communicate their needs to the staff. Therefore, it is particularly important for nurses and other professionals to look for problems during their assessments. Signs of malnutrition and dehydration are especially important when assessing nursing home residents.

It is not normal for an elderly person to lose weight. However, some people lose their ability to taste and smell as they age and may lose interest in food. This can result in malnutrition, which can lead to confusion and impaired ability to fight off disease.

Older people are also more susceptible to dehydration. Their medications may lead to dehydration as a side effect, or they may limit fluids because they are too afraid of uncontrolled urination. It is very dangerous to be without adequate fluid, so the nurse and other staff must be able to recognize early signs of dehydration.

When the assessment is complete, a care plan is developed. This plan is subject to change as changes in the resident's condition occur.

Nursing homes are often the only alternative for patients who require nursing care over an extended period of time. They are too ill to remain at home, with families, or in less structured long-term facilities. These individuals are unable to live independently and need assistance with activities of daily living (ADL). Some nursing homes offer specialized care for certain medical conditions such as Alzheimer's disease.

Commonly, nursing home residents are no longer able to participate in the activities they once enjoyed. However, it is required by law that these facilities help residents achieve their highest possible quality of life. It is important for residents to have as much control as possible over their everyday lives. Laws and regulations exist to raise nursing home quality of life and care standards.

By law, nursing homes cannot use chemical or physical restraints unless they are essential for treating a medical problem. There are many dangers associated with the use of restraints, including the chance of a fall if a resident tries to walk while restrained. The devices may also lead to depression and decreased self-esteem. A doctor's order is necessary before restraints can be used in a nursing home.


The Joint Commission on the Accreditation of Health Care Organizations (JCAHO) offers accreditation to nursing homes through the Long Term Care Accreditation Program established in 1966. This group helps nursing homes improve their quality of care. The JCAHO periodically surveys nursing homes to check on quality issues.

A nursing home may be certified by Medicare or Medicaid if it meets the criteria of these organizations. Families should be informed of the certifications a nursing home holds. Medicare and Medicaid are the main sources of financial income for nursing homes in the United States.

The state where a nursing home is located conducts inspections every nine to 15 months. Fines and other penalties may be enforced if the inspection reveals areas where the nursing home does not meet requirements set by that state and the federal government. Problem areas are noted in terms of scope and severity. The scope of a problem is how widespread it is, and the severity is the seriousness of its impact on the residents. When a nursing home receives an inspection report, it must post it in a place where it can be easily seen by residents and their guests.


When a resident checks into a nursing home, a contract is drawn up between the patient and the facility. This document includes information regarding the rights of the residents. It also provides details regarding services provided and discharge policies.

Resident decision-making

Decisions are made by each nursing home resident unless he or she has signed an advanced directive giving this authority to someone else. In order for health care decisions to be made by another person, the resident must have signed a document called a durable power of attorney for health care.


Nursing home care is costly. The rate normally includes room and board, housekeeping, bedding, nursing care, activities, and some personal items. Additional fees may be charged for haircuts, telephones, and other personal items.

Medicare covers the cost of some nursing home services, such as skilled nursing or rehabilitative care. This payment may be activated when the nursing home care is provided after a Medicare qualifying stay in the hospital for at least three days. It is common for nursing homes to have only a few beds available for Medicare or Medicaid residents. Residents relying solely on these types of coverage must wait for a Medicare or Medicaid bed to become available.

Medicare supplemental insurance, such as Medigap, assists with the payment of nursing home expenses that are not covered by Medicare.

Medicaid qualifications vary in each state. Families of potential residents should check with their state government to determine coverage options. According to a federal law, a nursing home that drops out of the Medicaid program cannot evict current residents whose care is supported by Medicaid.

Private insurance, such as long-term insurance, may cover costs associated with a nursing home. People may enroll in these plans through their employers or other group insurance policies.

In many cases, nursing homes are paid for by the residents' personal funds. When these funds are exhausted, the residents sometimes become eligible for Medicaid assistance.

Patients' rights

It is important for the professionals working in nursing homes to be aware of the residents' rights. Residents are informed of their rights when they are admitted. Residents have the right to:

  • manage their finances
  • privacy (for themselves and their belongings)
  • make decisions (unless advanced directives or durable power of attorney exist)
  • see visitors in private
  • receive information regarding their medical care and treatments
  • have social services
  • leave the nursing home after giving the required amount of notice (A stay in a nursing home is normally considered voluntary; however, the facility will consider a variety of factors before discharging a resident. These factors include the resident's health, safety and potential danger to self or others, as well as the resident's payment for services. The contract will state how much notice is required before a resident may transfer to another facility, return home, or move in with a family member.)

Family involvement

In some cases, a nursing home is chosen after the family has only a short time to prepare for the change. For example, when a patient is unable to care for himself or herself due to a sudden illness or injury, the family must turn to nursing home care without having the luxury of researching this option over time. The nursing home's costs must be explained to the resident or family prior to admission. It is important for the nursing home staff to be willing to answer the family's questions and reassure them about the care their loved one will receive.

Nursing home professionals have an opportunity to continue to work closely with the resident's family and loved ones over the course of a resident's stay. In these facilities, concerned family members and friends of the resident are involved in his or her care, and may have guardianship or other decision-making responsibility. These individuals may voice their concerns through meetings between staff and family members. Those with legal guardianship are entitled to see a resident's medical records, care plans, and other related material.


As in other health care settings, communication among nursing home staff is very important. In nursing homes, the care is based on a team approach. Physicians, nurses, and allied health professionals work together to make sure the resident is able to experience the highest quality of life possible.

In many cases, physicians who have had a long-term relationship with a patient continue treatment after the patient has been admitted to a nursing home. It is important for the nursing home staff to leave blocks of time open in the schedule for physician visits. It is also the staff's duty to keep the personal physicians apprised of a resident's medical condition.

The resident, physician, and resident's legal guardian and family must be told immediately if any of the following situations arise: an accident involving the resident, the need for a major treatment change, and a decision regarding discharge or transfer. Unless an emergency arises, the nursing home must give 30 days written notice of discharge or transfer. The family may appeal the decision.


The quality of care in nursing homes is an important issue. Quality issues include:

  • Ratios of staff to patients. Advocacy groups are pushing for increased staff-to-patient ratios in nursing homes. The National Citizens' Coalition for Nursing Home Reform recommends one direct care staff (R.N., L.V.N., or C.N.A.) per five residents during the day shift, 10 residents during the evening shift, and 15 residents during the night shift.
  • Elder abuse. It is important for nursing home personnel to look for signs of abuse or neglect when a resident checks in and during a resident's stay. Signs of abuse include bodily injuries that appear suspicious, visible harm to the wrist or ankles that may indicate the use of restraints, skin ulcers that seem neglected, poor hygiene, inadequate nutrition, unexplained dehydration, untreated medical problems, or personality disorders such as excessive nervousness or withdrawal. The nurse or allied health professional is to report any signs of abuse to the supervisor or physician.
  • Reimbursement. Nursing home administrators report that reimbursements do not cover the expenses, while nursing home advocates would like a higher portion of revenues to be allocated for direct patient care.



Birkett, D. Peter, M.D., ed. Psychiatry in the Nursing Home. 2nd Edition. Binghamton, NY: Haworth Press Inc, 2001.

Hosley, Julie B. and Elizabeth A. Molle-Matthews (Editor). Lippincott's Textbook of Clinical Medical Assisting Philadelphia, PA: Lippincott, Williams & Wilkins, 1999.

Rhoades, Jeffrey A. The Nursing Home Market: Supply and Demand for the Elderly (Garland Studies on the Elderly in America). New York, NY: Garland Publishers, 1998.


American Nurses Association. 600 Maryland Ave. SW, Ste. 100 West, Washington, DC 20024. (800) 274-4ANA. <>.

Centers for Medicare & Medicaid Services. 7500 Security Boulevard, Baltimore, MD 21244-1850. (410) 786-3000. (877) 267-2323. <>.

e-Healthcare Solutions, Inc., 953 Route 202 North, Branchburg, N.J. 08876. (908) 203-1350. Fax: (908) 203-1307. <>.

Joint Commission on Accreditation of Health Care Organizations, One Renaissance Blvd., Oakbrook Terrace, IL 60181. (630) 792-5000. <>.

The U.S. Department of Health and Human Services, 200 Independence Avenue, SW, Washington, D.C. 20201. (202) 619-0257. (877)-696-6775. <>.


Coates, Karen J. Senior Class. May 2002 [cited March 1, 2003]. <>.

Domrose, Cathryn. Seasons of Change May 2002 [cited March 1, 2003]. <>.

Rhonda Cloos, R.N.
Crystal H. Kaczkowski, M.Sc.


The nursing home staff may include an administrator, medical director, director of nursing, and directors for other allied health services. It is important for nursing home staff to understand the policies regarding care in these types of facilities.

The following professionals may provide care and treatments in nursing homes:

  • physicians
  • nurses
  • nursing assistants
  • dietitians
  • physical, occupational, and speech therapists
  • pharmacists
  • social activities staff
  • dentists
  • social workers or psychological counselors
  • other staff, such as custodians and office personnel

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Nursing Homes


Nursing homes are residential health care facilities that provide nursing care and supervision twenty-four hours per day. In addition to skilled nursing services, physical, occupational, and speech therapy are usually offered. These therapies are designed to enable residents to recover and improve functional ability lost as a result of disease or injury. In addition, residents may receive social services and engage in recreational activities designed to improve physical and mental health. Residents also receive assistance with activities of daily living such as eating, dressing, walking, toileting, transferring between a bed and chair, and bathing. Typically, a nursing-home resident will need help in three or more of these activities of daily living.

Nursing homes form part of the continuum-of-care options available for persons with chronic or long-term health care needs. This continuum ranges from independent home care to care within intensive-care units of hospitals. Not all nursing homes are the same. Some nursing homes provide basic services, called "custodial services." Others, called "subacute" facilities provide highly skilled and technologically complex services that resemble medical units in hospitals. Many provide a mix of services.


The average length of time that a person spends in a nursing home varies by the type of facility and the services rendered. For example, a person who resides in a nursing home in which he or she receives largely custodial services is likely to be there as long as several years. In fact, such a person will not usually return to an independent or community living environment. However, a person in a subacute facility is generally there only a matter of weeks. Such a person often receives intensive nursing or rehabilitation services and returns home or goes to an independent community environment.

Nursing-home residents generally have long-term health care needs that have resulted from one or more chronic illnesses, disabilities, or injuries. These conditions are rarely completely cured. Such conditions include, but are not limited to, strokes, fractured hips, arthritis, and mental confusion. These conditions often place a substantial burden on the health and economic status of individuals, affecting their quality of life and contributing to the decline of the person's overall ability to live independently.


The nursing-home industry is the second most regulated industry in the United States, second only to the nuclear industry. Nursing homes are required to be licensed by state health departments. They are inspected at least annually to determine compliance with approximately 150 different state and federal regulations, and results of these inspections are available to the public. In addition, nursing homes are regularly inspected or reviewed by other state and local organizations including, but not limited to, fire marshals, sanitarians, and patient-advocate organizations. The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) may accredit nursing homes that voluntarily meet certain health and safety requirements.


There are four basic ways to pay for nursing-home care. These include private funds, insurance, Medi-care and managed-care plans, and Medicaid. In general, people pay for approximately 25 percent of nursing-home care from their own personal financial resources. Basic room and board in a nursing home averages approximately $46,000 per year. Because of the costs, long-term care insurance is on the rise, and the extent of coverage varies greatly depending upon the insurance carrier and the individual policy. The American Association of Retired Persons (AARP) provides an analysis of the major insurance companies and their types of coverage. This information can be easily accessed through the Association's web site. Medicare and Medicaid are important governmental programs that provide coverage for nursing-home care.

Medicare. Medicare is a federal medical-insurance program that generally provides coverage to persons who are sixty-five years of age or older, persons of any age with permanent kidney failure, or those receiving Social Security benefits. Medicare coverage for nursing-home care is limited. Nursing homes that receive reimbursement from the federal Medicare program must be certified. All, or only part, of a facility may be designated as Medicare certified. A nursing home must meet the federal conditions of participation in order to be certified and maintain certification. During the annual state inspection or survey, compliance with the conditions of participation is assessed.

As of January 1, 2001, a person who is admitted to a skilled nursing facility within thirty days of a three-day hospital stay, and who is receiving care for the condition for which he or she was in the hospital, may receive up to one hundred days of either total or partial coverage from Medicare. The hundred days of coverage are not automatic. In order to qualify for Medicare benefits, the person must receive daily skilled nursing care or therapy services, and be certified for those services by a group of professionals, known as a utilization review committee, who reviews the case. If the person meets all of these requirements, he or she will receive coverage as follows:

  • Full coverage for a semi-private room, meals, nursing care, rehabilitation therapy, drugs prescribed by the physician, medical supplies and equipment for the first twenty days
  • Partial coverage for up to an additional eighty days if the physician and the reviewing professionals certify continued need for skilled services

Government statistics show that patients receive an average of twenty-four days of coverage under Medicare.

Medicaid. Medicaid is a program of health insurance for eligible low-income persons. Both the federal and state governments fund Medicaid. The program was not initially established to provide long-term coverage for persons in nursing homes; however, it has become the primary method of payment for low-income individuals in these facilities. While it varies from state to state, Medicaid pays for approximately 65 to 75 percent of nursing-home care. In order to receive payment from Medicaid, nursing homes must also be certified.

Individuals applying for Medicaid must do so through the county office of the U.S. Department of Human Services in their state. Medicaid applicants must meet both financial and medical eligibility criteria. In order to meet the financial criteria, an individual's assets must be less than $2,000; or $3,000 for a couple in the nursing home at the same time. Assets include cash, real and personal property (excluding the primary residence), cars, stocks, bonds, and the cash value of life-insurance policies, investments, and trustsif the trust provides for the person's care.

Many people have too many assets at the time of admission to a nursing home to qualify for Medicaid. They must typically "spend down" their assets to meet the financial eligibility requirement. In the past, these spend-down requirements have often left the community-living spouse destitute. As a result, more liberal laws now provide for the financial protection of such spouses. As of January 2001, most states allow the spouse of a nursing-home resident to retain half of the couple's assets and the family home and furnishings, so long as these assets don't exceed a state established minimum. These laws are subject to review both at the state and federal level.

Maria R. Schimer

(see also: Aging of Population; Geriatrics; Gerontology; Medicaid; Medicare )


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"Nursing Homes." Encyclopedia of Public Health. . 12 Dec. 2017 <>.

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