As most facilities continue to focus efforts on recovering from the impact of the pandemic, the potential of an economic recession threatens to present the next major provider challenge.  With increasing inflation, climbing interest rates, stock market declines, supply chain issues, and ongoing labor shortages there is increasing talk of a coming recession. What might this mean for nursing facilities?

During the 2008 recession tied to the subprime mortgage crisis, there were several takeaways that may provide insight into what we might expect should a recession come to fruition:

      • During the 2008-2009 recession, elective surgeries and treatment for minor, non-urgent conditions declined as consumers deferred expenses when resources were tight. For post-acute care, this may mean reduced short stay rehab admissions for elective orthopedic surgeries and similar care, as well as a slowdown in community outpatient rehabilitation referrals.
      • While senior care withstood the last recession relatively well, healthcare settings in general saw expanding numbers of residents with difficulty covering co-insurance amounts. In the business office, this could lead to increased accounts receivable issues and write-offs.
      • On the staffing front, however, there may be a bright side as recessions have been found to lead to reduced job prospects resulting in lower turnover rates[1]. In addition, historically, retired nurses have rejoined the workforce in greater numbers during a recession, and a recession may impact job opportunities in other sectors which may lead more workers to consider senior care employment. With regard to wages, a 2017 study of nursing wages by the U.S. Bureau of Labor Statistics found that during the 2007-2010 recession period, nursing wages increased by 6.3% in nursing facilities and by 8.4% across all nursing settings, but the total number of RNs working through employment service agencies fell from 3.9% to 2.7% for the same time period.[2]

In addition, recent high home prices are increasingly allowing seniors to walk away from the sale of their home with more cash in hand than anticipated, allowing them to afford quality senior living options. This bodes well for assisted living providers who “are a little bit better positioned because it’s so needs-based versus independent living,” according to Beth Mace, Economist for the National Investment Center for Senior Housing and Care (NIC) in a May Senior Housing News article. [3]

It’s easy to become overwhelmed with the many challenges providers face, but framing a plan that considers actions that address the most critical potential risks for your organization is a good place to start.  Contact Proactive for assistance in reviewing potential missed Medicare revenue opportunities.




Amie Martin, RN, RAC-CT

Learn more about the rest of the Proactive team.