The document discusses the crisis facing California's nursing home system, including a rapidly aging population that will double the number of seniors over 65 by 2025. Many nursing homes already struggle with inadequate staffing and budgets. High staff turnover contributes to poor quality of care in most homes, as evidenced by weight loss, residents left in bed, and physical restraints used on some residents. Additionally, 78% of nursing homes had violations of federal regulations during inspections in 2002. The growing senior population will increase the demand for long-term care services that the current system is ill-equipped to handle.

1. S N A P S H O T
Nursing Homes: A System in Crisis
2004

2. Nursing Homes:
A System in Crisis
C O N T E N T S
California’s Population Is Aging . . . . . . . 2
More Frail Elderly, More Care Needed . . 3
No Shortage of Space . . . . . . . . . . . . . . . 4
A Look at the Residents. . . . . . . . . . . . . . 5
How Long They Stay . . . . . . . . . . . . . . . . 6
Who Pays for Nursing Home Care . . . . . 7
Nursing Care. . . . . . . . . . . . . . . . . . . . . . . 8
Staff Turnover . . . . . . . . . . . . . . . . . . . . . . 9
Quality of Care . . . . . . . . . . . . . . . . . . . . 10
Violations of Federal Regulations . . . . . 11
Violations of State Regulations. . . . . . . 12
Complaints Filed . . . . . . . . . . . . . . . . . . . 13
For-profit vs. Nonprofit Performance . . 14
Financial State . . . . . . . . . . . . . . . . . . . . 15
Profitability of Nursing Homes
Receiving Medi-Cal . . . . . . . . . . . . . . . . 16
Additional Resources. . . . . . . . . . . . . . . 17
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 1
A Crisis in Care
The number of Californians age 65 and over is projected to double in the next
decade. Many of the facilities slated to provide long-term care for these individuals
already operate with deficits in staff and operating budgets. High staff turnover
among poorly paid personnel contributes to poor quality of care.
Serious problems in California’s nursing homes include:
● Only a small percentage meet the standards recommended for good
nursing care.
● Many show clinical signs of poor care: high percentages of residents
who lose weight, are left in bed all or most of the time, and are placed
in physical restraints.
● Most do not meet government compliance standards for care and safety
during routine inspections—and a number have had serious violations of both
state and federal regulations.
With an ample number of beds available, however, Californians do have choices
and can often find a bed in a facility that provides good quality care. This snapshot
examines the current state of California’s long-term care facilities* as they face
growing demands and diminishing resources.
*Unless otherwise indicated, long-term care facilities refer to all hospital-based and freestanding institutions,
including skilled nursing and intermediate care facilities.

3. Nursing Homes:
A System in Crisis
As the population ages, the
demand for long-term care
services will increase. The
number of California residents
age 65 and over is projected
to nearly double by 2025—a
larger growth rate than any
other state or the United
States overall (75 percent).
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 2
California’s Population Is Aging
20
30
40
50
60
70
2
3
4
5
6
7
2025201520052000
Source: U.S. Census Bureau, 2003: State Population Projections and Population Projections Program, Population Division.
Californians
Age 65 and Older (millions)
< R E T U R N T O C O N T E N T S
U.S. Residents
Age 65 and Older (millions)
CA 3.387 3.454 4.465 6.424
U.S. 35.835 36.370 45.959 62.641

4. Nursing Homes:
A System in Crisis
Americans are living longer.
In 2001, the life expectancy
was 77.2 years, compared to
75.5 just ten years earlier. The
number of California residents
age 85 and older—those
who are most likely to need
long-term care at home or in
nursing homes—is likely to
more than double by the year
2030, when the bulk of baby
boomers will come of
advanced age.
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 3
More Frail Elderly, More Care Needed
2030202020102000
449,762
638,166
727,737
1,032,655
Source: California State Department of Finance, Demographic Research Unit. CDC Life Expectancy.
www.cdc.gov/nchs/data/hus/tables/2003/03hus027.pdf
< R E T U R N T O C O N T E N T S
Californians, Age 85 and Older

5. Nursing Homes:
A System in Crisis
Despite the growth of the
aging population, fewer beds
in the state’s 1,400 skilled
nursing facilities are being
used because more older
Californians are able to live
independently or receive
care at home. The increased
vacancy rate in nursing
homes gives consumers
greater choice in most areas
of the state.
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 4
No Shortage of Space
20%
40%
60%
80%
100%
20012000199919981997199619951994199319921991
85.6%
80.9%
Source: California Office of Statewide Health Planning and Development (OSHPD): California Long-Term Care Services
Statewide Trends, 1991 to 2000 and 1992 to 2001.
Bed Occupancy Rates in California Long-term Care Facilities
< R E T U R N T O C O N T E N T S

6. Nursing Homes:
A System in Crisis
More than 110,000 individuals
live in California’s long-term
care facilities. The majority
of residents are 75 or older,
female, and white.
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 5
A Look at the Residents
Source: California Office of Statewide Health Planning and Development (OSHPD): California Long-Term Care Services
Statewide Trends, 1992–2001.
Residents of California Long-term Care Facilities, 2001
95 and older
7%
85 to 94
31%
75 to 84
31%
65 to 74
14%
55 to 64
7%
54 and younger
10%
by Age
by Gender by Ethnicity
Male
(33%)
Female
(67%)
Nonwhite
(29%)
White
(71%)
< R E T U R N T O C O N T E N T S

7. Nursing Homes:
A System in Crisis
The majority of those who
enter a nursing facility
need care temporarily to
recuperate or rehabilitate
after an illness or hospital
stay. Others live there for
the rest of their lives.
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 6
How Long They Stay
More than 7 years
.7%
5 to 7 years
.8%
3 to 5 years
1.5%
2 to 3 years
2%
1 to 2 years
4%
7 to 12 months
4%
3 to 6 months
7%
Less than 3 months
80%
Source: State of California, Health Care Quality and Analysis Division: Annual Utilization Reports of Hospitals and LTC
Facilities, 1992-2001.
Length of Stay in California Nursing Homes, 2001
< R E T U R N T O C O N T E N T S

8. Nursing Homes:
A System in Crisis
Medicare will only pay for
approved short-term care up
to 100 days. After Medicare
and private insurance bene-
fits are used, individuals and
their families must pay for
nursing home care directly
out-of-pocket—almost
$1 billion in 2002. Once
individuals spend their
income and assets, they
may become eligible for
Medi-Cal coverage, which
paid more than half of the
cost of care in freestanding
facilities in 2002.
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 7
Who Pays for Nursing Home Care
Medi-Cal
51%
Managed Care
and Other
9%
Self-pay by
Patient or Family
14%
Medicare
26%
*California nursing home population was comprised of 179 hospital-based and 1,238 freestanding (non-hospital-based) homes.
Source: State of California, Office of Statewide Health Planning and Development, 2003: LTC Annual Financial Data,
1/1/02 to 12/31/02 and Hospital Financial Data, 1/1/2002 to 6/30/2002.
2002 Total Expenditures* in California: $6.6 billion
< R E T U R N T O C O N T E N T S

9. Nursing Homes:
A System in Crisis
In 2002, well over one-third
of freestanding nursing
homes did not meet the state
mandated minimum nurse
staffing level of 3.2 hours
per resident. Ninety-three
percent did not meet the
4.1 hour daily standard
recommended in a recent
report to Centers for
Medicare and Medicaid
Services.
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 8
Nursing Care
46%
46%
8%
37%
56%
7%
Sources: University of California School of Nursing, Annual Report for California Nursing Home Search, San Francisco, CA. 2003;
Office of Statewide Health Planning and Development, 2003: Long-Term Care Annual Financial Data for 2001 and 2002;
U.S. Centers for Medicare and Medicaid Services: Appropriateness of Minimum Nurse Staffing Ratios in Nursing Homes,
Report to Congress, 2001.
Hours of Nursing per Resident per Day in California
Staffing Levels
Recommended
4.1 hours or more
State Mandated
3.2 hours or more
Below State Mandate
Less than 3.2 hours
2001 2002
< R E T U R N T O C O N T E N T S

10. Nursing Homes:
A System in Crisis
More than two-thirds of the
nursing staff in California
freestanding nursing homes
(the majority of them nursing
assistants earning an average
of $10.35 per hour), left their
jobs in the year 2002. The
annual turnover rates among
nursing homes ranged from
5 percent to 304 percent.
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 9
Staff Turnover
Left Job
69%
Remained
31%
Sources: Office of Statewide Health Planning and Development, 2003; Long Term Care Financial Data, 2002; and
Harrington, C. & Swan, J.H., 2003: Nursing Home Staffing, Turnover, and Case Mix. Medical Care Research and Review.
California Nursing Staff Who Left Their Job, 2002
< R E T U R N T O C O N T E N T S

11. Nursing Homes:
A System in Crisis
Weight loss, time spent in
bed, and use of physical
restraints commonly
indicate poor quality
of care for residents in
nursing homes.
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 10
Quality of Care
Placed in
Physical Restraints
In Bed All or
Most of the Time
Substantial
Weight Loss
10%
9%
17%
Source: University of California School of Nursing, Annual Report for California Nursing Home Search, San Francisco, CA. 2003.
Problems with Residents in California Nursing Homes, 2002
< R E T U R N T O C O N T E N T S

12. Nursing Homes:
A System in Crisis
Seventy-eight percent of all
California nursing homes
surveyed in 2002 did not
comply with federal care
and safety regulations during
mandatory inspections and
another 12 percent were
cited for very serious quality
of care problems.*
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 11
Violations of Federal Regulations
Serious
Noncompliance
78%
In Compliance
(no deficiencies)
3%
Substandard Care
1%
In Substantial
Compliance
(minor problems)
7%
Very Serious
Noncompliance
11%
*12 percent combines “Substandard Care” and “Very Serious Noncompliance.”
Source: University of California School of Nursing, Annual Report for California Nursing Home Search, San Francisco, CA. 2003.
Federal Inspection Findings of California Nursing Facilities, 2002
< R E T U R N T O C O N T E N T S

13. Nursing Homes:
A System in Crisis
The state has separate
standards that nursing homes
must meet. Nursing homes
are issued state deficiencies
as warnings to correct minor
problems and given citations
as fines for more serious
violations. Fewer than
one-third of the facilities
in California were free of
these state sanctions in 2002.
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 12
Violations of State Regulations
Deficiencies
Only
43%
Major Citations
6%
Severe Citations
.33%
Minor Citations
20%
No Citations or
Deficiencies
31%
Source: University of California School of Nursing, Annual Report for California Nursing Home Search, San Francisco, CA. 2003.
State Inspection Findings of California Nursing Facilities, 2002
< R E T U R N T O C O N T E N T S

14. Nursing Homes:
A System in Crisis
The number of complaints
against nursing homes
filed by those who saw
or suspected substandard
care or abuse increased
38 percent from
2000 to 2002.*
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 13
Complaints Filed
200220012000
6,319
7,026
8,712
*Includes complaints submitted to the California Department of Health Services Licensing and Certification program by
residents, their families, staff, and ombudsman.
Source: University of California School of Nursing, Annual Report for California Nursing Home Search, San Francisco, CA. 2003.
Number of Complaints Filed Against California Nursing Homes
< R E T U R N T O C O N T E N T S

15. Nursing Homes:
A System in Crisis
About 78 percent of the
nursing homes in the state
are owned by for-profit
organizations, while
18 percent are nonprofit
and 4 percent are operated
by a government entity such
as the city or county.
In 2002, freestanding, for-
profit facilities had lower
staffing levels, higher staff
turnover rates, and more
violations of health and
safety regulations than
nonprofit facilities.
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 14
For-profit vs. Nonprofit Performance
Source: University of California School of Nursing, Annual Report for California Nursing Home Search, San Francisco, CA. 2003.
3.3
4.1
Nursing Care Levels
Hours per Resident per Day
Staff Turnover Rates Federal Violations Found
70%
49%
11
8
For-profit Nonprofit
< R E T U R N T O C O N T E N T S

16. Nursing Homes:
A System in Crisis
Between 1999 and 2002,
160 California nursing
homes filed for bankruptcy,
indicating financial instability
and signaling possible
closure. Nearly half of the
state’s nursing homes
reported negative or zero
profit margins in 2002.
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 15
Financial State
One Percent
or more
53%
Zero Percent
3%
Negative Margins
44%
Source: University of California School of Nursing, Annual Report for California Nursing Home Search, San Francisco, CA. 2003.
Profit Margins for Freestanding California Nursing Homes, 2002
< R E T U R N T O C O N T E N T S

17. Nursing Homes:
A System in Crisis
Among freestanding
nursing homes that receive
Medi-Cal reimbursement,
the proportion of those
that broke even or lost
money grew by an average
of 26 percent.
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 16
Profitability of Nursing Homes
Receiving Medi-Cal
Profitability Share of Nursing Homes
(Net Income Margin) 2001 2002 Change
Better than 0% 66% 58% Ϫ12%
0% to less than Ϫ5% 17% 22% ϩ29%
Ϫ5% to less than Ϫ15% 12% 15% ϩ25%
Ϫ15% to less than Ϫ25% 3% 3% 0%
Ϫ25% and worse 2% 3% ϩ50%
Note: Numbers may not add up to 100 because of rounding.
Source: OSHPD LTC Financial Data for 2001 and 2002.
< R E T U R N T O C O N T E N T S

18. Nursing Homes:
A System in Crisis
©2004 CALIFORNIA HEALTHCARE FOUNDATION Nursing Homes: A System in Crisis 17
Additional Resources
California HealthCare Foundation www.chcf.org/topics/index.cfm?topic=CL110
A compendium of information and resources is available here.
Additional relevant articles by Barbara Kate Repa are archived at www.chcf.org.
To find them, enter “repa” at the search prompt.
• Nursing Home Inspections: The Data Behind the Ratings
• Troubled Budget Times Hit Nursing Homes Hard
California Nursing Home Search www.calnhs.org
This free, comprehensive consumer Web site provides ratings of California long-term
care facilities on key quality measures. It also includes information on staffing levels,
clinical quality measures, complaints and deficiencies, financial measures and
ownership, as well as a number of helpful resources such as paying for care.
Charlene Harrington, Ph.D. and Janis O’Meara, M.P.A. Annual Report for California
Nursing Home Search. University of California School of Nursing, San Francisco, CA.
2003. http://nurseweb.ucsf.edu/www/images/calnhs-rpt-03.pdf
< R E T U R N T O C O N T E N T S
C O N T A C T U S
California HealthCare
Foundation
476 Ninth Street
Oakland, CA 94607
t: 510.238.1040
f: 510.238.1388