The Traditional Financing Source That Can Help Close Gaps in Nursing Home Innovation

Conner Esworthy
David C. Grabowski
Robert G. Kramer
Anne Tumlinson
Case Example
November 2022
Cover of "The Traditional Financing Source That Can Help Close Gaps in Nursing Home Innovation".


Policy recommendations to incentivize the adoption of innovative nursing home models through HUD loans.


Small house nursing homes models, such as Green House homes, aim to reduce the total number of patients, cultivate a more home-like environment, and deliver care through a team-based approach. These models are backed by promising evidence suggesting they enhance quality of care. Despite the promising nature of such approaches, structural factors hinder widespread adoption. Operators of small nursing homes often face challenges in accessing the necessary upfront capital investments, which are usually in the form of Department of Housing and Urban Development (HUD) loans.


This article offers policy recommendations to expand access to HUD loans for nursing home operators seeking to establish smaller facilities with innovative care models, such as the Green House model. The authors propose offering loan incentives — such as quicker access to funds and lower rates — to operators committed to implementing these innovative care models. Additionally, they suggest linking access to favorable HUD loan terms with Centers for Medicare and Medicaid (CMS) quality measures.


These actionable policy recommendations promote adoption of innovative and promising nursing home models. Aligning HUD loans with CMS quality measures would not only support the adoption of small house nursing homes, but also likely create incentives for broader improvements in nursing home care quality.  

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