97 years of economic insights for Indiana

The IBR is a publication of the Indiana Business Research Center at IU's Kelley School of Business

Indiana’s nursing home industry

Co-Director, Indiana Business Research Center, Indiana University Kelley School of Business

It’s become a cliché: The COVID-19 pandemic accelerated and exacerbated many ongoing changes in lifestyle and work. Automation of work increased and personal service shifted to doorstep delivery. The number of retirements among baby boomers also seems to have taken flight, especially for those who delayed retirement to build back their retirement savings after the last recession. The labor force has also been receding, with many younger folks choosing to stay in school longer to delay work or opting for less obvious ways of supporting themselves—that is, without a paycheck but perhaps with work paid in cash.

Our population in Indiana has also been aging. Between 2010 and 2030, the population ages 65 and older will have grown by more than 570,000—from 841,108 in 2010 to 1.4 million in 2030 (see Figure 1). That near doubling is bound to put a strain on the relatives who care for their older parents and grandparents, but also on the industries that exist to help the elderly, including nursing home facilities, assisted living communities and agencies that provide in-home care for the elderly.

Figure 1: Indiana's projected growth in the 65 and older population

Column chart from 2010 to 2050, showing 65+ population increasing from 841,108 to 1,518,607.

Source: Indiana Business Research Center

Let’s look at how many businesses in Indiana are focused on care for the elderly. Based on federal and state employer-based data, Indiana has 1,563 business establishments focused primarily on care for the elderly. These include 614 nursing homes, or the more formal name of skilled nursing facilities (this doesn’t include rehab facilities), another 744 businesses providing home health care services (which could include care for the disabled as well as the elderly), and 205 assisted living facilities specifically for the elderly (see Figure 2).

Figure 2: Elder care establishments in Indiana

Line chart from 2017 to 2021 (third quarter of each year) showing establishments for home care services, nursing homes and assisted living for the elderly.

Source: Quarterly Census of Employment and Wages, U.S. Bureau of Labor Statistics

There was a noticeable surge in the number of nursing homes between 2018 and 2019, with an additional 100 facilities, for a total of 609 in 2019. That was tempered the next year, when in 2020 there was a loss of 7, only to grow to 614 in 2021. Notably, there has been consistent growth in the number of home health care businesses, adding nearly 200 establishments between 2017 and 2021.

Figure 3 shows the annual percent change in establishments by type of elder care.

Figure 3: Year-to-year percent change in establishments by type of business

Column chart from 2017-18 to 2020-21 showing percent change in nursing homes, assisted living for the elderly and home health care services.

Source: Quarterly Census of Employment and Wages, U.S. Bureau of Labor Statistics

We can also browse directory listings provided by the Indiana Care Planning Council, which lists 511 active nursing home facilities on their site.1 Figure 4 shows these data at the city level. That same source also lists 180 in-home health care businesses (see Figure 5). It is important to note that directories such as these are provided to assist people in locating services, not as a comprehensive source of all facilities. But even still, it does provide us with a way to understand availability of services throughout the state in a very real way.

Figure 4: Nursing home facility directory listing by city

Figure 5: Home health care businesses by county

Indiana county map showing home health care businesses listed for each county.

Note: The Indiana Care Planning Council data are not comprehensive.
Source: IBRC, using Indiana Care Planning Council data (as of May 3, 2022)

Even before the COVID-19 pandemic, the nursing home care industry was experiencing significant levels of mergers and acquisitions, resulting in consolidation of ownership. Some communities saw their nearby nursing home close, with the distance to drive to those facilities expanding in larger metro areas becoming longer and longer.

The U.S. Office of Health Policy released a report in April 2022 documenting the changes of ownership of both hospitals and skilled nursing facilities. Across the country, nearly 350 hospitals and more than 3,000 nursing homes changed ownership between 2016 and 2021.2

We have also seen sporadic spikes in the number of news reports about nursing homes over the past few pandemic months and years. Editorials, like the one in the News and Tribune in February,3 recognized that a growing number of our elderly will require nursing facility care and that many of them will rely on Medicaid (65-85% according to the Indiana Health Care Association) to pay the costs. There was some traction gained during the pandemic for Medicare to pay for in-home elderly care. But, as revealed in the previous article, those services also struggle to find, hire and keep nurses, aides and other skilled staffing.

The IBRC will be releasing new population and labor force projections (for the state and counties) in the coming months, and we intend to continue examining workforce availability for skilled nursing home and in-home elderly care in the future.

Notes

  1. Data compiled May 3, 2022, from https://www.careindiana.org/list01_indiana_nursing_homes.htm.
  2. W. Pete Welch et al, “Changes in ownership of hospital and skilled nursing facilities,” U.S. Department of Health and Human Services Office of Health Policy, April 20, 2022, https://aspe.hhs.gov/reports/changes-ownership-hospital-skilled-nursing-facilities
  3. “EDITORIAL: There is no ducking the long-term care crisis ahead,” News and Tribune, February 28, 2022, https://tinyurl.com/j3ba5b2b