I suppose you could consider it odd that nursing-home capacity in the U.S. is shrinking just as the oldest boomers are turning 80. Living as we do in a supply-and-demand economy, you’d think the industry would be booming. But many of these facilities are struggling, and recent research suggests it’s a crisis that’s been building for several years.
A study published last year in JAMA Internal Medicine found that operating capacity in skilled nursing facilities (SNF) had declined by 5 percent nationwide since 2019, with one in four U.S. counties experiencing a reduction of 15 percent or more. And the effects of this shift are not insignificant, the authors note: “Greater loss of SNF capacity was associated with longer hospital stays and increased travel distances to SNFs, suggesting that declines in operating capacity may be impairing access to care.”
And we may be witnessing only the first signs of a larger crisis beyond those short-term care facilities, says study coauthor David Grabowski, PhD, a health policy researcher at Harvard Medical School. “We’re seeing a serious problem and it’s heading in the wrong direction,” he tells The New York Times. “As you look at the demographics, this is only going to get worse, maybe a lot worse.”
Paula Span, writing in The Times, cites a 2024 American Health Care Association report noting that nearly half of nursing homes were limiting admissions; waiting lists rather than rooms greeted prospective residents at 57 percent of these facilities.
The problem is partly about revenue and partly about reputation. Inadequate government reimbursements for Medicaid residents squeeze the profit margins for these facilities, which respond by relying heavily on poorly paid and overworked staff, which creates the sort of environment that is less than inviting to those most in need of care.
“Nursing homes close because people don’t want to go to nursing homes,” Sam Brooks, JD, public policy director for the National Consumer Voice for Quality Long-Term Care, tells Span. “The quality is so low that people avoid them like the plague.”
Hence the rise of at-home and community-based care models. According to a Kaiser Family Foundation report, nearly 50 percent of Medicaid funding for long-term care was funneled to these organizations in 2023; that’s up from 29 percent in 2000. And though caregivers at many of these companies face the same issues that have pushed staff turnover to as high as 82 percent, one novel sector of the industry may offer a more promising approach for an aging population that will require an estimated 800,000 home care workers in the next 10 years.
“Home care cooperatives represent an innovative approach to addressing the caregiver crisis to improve job quality and retention,” says Geoffrey Gusoff, MD. “Other home care businesses can learn from cooperatives’ practices to improve caregiver jobs and ultimately retain and recruit more caregivers to meet the growing demand.”
It’s a tiny player in a giant industry, comprising a mere 14 co-ops and 2,050 worker-owners. But after surveying representatives from five of these organizations, Gusoff, an assistant professor of family medicine at UCLA, and his research team concluded in a 2025 study that they enjoyed far more job satisfaction than their peers in more conventional long-term care organizations.
These worker-owners, all of whom had prior experience at conventional care companies, reported better overall compensation, including wages, benefits, and profit-sharing. There was also a greater sense of community and camaraderie among their coworkers and, perhaps more importantly, much higher levels of control in the areas of patient care, scheduling, and company policies.
It’s this level of agency and collaboration that has led to what Gusoff and his team estimated as half the annual turnover compared with conventional home care companies. “If home care cooperatives’ level of HCW [home care worker] retention were achieved industry-wide,” he writes, “it would lead to savings of approximately $2.4 billion in direct turnover costs annually.”
That would require struggling nursing homes and home care companies to make a major shift in workplace management, compensation levels, and numerous other operating standards that have long been a fixture of their care model. But Gusoff argues that it may be the most effective way to pull the industry out of its slump.
“By promoting a consistent and growing HCW workforce,” he notes, “these types of agency-level changes and industry-wide reforms have the potential to significantly improve the lives of millions of older adults, family caregivers, and HCWs while preventing costly, unnecessary care.”
I suspect more than a few of those 80-year-old boomers would love to see how the industry responds.
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