December 2018 Magazine

Arkansas’ Nursing Homes


by Dwain Hebda

Nursing homes generally do not evoke a positive image in the minds of many people, but according to the industry’s state trade association, that image is neither fair nor accurate.


Rachel Bunch serves as executive director of the Arkansas Health Care Assocation, representing her peers in the nursing home industry.

Rachel Bunch, executive director of the Arkansas Health Care Association, said today’s nursing homes provide a level of care that would surprise the average Arkansan.

“Arkansas has excelled in so many ways and made so many improvements in long-term care over the last 10 years,” Bunch says. “The way that our staffing requirements work have allowed us to increase our direct care staffing and increase the one-on-one time that staff members share with those residents.”

Bunch notes particular improvements in care for patients with dementia and Alzheimer’s. The AHCA began training programs specific to this area of medicine in 2014 and has made strides in its level of care for affected patients.

“We have been doing training for all of our caregivers and staff levels about dementia and how to communicate with someone who has dementia, how to communicate with their family members, how to work with them and how to provide care for them in a way where that caregiver understands what that person is dealing with,” Bunch says.

“One of the measures that CMS (Centers for Medicare and Medicaid Services) used was the number of long-term care residents on an anti-psychotic medication,” she adds. “That was something that you routinely saw in the past for people who had a dementia diagnosis in Arkansas. It was a high number; we were ranked 47th in the nation, and not in a good way, for that measurement. Now, because of the work that we’ve done with all of our partners, we’re the third most-improved state in the nation.”

Bunch says the business model of many of Arkansas’ skilled nursing facilities – the industry’s preferred term for nursing homes – is also not what it used to be. In addition to residential care, many facilities statewide have begun to offer certain short-term services such as physical therapy. Patients may stay for a short period of time or just come for an appointment under this model.

“People think of nursing homes from when you visited your parents or grandparents many years ago where it’s all long-term care,” she says. “Nursing facilities today definitely have a long-term care component, and that’s very important. It’s a very needed service for people who may not be able to safely go home and live in the community on their own.

“But we also do a lot of therapy services that allow people to go back home. We see more people who come in for rehab and go home. That’s the bigger part of the business model.”

To provide these services, owner-operators have reached out to area hospitals, and sometimes nursing colleges, to recruit and hire nurses and other health care professionals outright or offer those services via partnerships with other companies.

“Operators have to think outside of that building,” Bunch says. “They’re doing partnerships and collaborations with hospitals, with insurance companies, different kinds of programs outside of the facilities and then working with therapy companies who come in and contract for those services.”

Particularly in the rural reaches of the state, skilled nursing facilities are often the only outlet for receiving such health care services, especially for seniors who may not be ambulatory or have the means to travel to larger communities.

“Skilled nursing facilities have better outcomes for the elderly population,” Bunch says. “If you have someone who’s elderly that lives at home and they have a standard knee replacement, hip replacement, some kind of surgery that more and more people are having now, it’s going to be a lot better for them to go to a skilled nursing center for a short time.

READ MORE: Nursing Homes by Owner

“They’re going to have a better outcome and be ready to go back home where they can stay at home safer instead of just going straight home where they may have trouble getting in and out of the shower or preparing meals, all those things.”

This higher level of care appears to be in step with national trends. Mark Parkinson, president and CEO of the American Health Care Association which represents some 19,000 member facilities nationwide, wrote in a recent editorial that the strides the industry has made in the quality of care often go unreported.

“The facts make it clear that nursing home care has improved significantly,” Parkinson wrote. “The Center for Medicare & Medicaid Services calculates 24 clinical outcomes for all nursing homes. The CMS measures look at health outcomes, tracking important measures like the percentage of people readmitted to hospitals and the number of pressure ulcers and falls. Of those 24 key outcomes, nursing homes have improved on 20 in recent years.

“This didn’t happen by accident. It happened because our profession led the way. Seven years ago, we proposed the AHCA Quality Initiative to CMS and doubled down on our Baldrige-based Quality Achievement program … Since then, nursing homes have reduced the rate of people returning to the hospital by 30 percent. We’ve reduced the use of antipsychotic drugs by more than 37 percent.”

Arkansas’ skilled nursing facilities are also making significant social and economic impacts throughout the state. While not exclusively catering to poorer seniors, skilled nursing facilities do serve a predominantly low-income population who fund their care through Medicaid.

“I would say it’s just over 70 percent of the people that are in long-term care are on Medicaid in a nursing facility (in Arkansas). It’s a lower income population,” Bunch says. “The nursing facilities definitely serve as a social safety net for these people that are on Medicaid that would have no other resources or way to provide care for themselves.”

Picking up the tab on that care is a costly proposition and not unlike hospitals, facilities’ reimbursement for care from low income patients is a continuing challenge. Michael Morton, president of Central Arkansas Nursing Centers and owner of more than 30 nursing homes across Arkansas says the industry had been proactive in working with state legislators to devise a Medicaid reimbursement system that allows facilities to continue to deliver a high level of care even in the face of rising costs.

“We have one of the better payment methodologies, I think, of any other state,” says Morton. “The taxpayers of Arkansas spend approximately a dollar an hour to keep a nursing home patient. In 2017, the state’s taxpayers spent $26.13 a day, a little over a dollar an hour.”


The graph above shows the funding sources for Medicaid in Arkansas nursing homes, which includes tax dollars, operator fees and federal match.

The total Medicaid cost, per diem, for a nursing home patient in the state of Arkansas in 2017 was $188.35. The state’s $26.13 is matched by more than double in federal dollars. Nursing homes providers, according to Morton, are taxed on general revenue in order to obtain additional federal match dollars. The remaining portion is made up by private funds, social security and allowable costs to Medicaid.

“When it first started, in 2002, the state spent $12.58 a day for nursing home patients. In 15 years, we’ve gone up $15. That’s just the tax dollars in the state of Arkansas… And the nursing home industry ourselves levied the tax on our revenues so we could get a match from the federal government.”

As Medicaid reform and competition have complicated the marketplace, operators in the state have stepped up their work to outline the industry’s challenges to state lawmakers, something for which Morton makes no apologies.

“If you’re not active in the political processes of this business, you’re not going to be in business very long,” says Morton. “Our payment methodology is the result of us being active in the political process. Senators John Brown and Mike Beebe were the leading senators to help us get that (reimbursement) methodology in place. The methodology is in three pieces – direct, indirect and brick and mortar.


Michael Morton, president of Central Arkansas Nursing Centers, owns 32 facilities across the state and knows the industry as well as anyone.

“The indirect care, you can make money off of that. That and brick and mortar, that’s the profit center. The direct care category includes all nursing, food costs and medical supplies. It’s by far the largest of the total. There’s no profit in that,” he went on. “Say you spend $100, and the cap is $110, you only get paid $100. If you spend $110, you get $110. If you spend $112, you lose $2. You won’t make money off the direct care category… With that methodology, we can pay our employees more.”

Squeezing profitability out of this complex model helps preserve and expand the employment that nursing homes provide in Arkansas. This is not insignificant, given the jobs and economic activity created often come to communities sorely in need of both. According to AHCA statistics, the industry generates a $3 billion annual economic impact, employing more than 23,000 statewide and serving just over 39,000 patients. There are 227 skilled nursing facilities in Arkansas, of which 95 percent belong to the AHCA.

If that sounds like a lot of capacity, it’s just keeping up with demand. The current tidal wave of graying Baby Boomers is expected to have lasting ripple effects, to the tune of more than one in five Americans over age 65 by 2030, according to the U.S. Census. This means capacity issues rule the horizon for many facilities.


Kim Harden, executive director of Parkway Village in Little Rock, is confident in the future of the skilled nursing industry.

“From what we see right now, the market is contained with what we have,” says Kim Harden, executive director of Parkway Village in Little Rock. “We already have a lot of competition in the marketplace; I think maybe a little too much at the moment. But it’s going to be needed over the next 10 years.”

Harden says the future of the industry increasingly lies with communities that provide a continuum of care, that is, offering a range of levels of care from independent living to skilled nursing to serve residents as their health needs change.

“(Continuing care) has been a big plus for our residents,” she says. “They’ve been able to flow through the different levels of care, and that has been really important, especially where folks are married. One spouse may have high needs, and one spouse may be able to live independently, for example. We have that example on our campus. They couldn’t live in their own home anymore together because of one spouse’s needs, but they can be on the same campus and be together. That’s a big plus that most nursing homes in the state don’t have.”

READ MORE: Who is Michael Morton?

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