House Bill 1452 of the 1981 General Assembly established a moratorium on the issuance of certificates of need for nursing home beds. The bill requires the Commissioner of Health to report on the most appropriate methodology for projecting nursing home bed need and to suggest a policy for utilizing nursing home beds in relation to alternatives.

An analysis of the existing methodology, which is described in the State Medical Facilities Plan, is presented. Based on data from the 1981 Nursing Home Survey, the analysis suggests some inadequacies in the methodology. A revised methodology is proposed which assumes that the demand for nursing home beds will continue at the current (1981) level. Based on this assumption, a total bed need of 24,040 beds, or over 1000 more than the current number of licensed and approved beds, is projected for 1985.

A second projection of needed beds is made, based on the assumption that a full range of community long term care services will be avaflable and that a consequent reduction in the demand for nursing home beds will occur. Under this assumption, 21,225 nursing home beds will be required by 1985.

The projection based on current demand suggests a need of almost 3000 more beds by 1985 than the second projection based on reduced demand. The annual cost of these 3000 beds to the Virginia Medicaid Program is estimated at $18.5 million (1980 dollars). National studies indicate that the public cost of serving these 3000 people in the community would be lower than the public cost of providing nursing home care.

Based on the analysis of nursing home bed need, the following policy for the Commonwealth on the utilization of nursing home services in relation to alternatives is proposed:

A full range of long term care services, both community based and institutional, should be available to citizens of the Commonwealth with long term care needs. The services should be organized and available in a manner which promotes the highest quality of care in the setting with the least public cost.

To implement the policy above, the following actions are recommended:

1) The General Assembly should extend the moratorium on the issuance of certificates of need for new nursing home beds for one year, and thereafter for as long as indicated from the annual analysis of bed need in the State Medical Facilities Plan; 2) The State Medical Facilities Plan should project the need for nursing home beds based on the revised methodology which assumes that a full system of community services will be developed, and 3) The General Assembly should implement the recommendations of related reports* on long term care which provide for the development of a full system of community services.

*HB 269 (Levels of Care), HB 1250 (Medicaid Issues), HJR 294 (Research, Administrative Proposal for Statewide Management), HJR 295 (Preadmission Screening).

Process for Development of Report

This report was developed with the advice and assistance of twenty agencies and organizations involved in the long term care system. Additionally, an Internal Review Committee on Long Term Care was formed within the Department. This committee, which represented the expertise within the Department on long term care, met several times to review materials, discuss relevant issues, and suggest revisions to the drafts of the report. Prior to finalizing the report, comments on the draft were received from a variety of sources and incorporated where appropriate.