Understanding Nursing Home Spending and Staff Levels in the Context of Recent Nursing Staff Recommendations

John R. Bowblis
Christopher S. Brunt
Huiwen Xu
David C. Grabowski
Peer-Reviewed Article
February 2023
Cover of "Understanding Nursing Home Spending And Staff Levels In The Context Of Recent Nursing Staff Recommendations"


An analysis of a national sample of nursing homes finds a lack of association between proportion of revenue spent on nursing staff and nursing staff hours per resident.


The adequacy of nursing staff levels in nursing homes is a prominent concern for a diverse range of health care system stakeholders, as nursing staff levels and quality of care are closely correlated. In response to these concerns, the Centers for Medicare & Medicaid Services (CMS) recently proposed a rule to establish national minimum nurse staffing standards in nursing homes, including a prescribed minimum nurse staffing hours per resident day. Stakeholders have previously suggested that CMS mandate nursing home facilities to meet a minimum threshold of revenue allocated to direct-care services. To provide a greater understanding of these policy proposals in the context of nursing home operations, this study assessed nursing staff expenditures and the average nursing hours provided per patient in nursing homes across the United States.   


Through an analysis of a national sample of over 12,000 nursing homes, the authors found that the median facility allocated 23 percent of its revenue toward nursing staff expenditures and provided an average of 3.7 nursing hours worked per resident per day. The authors did not observe a clear association between nursing staff levels and expenditures, especially when considering facility payer mix. Facilities that received a greater share of revenue through Medicaid reported the lowest average nursing hours worked per resident, but a far greater than average share of revenue spent on nursing expenditures.


The findings suggest that policies mandating a specific proportion of revenue be allocated for nursing staffing would not guarantee adequate levels of nursing care for residents. This counterintuitive result is driven in part by Medicaid’s relatively low reimbursement rate, which means that facilities with a large portion of Medicaid residents must allocate a higher proportion of its total revenue to nursing staff to provide a given level of nursing staff time per resident. In light of these findings, the authors propose regulating the amount of nursing staff hours provided by facilities as a more viable policy solution to improving nursing home nurse staffing levels. This recommendation aligns with a recently proposed CMS rule change.

Posted to The Playbook on