REGIONAL- Baby boomers and their families will find it increasingly difficult to access nursing facility care in rural Minnesota in the years ahead, as demand will continue to grow while supply is expected to dwindle.
That’s the conclusion of a newly released report from the Center for Rural Policy and Development based on a review of the Minnesota Department of Health’s provider data. While urban areas also have shortages of care, the problem, as with many other social support systems, is more acute in rural Minnesota.
“We are hearing frequently from rural leaders and residents that access to home care is becoming difficult, assisted living may be too expensive if it even exists in a rural area, and that nursing facilities are either shrinking the number of beds they have available or closing completely,” said senior researcher Kelly Asche. “Many of these declines are due to facilities closing and not just operators shrinking the number of beds available. And all of this is happening while demand for these beds is increasing and is expected to keep increasing until 2045. The long-term care industry is critical for providing care to our loved ones when their needs surpass what a family member can provide.”
To illustrate the urban/rural divide, peak demand for long-term nursing care in urban areas is not expected to peak until 2055, while in rural counties with higher percentages of elderly the demand will peak much sooner, in 2037. Counties with an urban/rural mix will see peak demand come in 2047.
St. Louis County falls in the middle, according to the report, with demand for 1,242 nursing facility beds in 2047 to serve a 65 and older population of 44,000.
Nursing care bed capacity has been on a steady decline since 2005, with a greater percentage of losses occurring in rural Minnesota. St. Louis County has seen a 28.1 percent drop, and rates vary in surrounding counties from 20.7 percent in Itasca County to 47 percent in Koochiching County and 21.3 percent in Cook County to 33.9 percent in Lake County.
The loss of skilled nursing beds in rural counties has been fueled by a greater percentage of facility closures versus idled beds. Entirely rural counties had 26 percent fewer care facilities in 2024 than in 2005, while the drop in urban care facilities was only nine percent. As a mixed county, St. Louis County has fared better than most, showing a net decline of only one facility, 19 to 18, since 2005.
Two factors
Asche identified two factors in the report that have contributed to the decline in skilled nursing care, the first being the growth in assisted living facilities and home and community care-based agencies.
Years ago, nursing facilities were the go-to option for post-surgery rehabilitation, dementia care, care for individuals with less severe physical disabilities, and people with mental disabilities. That began to change in the 1980s with a growing negative public perception of nursing facilities, the report says. Changes in technology, policy, and payments have shifted a large portion of the clients once served by nursing facilities into less intensive alternative care arrangements, leaving the most dependent and expensive to care for clients to nursing facilities.
“It used to be common that there were individuals staying at nursing homes that would still have drivers licenses and were still mobile. Now, it’s not uncommon to walk into a nursing facility and everyone needs a wheelchair,” Care Providers of Minnesota’s Todd Berstrom told investigators.
Rural nursing care operators are facing a growing financial crisis, as rising costs and stagnant payments strain their ability to remain viable.
“Cost of supplies are up, wages are up, but payments have not increased enough,” said Kari Swanson, CEO of Cornerstone Nursing and Rehab Center, which serves Bagley, Fosston, and Kelliher. “Lots of rural facilities are small and can’t cut anymore corners or scale down enough to make the finances work.”
While the shift toward more acute care in nursing homes reflects changing preferences, which has sparked positive growth in assisted living and home-based care, those options primarily serve individuals with less severe or chronic conditions, researchers say.
Skilled nursing facilities remain critical for patients with more complex needs, but their sustainability is threatened by a lack of diverse revenue streams to offset the high costs of care, raising concerns about the future of rural long-term care.
The second significant factor cited in the report is the ability to find workers. It’s a problem common to all facets of rural health care, one exacerbated during the COVID pandemic. As the pandemic has waned more people have returned to the workforce, but the shortfall remains critical. In northeast Minnesota, the study found 1,226 job vacancies for registered nurses, nursing aides, and personal care aides with increasing demand in upcoming years, the shortages are projected to get worse.
This is occurring at a time when rural Minnesota is facing an historic shortage of workers overall. While other industries have been able to increase pay and benefits to attract workers, nursing facilities can’t compete because their revenue is locked in by Medicare, Medicaid and state policy.
Nursing facilities that try to “grow their own” employees by offering education incentives often lose those employees to other health care providers.
And in April, the Centers for Medicare and Medicaid Services released new standards that will require more hours of staffing for registered nurses and nurse aides, standards that only one in five nursing facilities currently meets, according to the Kaiser Family Foundation. Rural facilities have until 2029 to meet the standards and may qualify for waivers from some or all of the requirements.
Another agency that could affect nursing facility staffing is the Minnesota Nursing Home Workforce Standards Board, created by the Legislature in 2023. Sparked in part by the exodus of health care workers caused by the COVID pandemic, the board is tasked with creating minimum employment standards to protect the health and well-being of nursing home workers. One area they are required to address is wages, which are generally considered to be too low in nursing facilities. Should the standards board implement higher minimum wage requirements for nursing care workers, smaller facilities in particular may find it difficult to remain financially viable.
The report also notes that assisted living facilities and home care won’t be able to address the growing need for skilled nursing beds due to the different populations they serve, and that the growth of assisted living facilities in rural areas of the state has not kept up with the decrease in nursing beds.
The nursing facility problem will only grow as demand for services increases over the next 20 years, the report concludes. Rural areas, with their larger senior populations, are going to feel the pinch first, which means they also have the least amount of time to prepare. Raising standards and pay could help facilities and agencies provide even better service, but the data show that these changes can’t be done based on the current business model. The economies of scale are such that without a large population to spread the risk over, long-term care facilities will only continue to struggle and close, leaving fewer and fewer options for rural residents.