The nursing home industry in Iowa is grappling with a severe workforce crisis, exacerbated by the state’s failure to fund a pay-for-performance (P4P) program designed to address this very issue. Created 15 years ago, the program remains unfunded, leaving providers and caregivers wondering if it ever had a chance to make a difference.
Iowa’s P4P program, launched in 2009, aimed to incentivize nursing facilities to provide high-quality care. The program promised to reward facilities that offered quality care and “appropriate access to medical assistance program beneficiaries in a cost-effective manner,” according to the Iowa Department of Health and Human Services. However, the program’s promise quickly faded. “The legislature did not provide funding for the program in 2010 and has not funded the program since that time,” a December 2024 report from Iowa’s Health and Human Services noted.
This lack of funding coincides with alarming turnover rates reported in the “2024 Nursing Facilities Direct Care Worker Turnover Report.” The report reveals a staggering 77% attrition rate for certified aides, while registered nurses and licensed practical nurses experienced turnover rates of 66% and 68%, respectively. These figures paint a stark picture of the workforce challenges facing Iowa’s nursing homes.
Angela Schnepf, President and CEO of LeadingAge Iowa, points to low Medicare reimbursement rates as a key factor contributing to these high turnover rates. “It is estimated that Medicaid only covers about 80% of expenses to care for our seniors. With the majority of funding for aging services in Iowa coming from the government, providers are not able to increase fees to compete with companies like Amazon, Starbucks, and McDonald’s,” she said. This funding gap makes it difficult for nursing homes to offer competitive wages and benefits, leading many workers to seek employment in other industries.
While Iowa’s P4P program remains unfunded, research suggests that even if it had been implemented, its effectiveness might have been limited. A Health Services Research study, examining P4P programs implemented in other states around the same time Iowa launched its model, found that while some measures of nursing home quality improved, overall, Medicaid-based P4P programs did not result in consistent improvements in quality. This raises questions about the potential impact of Iowa’s program, even if it had received funding.
Despite the lack of state support, Iowa’s nursing homes are taking proactive steps to address the workforce crisis. Schnepf highlights some of these efforts, including on-site daycare for employees’ children and flexible scheduling options. “Communities and providers alike partner to provide on-site daycare for children of employees, they accommodate flexible schedules so workers can be home with their families for dinner and mission-based organizations do it all in addition to ensuring that their residents are given the best care possible,” she said.
Ultimately, the future of Iowa’s nursing home workforce hinges on addressing the systemic funding challenges that plague the industry. “Employees have bills to pay and inflation to combat. Government funding, particularly Medicaid, needs to increase,” Schnepf emphasized. “The ability of a provider to pay a competitive wage is vital in being able to attract and retain these workers.” Without adequate funding and support, Iowa’s nursing homes will continue to struggle to recruit and retain the dedicated caregivers needed to provide quality care for the state’s seniors.