A new staffing rule is little more than doing the bidding of the SEIU and National Nurses United.
A new staffing rule is little more than doing the bidding of the SEIU and National Nurses United.
A s President Joe Biden nears the end of his term, his administration is in a hurry to impose new regulations and shower allies with benefits. The Centers for Medicare and Medicaid Services (CMS) recently finalized a rule that mandates staffing increases at nursing homes that will cost taxpayers and families billions of dollars a year. The regulation is a transparent payoff to politically connected unions with little policy justification.
The new CMS rule requires nursing homes to have a registered nurse on site 24 hours a day, seven days a week, and requires nursing homes to hire tens of thousands of other nurses to increase the amount of time they spend with residents. The government estimates that about 80 percent of the country’s nearly 15,000 nursing homes would have to add staff to comply.
The administration expects the new rule will cost $43 billion over the next decade. Some independent estimates show the cost at closer to $70 billion over a similar time frame. For perspective, the much-debated and scrutinized CHIPS and Science Act appropriated about $50 billion for semiconductor subsidies, along with another $25 billion or so in tax credits.
The nursing-home rule makes lots of references to studies that show the benefits of more nurses, including avoiding other medical costs and hospitalizations. But government tends to focus on the benefits without comparing them to the costs. The rule itself estimates $2.6 billion of total Medicare savings from reduced medical charges, in other words, less than one-tenth of the costs. Anywhere outside of government that would be enough to sink a plan.
The true motivation for the rule is not hard to divine. The Service Employees International Union (SEIU) and National Nurses United have been trying to require increased nursing-home staff ratios for years. National Nurses, which is composed of registered nurses, brags that it was the “author, sponsor, and driving force” behind a landmark 1999 California law that first mandated staffing ratios at nursing homes, and it has been pushing for stronger mandates at both the state and federal level since.
When President Biden issued an executive order last year calling for more nursing-home staff and spending on long-term care, he belabored the benefits to workers almost as much as to residents. The order said it is the “the policy of my Administration to ensure that the care workforce is supported, valued, and paid well,” and that they have “the free and fair choice to join a union.” It was one of four mentions of unions in the order.
Vice President Kamala Harris noted that the administration is “committed to building a long-term care system” that can put “direct care workers into good-paying jobs with the free and fair choice to join a union.” Harris announced the final rule in Wisconsin, a swing state, accompanied by SEIU members.
The administration doubled down on the benefits to nurses by requiring that 80 percent of certain Medicaid funds be spent on “compensation for the direct care workforce.” Vice President Harris clarified that this “will ensure adequate compensation” and “higher wages” for the workers.
The nursing-home rule gives explicit power to unions to be involved in staffing decisions. The rule requires homes to allow a “representative of direct care employees” to help formulate their staffing plans. The CMS clarifies that, among other possibilities, getting input from “elected local union representatives . . . or labor union, could be especially important.”
The government estimates that about half of the new costs could be picked up by federal taxpayers through Medicare and Medicaid, and about a quarter could be picked up by the states through their portion of Medicaid spending. But the rule admits that almost another $10 billion could be picked up by others, especially nursing homes. Keeping a loved one in a nursing home is one of the most expensive actions many families will ever have to take, and this rule will only increase that burden.
The rule comes at a difficult time for nursing homes. More than 600 homes closed in the six years up to 2023, and every year thousands more nursing-home beds disappear. The administration’s claim that this rule will push back on the private-equity and for-profit destruction of nursing staff rings hollow when the large majority of even nonprofit and government homes will have to hire more nurses. Many homes have said they want to hire more nurses but they simply aren’t available. The rule won’t conjure thousands of new nurses out of thin air.
The nursing-home regulation is one of a string of recent rules adding billions of dollars of costs to taxpayers and citizens, including new mandates on refrigerators, water heaters, and federally funded housing. Like the nursing-home rule, these demonstrate the dangers of allowing the president to create massive mandates without meaningful input from Congress or the general public. The nursing-home rule in particular demonstrates the danger of allowing small interest groups to transfer costs to the public without consequence.