Like many states, Nebraska has a nursing home shortage. Like most states, it also has protectionist regulations preventing anyone from remedying the problem. Butte Senior Living, a completed facility with a ready and willing buyer, will not only sit empty but also prevent any other nursing home from opening, unless the laws change.
In jurisdictions with anti-competitive certificate of need (CON) laws, a healthcare company hoping to open a new facility or otherwise expend major capital has to convince a regulatory board (and in most states, its own future competitors) that the amenities are needed in the area. The requisite time, money, and court battles sometimes lead licensed and competent practitioners to give up before they begin. Predictably, these rules consistently cause healthcare scarcity as well as price increases, but Nebraska and 37 other states still enforce them at the behest of current providers, who want to maintain their oligopolies.
A Promising Start
How did Nebraska, a state that appears to boast a relatively free market, end up in this healthcare bind? At first glance, it seems like a good place to avoid CON drama. The application requires just a $1,000 fee and a 60-day wait for a decision, much less than many other regions. And unlike most states, it does not allow direct interference from competitors at the initial request hearing.
Its rules are also less prohibitive than many places, only restricting nursing homes and other long-term care facilities. But the current status of Butte Senior Living illustrates all too well why the state needs to finally abolish the remaining vestiges of its law.
Quagmire In Butte
In a purported attempt to ideally plan expenditures, individual CON stipulations often proliferate and become absurdly complex. Even the term bed is problematic.
The state’s convoluted law mandates that at least 90% of long-term care beds be filled before any new facilities are built or beds added. But by law, a bed really refers to bed capacity.
When the owner of Butte Senior Living closed the center, the town itself wanted to purchase and reopen it. However, Nebraska’s care centers currently sit at less than 90% capacity statewide, so a moratorium on adding beds/capacity is in place. The moratorium applies even in a care desert such as Butte, which has no nearby facilities.
Even though the town is not trying to add physical beds to the existing Butte Senior Living building, in order to reopen it, it would need to pay for both the owner’s asking price and for the necessary bed capacity from another nursing home willing and able to sell it. And the town cannot afford to pay for both.
If not for the gravity of the situation, the twisted logic might be comical. A fully functional care facility sits empty and just out of reach of ready residents and a buyer, with only a bizarre law in between. And although some legislators are trying to change it, lobbyists have convinced some to keep protecting existing long-term care businesses from increased competition. When CON-supportive Sen. Glen Meyer was asked what he would say to upset Butte residents, he had a startling answer:
“Tough?”