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Big change coming to nursing homes
Apr 22, 2024
Episode 1144

Big change coming to nursing homes

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A new rule requires facilities to increase minimum staffing levels.

Today, the Biden administration announced plans to implement strict staffing requirements at nursing homes. Kimberly Adams unpacks what this rule may mean for care and the nursing home business model. Plus, guest host Nova Safo returns to discuss the United Auto Workers’ historic victory in the South and the latest troubles at Tesla. And, high-speed rail is finally coming to the U.S.

Here’s everything we talked about today:

We love to hear from you. Send your questions and comments to makemesmart@marketplace.org or leave us a voicemail at 508-U-B-SMART.

Make Me Smart April 22, 2024 Transcript

Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.

Kimberly Adams 

All right. Hello everyone, I’m Kimberly Adams. Welcome back to Make Me Smart, where we make today make sense.

Nova Safo 

I’m Nova Sofo, filling in for Kai Ryssdal. Thanks for joining us. It’s Monday, April 22, 2024. Happy Earth Day.

Kimberly Adams 

Happy Earth Day to you, too, Nova. Yeah, today we’re going to do some news, and then we’re going to get to some smiles, so let us start with the news. What you got, Nova?

Nova Safo 

Oh, I get to go first again. How nice.

Kimberly Adams 

It’s the guest host privilege.

Nova Safo 

Oh, well, that’s let’s lovely privilege. You know, I think we really got to talk about Tesla today.

Kimberly Adams 

Okay. Go for it. Which is funny because I thought you were going to talk about UAW because last week you said you’re going to be watching what went down with the UAW.

Nova Safo 

Well, we could. They did. You know what? Let’s do it. Let’s do both. UAW had a huge victory yesterday, over the weekend. I think they announced the official results on Saturday. And even though they weren’t completely finished counting. And they already declared victory because it was so clear they were winning. They won by a two to one margin. Better than a two to one margin over the weekend in their three-day vote to unionize the Volkswagen plant in Chattanooga, Tennessee. So, this is a huge deal. First time apparently, that in a southern state of foreign automaker owned plant has voted to unionize workers at that plant. So, it’s a huge breakthrough for the UAW, the United Auto Workers, and could set the stage for their efforts really to unionize much if not all of the South. In terms of the auto industry, there’s some 150,000 workers in the auto industry, in auto plants working in southern states and in western states. And the UAW has made no secret that that’s what they’re after to expand their membership to unionize more of those shops.

Kimberly Adams 

Yeah. All right. I’m sorry I took you on a different story. What did you actually want to talk about today?

Nova Safo 

No, no, that’s a very important story. We covered it this morning also on Marketplace Morning Report, so check out that podcast as well. But on the Tesla front, what I found really fascinating is that they’re in trouble.

Kimberly Adams 

So many things wrong with the Cybertruck.

Nova Safo 

Well, besides the Cybertruck. I mean, we’re not even talking about it. There’s a recall last week. I don’t recall. I don’t recall what the recall was about.

Kimberly Adams 

The accelerator sticks and makes you not stop.

Nova Safo 

It seems like an important thing to get right.

Kimberly Adams 

Yeah. Also, I saw a bunch of videos over the weekend about how the Cybertruck is like, so heavy that it busts through guardrails. Like the guardrails that are supposed to stop vehicles from leaving the road. Tesla and I think some of the other EVs are just too heavy, and low center of gravity makes them just blow through it. Anyway.

Nova Safo 

That’s pretty dangerous. Yeah, that’s a bigger story right there. And not to mention, or at least early anecdotal reports that the stainless-steel body rusts quickly in rain fact. Anyway. Tesla denies that, by the way. Anyway, so in this case, the bigger problem is an existential one. Its stock is down 40% this year, and it’s plummeting today ahead of its earnings report tomorrow, and that’s the quarterly earnings for the first three months of the year. This is happening because investors have some serious questions about Tesla’s long-term plans. And they’re worried because for the first time in, I think, a couple of years, three years or so, it posted lower sales in the first three months of the year. Now investors are expecting lower revenues from those sales and lower number of units sold. They reported that already, and now they’re expecting lower actual dollars in from that, and kind of a bloodbath of a report. Ahead of that, Musk laid off, you know, 10% of his workforce at Tesla about a week or so ago. And now, there’s these rumors that he’s going to focus on the Robotaxi, and no longer focus on making an affordable version of his electric vehicle. So, a lot of questions for him to answer, and I think investors are worried about kind of the long-term plans here.

Kimberly Adams 

It’s so fascinating just even the way that, you know, we talk about it. You know that Musk is giving up on his plans for a more affordable version of his car, and Musk has a lot to answer for, and it really is reflective of how much the company has become about the man. I mean, it was always a very, you know, Elon focused entity. But even more so with the sort of problems. Those problems that are being even more tied to the person. So, even if the company was doing fine, which is not, Musk is starting to become almost a liability for his own company, and all that stuff is getting attached to him.

Nova Safo 

And it may not be an almost in fact. Our colleague, one of the editors at Marketplace, Noia Karr pointed out that to me, and I hadn’t heard about this. There have been some studies looking into this and finding that there are plenty of buyers apparently who are turned off by Musk’s recent comments and political comments, which appear to be right-leaning or heavily right-leaning. And, you know, I’m not in his head. I don’t want to specifically say one way or the other, but that is starting to have an effect on the number of potential car buyers who are considering a Tesla or not considering a Tesla. The numbers are really declining dramatically on consideration. A lot of people are pointing towards Musk as the reason.

Kimberly Adams 

Yeah, I wonder if one day some econ student is going to do a comparison paper on sort of what the My Pillow Guy and Musk have done to their companies sort of before and after they started becoming, you know, sort of more deeply engaged in this sort of narrative and stuff like that. Anyhow, that’s for the researchers.

Nova Safo

And what do you bring today?

Kimberly Adams

Yes, so mine is a follow up on a story that I did last year because as regular listeners of the show will know, I do love a good federal regulation. And last year, I did a story about the comment period opening up on new nursing home staffing regulations. And with so many folks, you know, getting ready to enter potentially the long-term care industry in the United States with the aging of the baby boomers, and things like that, we have drastic shortages in long term care in this country, whether that be home health care aides or staffing in nursing home. Nursing homes are incredibly expensive. It’s a pretty strained industry already. And lots of concern that as more people enter this system, the quality of care is at risk. So, the Biden administration has been pushing for what are called minimum staffing requirements for nursing homes, basically saying you have to have an RN on call. You have to have nurse aides on call. They need to be spending X amount of time with patients every day, in order to get access to federal funding, like through Medicare and Medicaid, right? So, those rules were finalized, and the Biden administration is out with the final rule and making a pretty big deal about it. Harris was talking about it today. And this final policy, according to The Hill actually go slightly further than what was proposed back in September. And so now, the current law. I’m just going to read here. “Current law only requires that nursing homes have ‘sufficient’ staffing to meet the nursing needs of residents. The ‘sufficient’ rule is too vague, experts and advocates have said, and facilities have not been held to a high-enough standard. Among other provisions, the final rule will require facilities to have a registered nurse on staff 24 hours a day, seven days a week.” Nursing homes will also be required to provide residents with at least 0.55 hours of care from a registered nurse every day, as well as 2.45 hours of care from a nurse’s aide. And the White House said that nursing homes must provide a total of at least 3.48 hours of nursing care per resident per day, including those three hours from the RN and the nurse aide. This got a ton of pushback from the industry as they were developing these regulations with the, you know, reasonable argument that there simply are not enough RNs to meet the need, right? There are not enough nurses’ aides. They’re not enough registered nurses. And they’re already struggling to fill the spots that they have. And one of the nursing homes that I visited when I was working on the story, had a whole wing of their nursing home that they didn’t have open simply because they couldn’t staff it properly. And so, there were people on waiting lists for access to this facility, but they couldn’t get the empty beds because, you know, there was not enough staffing. And so, CNN includes some data that the nursing home industry put out around this. It said, “Meeting the proposed mandate would require nursing homes to hire more than 100,000 additional nurses and nurse aides at an annual cost of $6.8 billion, according to a September analysis released by the American Health Care Association, which represents more than 14,000 nursing homes and long-term care facilities that provide care to approximately 5 million people annually. Some 94% of nursing homes were not meeting at least one of the proposed staffing requirements, the analysis found.” So, there’s a timeline for nursing homes to reach compliance. And nursing homes and long-term care facilities in more rural areas will get more time. They can apply for exemptions and things like that. They’re supposed to be also efforts to try to encourage more people to go into this field. But, you know, it’s a real conundrum. There are not enough people in this industry. But on the other hand, who wants to send a loved one to facility without some sort of guarantee about what kind of care they’re going to receive on the back end. The nursing home industry says that this kind of rule means that some of these facilities are going to have to close because they can’t meet the staffing requirements, which would make the need even greater. Advocates are saying they just need to sort of decrease profits in the at least for-profit sector of the nursing home industry. So, it will be very fascinating to see how this actually gets implemented.

Nova Safo 

Yeah, I worry about that last part. Closing of homes that either can’t staff folks because they can’t find them, or would find the profit margins too low or nonexistent to continue, and that’s worrisome. I mean, because we already don’t have enough good, you know, quality facilities out there for folks.

Kimberly Adams 

Well, I mean, if capitalism works, in theory, somebody will step in to fill the void. But that’s if capitalism works.

Nova Safo 

Do we know anything about whether that extra money, that the extra cost that’s going to that’s involved, whether they’ll be kind of absorbed by you know, Medicare. Will they be covering?

Kimberly Adams 

Well, a lot of people stay in nursing homes is covered by Medicaid, which means the cost of those programs could increase if the cost of care goes up, which is one of the things that the industry has said will happen is that the cost of care will increase. Because if you have to have more staffing, if to hire more people, nurses are demanding higher wages, rightfully so. And so, you know, it’s going to come down to profit margins, and who’s willing to take what to work, you know, in the spaces. It’s really hard work, you know, being a nurse’s aide, or being an RN in these facilities, You’re dealing with people who have a lot of needs and need a lot of attention. The work has traditionally not been paid very well, especially for the nurses’ assistants. So, the wages in that sector probably need to go up anyway. But those costs are going to have to be borne somewhere, it’s either going to be, you know, through our own taxes, and the cost of Medicare and Medicaid going up in terms of its share of the federal budget, or in terms of the people who have to pay out of pocket. Those costs going up for families because you know, very few people have long-term care insurance. Those policies are very hard to get to pay out sometimes. So, it’s definitely a bigger issue that that’s going to be, that is already very relevant for a lot of families, and it’s probably going to become even more so. But yeah, that’s a little grim. We should probably move on to smiles.

Nova Safo

Let’s do it.

Kimberly Adams

Okay, I’ll go first on this one since it’s Earth Day related. I saw a really cool story in the Washington Post about nine practices from Native American culture that could help the environment, and it’s a bunch of different things from farming strategies to building strategies from just sort of strategies and ways of thinking about interacting with the land that have been in place for millennia across cultures in different parts of the world. And it reminded me that we have a lot of the solutions we need to some of the problems of climate change that we’re facing, if only we look at them and respect them and treat Indigenous knowledge with the level of seriousness that we treat other types of knowledge. And so, things like you know, dry land farming, restoring salmon runs, resilient seeds, aka let’s not do monocultures and force things to grow in places that they don’t really like to grow. Climate smart, Indigenous design, sort of the way that you do fire management, things like that. There’s a bunch of ideas. And so, I think it just made me. I was glad to see the attention. I was glad to see the thoughtfulness around it, and I hope that more people will start taking these strategies more seriously, and then maybe we can all do better. So, that was mine. What’s yours?

Nova Safo 

Fabulous. Mine is about high-speed rail in the United States.

Kimberly Adams

I saw that story.

Nova Safo

This is really exciting. It’s a private company who’s going to apparently build the first one in America, the first what would be considered an authentic bullet train because it would be going in between states.

Kimberly Adams

The one in Florida is not a bullet train, right?

Nova Safo

Not quite there. So, the one in Florida, the same company, Brightline, that goes between Miami and Orlando, and at most at 125 miles per hour. The train that they’re going to build apparently broke ground today, according to the company, between Las Vegas and Los Angeles, a very heavily traveled route by car. It’s going to go as fast as 186 miles per hour. And therefore apparently, our first bullet train and Acela, by the way, apparently, I think on track also goes up to 150 miles per hour or something like that. Anyway, this will be the fastest.

Kimberly Adams 

Usually only for little bits of time.

Nova Safo 

Yeah, yeah. So. Well, there you go. It’s going to be really exciting, going to cost $12 billion. I think a good chunk of that is coming from the Infrastructure Act. There’s some grant money in there, as well as some non-tax bonds that the company can take out. They are very optimistic about this line. They think it’s going to replace as many as 30,000 car rides per day. That is really optimistic because according to other measurements, there’s about 44,000 car rides per day between LA and Las Vegas. So, that would be almost all of them. I don’t know if that’s going to happen.

Kimberly Adams 

So, how long will the trip take at these speeds?

Nova Safo 

Right? So, instead of four hours by car, if you’re just going a straight shot, it would take about two hours, according to the company. And that’s four hours by the way, three and a half to four hours is the best-case scenario. The problem is that especially because Las Vegas is a very popular weekend destination for Angelenos and Southern Californians. They’re all coming back on Sunday at the same time Sunday night. And so, there ends up being this horrible traffic on this very narrow highway in the desert between Las Vegas and LA. So, it can be a really awful drive. I’ve been lucky enough not to get stuck in that kind of the worst of the traffic before, but it’s it can happen. I have flown from LA to Las Vegas to my embarrassment because it is a very short flight. So, the way this company is selling itself is that they’re trying to build these lines that are too far to drive, too close to fly, or too close that you shouldn’t fly so close. So anyway, I think it’s really exciting. And as a former Chicago, I think of lines, like if we went from Chicago to Indianapolis, Chicago to Madison. Those are all four-hour train rides. To cut those to two hours would be game changers. And also, like, if you went from Chicago to Milwaukee, instead of an hour and a half to two hours by train, if it took, say 45 minutes. All of a sudden, those two cities basically are connected.

Kimberly Adams

One Metro.

Nova Safo

Yeah, one Metro. It will be just incredible. I am just really excited that this is happening.

Kimberly Adams

That’s kind of Earth Day-related too.

Nova Safo

Yeah. And they’re hoping to have it up and running by the Olympics in LA, which I guess is 2028. So, it’s coming up.

Kimberly Adams 

Okay, look at that. Oh, man. I have never ridden on a bullet train. Have you?

Nova Safo 

No, I rode in a fast train in Germany, but not a bullet train. And it’s just it’s really comfy. And it takes no time at all to get to your destination, and it’s just wonderful. I loved it. So, I’m hoping that we will have the privilege and the luck to be able to have that in this country, and Americans can enjoy it. I think it’s just a win-win.

Kimberly Adams 

Yeah, I’m a little hurt that in all of your Chicago commute examples you didn’t mention the St. Louis route.

Nova Safo 

St. Louis? Oh, that’d be huge. What it is? Like five and a half hour drive if you go from, and could you imagine in the winters it’s the worst.

Kimberly Adams 

Oh, I know. Because one, I had my very last ever layover in O’Hare during the winter because then I learned my lesson, and I never again in all of my days will have a layover in O’Hare. I was trying to get home for Christmas, and all the flights got canceled, and I ended up renting a car in a blizzard and driving from Chicago to St. Louis in an ice storm open your hands at three o’clock in the morning with tractor trailers and cars spinning out the whole way down. At one point, my tire blew out on this like patch of ice, and I pulled over, changed the tire in a blizzard by myself, and somehow made it back to St. Louis before dawn.

Nova Safo

I would have given up much sooner.

Kimberly Adams

No, I couldn’t though because all the cars were stuck. And so, like if you stopped, you were going to stay stopped, and you were definitely going to get bumped off the road. That was one of the worst drives in my entire life, and I would have much rather taken the train, but also never again layover and O’Hare in the winter. Any who, tomorrow we are going to do our weekly deep dive, in which we are going to get into the economics of dollar stores, which you know ideally how they try to keep prices low and why some dollar store chains are struggling right now. And why some communities want to stop dollar stores from moving in, which is a big thing that’s happening as well.

Nova Safo 

Making dollar stores makes sense.

Kimberly Adams 

Oh no. Make Me Smart is produced by Courtney Bergsieker. Today’s program was engineered by Drew Jostad. Ellen Rolfes writes our newsletter. And our intern is Thalia Menchaca.

Nova Safo 

Marissa Cabrera is our senior producer. Bridget Bodnar is the director of podcasts. And Francesca Levy is the executive director of Digital. I’m running out of ability to speak.

Kimberly Adams 

That’s okay. It’s Monday. It’s like that sometimes.

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