MARCH 2021

FUNDAMENTAL
NURSING HOME
REFORM:
Evidence on Single-Resident
Rooms to Improve Personal
Experience and Public Health

BY
S HARON S ILOW -C ARROLL
D EBORAH P EARTREE
S USAN T UCKER
A NH P HAM
About Health Management Associates (HMA)
Health Management Associates (HMA) is an independent, national research and consulting firm
specializing in publicly funded health care and human services policy, programs, financing, and
evaluation. Dedicated to improving health and human services for at-risk populations, we serve
government agencies, public and private providers, health systems, health plans, community-based
organizations, institutional investors, foundations, and associations. Drawing knowledge from the front
lines of health care delivery and reform, we work shoulder-to-shoulder as partners with our clients to
explore innovative solutions to complex challenges. HMA has 22 offices and over 200 multidisciplinary
consultants coast to coast.

About the Authors

Sharon Silow-Carroll, MSW, MBA, Managing Principal, has more than 30 years of experience in
healthcare policy research and analysis, focusing on innovative initiatives to enhance healthcare system
quality, access, efficiency, and coverage. She has supported safety net systems and health plans in
developing new approaches to serving populations with low income and special needs.
Deborah A. Peartree, RN, MS, Senior Consultant, has more than 35 years of experience overseeing
performance and quality improvement, clinical operations, and establishing collaborations to better
serve at-risk populations across multiple settings including long-term care, Medicaid managed care
organizations, independent practice associations, primary care practices, home care, and public health
entities.
Susan Tucker, CPA, Principal, has extensive expertise in long-term services and supports (LTSS)
operations, compliance, and finance for programs at the local, state, and national level. As a certified
public accountant, she has conducted public accounting and work with non-profit social service
organizations.
Anh Pham, Consultant, provides support on a variety of client projects, concentrating in the areas of
behavioral health, correctional health, child and maternal health, and LTSS. An established researcher,
Anh applies both quantitative and qualitative research methods to develop public health solutions.

About the Funder

This report was supported by Jim Branscum, a long-term care provider and owner of skilled nursing
facilities in Michigan. He has been a strong advocate for nursing home residents, their families, and
employees for over 50 years. The findings and recommendations presented in this report do not
necessarily represent those of the funder.
 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

Table of Contents
Summary ........................................................................................................................................................ 2
Introduction ................................................................................................................................................... 4
Assessment of Single-Resident Rooms .......................................................................................................... 5
Need for a Roadmap for Nursing Home Reform with Facility Redesign .....................................................10
Conclusion: A Call to Start the Conversation and Roll Up Our Sleeves .......................................................15
Appendix: Financial Analysis and Considerations for Transforming Long-term Care with Single-Resident
Rooms in Michigan, by Plante Moran .........................................................................................................16
Citations/References ...................................................................................................................................22
 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

Summary
The COVID-19 pandemic has highlighted nursing home safety and infection control as critical public
health issues. The pandemic’s outsized impact on residents and staff in skilled nursing facilities (SNFs)
underscores the immediate need to re-examine the relationship between the physical environment and
infection control, health outcomes, quality of life, and overall resident and staff safety. Focusing on one
central aspect of the nursing home physical environment – room occupancy – Health Management
Associates (HMA) conducted a comprehensive review of the research on the impact of single-resident
rooms versus multi-resident rooms with the following results.

Hospital studies demonstrate that single-occupancy rooms decrease the risk of acquiring and
spreading infections.
Long-term care facilities’ experience with COVID-19 increased awareness of the risk of infection
in multi-resident rooms, and a recent study of nursing homes in Canada found that lower room
occupancy was associated with lower COVID-19 infection rates and mortality.
Single-resident rooms have been associated with improved sleep patterns and reduced agitation
and aggressive behavior among people with dementia in long-term care facilities, and fewer
medication errors and adverse outcomes in hospitals.
Single-occupancy rooms allow greater flexibility in adapting care as the patient’s/resident’s
condition and acuity change, therefore requiring fewer patient transfers.
Single-resident rooms in nursing homes enhance residents’ sense of home, privacy, and control.
Studies conducted in long-term care facilities and hospitals found higher resident/patient
satisfaction and family preference for single-resident rooms.
Hospital nursing staff view single rooms favorably on multiple dimensions; further study is needed
to better understand the association between nursing home staff satisfaction and room
occupancy.
The compelling evidence on the benefits of single-resident rooms calls for exploring options to convert
rooms from multiple to single occupancy in licensed/certified SNFs as a key component of evidence-
based and person-centered nursing home reform. The decades-long decline in nursing home
occupancy, despite the aging of the population, suggests some existing multi-resident rooms can be
converted to single-resident rooms without creating shortages of needed nursing home beds.

Converting multi-resident rooms to single-resident rooms will require initial investments in

reconstruction and entail higher ongoing operating and capital costs (further analysis is needed to refine
estimates of the costs as well as potential long-term savings). The mix of current payer sources for
nursing home services and construction suggests that financing conversion may require multiple
strategies and funding sources. Because Medicaid and Medicare together cover more than half of
nursing care facility expenditures, and as the lead federal agency overseeing nursing home quality and
safety, the Centers for Medicare & Medicaid Services (CMS) should participate in discussions about
single-resident rooms and their benefits and costs, as part of nursing home reform. The United States

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

Department of Housing and Urban Development (HUD), which currently insures loans to facilitate the
construction of long-term care facilities, and the Centers for Disease Control and Prevention (CDC),
which plays a central role in identifying and mitigating the risk of infectious diseases such as COVID-19
and future threats, should each have an interest in exploring single-resident rooms in nursing facilities.

In addition to federal agencies, key stakeholders including nursing home residents and advocates,
providers and staff, owners, administrators, and policymakers need to participate in discussing options
for promoting, incentivizing, and financing movement toward a healthier and safer nursing home
environment.

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

Introduction
Approximately 1.4 million individuals, 84 percent of whom are age 65 and over, resided in about 15,600
U.S. nursing homes in 2016.1 The majority of these facilities were constructed after the 1965 Medicare
and Medicaid amendments to the Social Security Act, with a distinct “institutional” design that included
primarily double occupancy rooms. 2 Over the decades, there has been a growing recognition that the
design, or “built environment,” plays an instrumental role in residents’ health and well-being. The
Facility Guidelines Institute (FGI), an independent organization that develops guidance for the planning,
design, and construction of hospitals, outpatient facilities, and residential health, care, and support
facilities, recognizes that the built environment has a profound effect on health, productivity, and the
natural environment.3

At the same time, the focus of long-term care has been shifting toward person-centered care, defined as
a systemized approach to delivering health care in a way that centers on the perspective of the whole
patient and their loved ones, while promoting a healthy, encouraging environment for caregivers and
addressing the health needs of the organization’s surrounding community.4 A convergence of these
environmentally-aware and person-centered movements is reflected in the growth of long-term care
models such as the Pioneer Network 5, Eden Alternative6, and the Green House Project. Green House
homes, for example, typically have a small number of beds, private rooms, and an emphasis on quality
of care and meaningful lives.7

In the midst of these movements, the COVID-19 pandemic has highlighted nursing home safety and
infection control as a critical public health issue. The pandemic’s impact on residents and staff in long-
term care facilities underscores the immediate need to re-examine the relationship between the
physical environment and infection control, health outcomes, quality of life, and overall safety and well-
being. Terry Fulmer, et. al., point out that the current nursing home design with double-occupancy
rooms “has been an especially challenging factor during the COVID-19 pandemic.”8

This report examines one central aspect of the nursing home physical environment: room occupancy.
HMA examined research on single-resident rooms and multi-resident rooms. Because occupancy-related
studies in nursing homes are limited, we extended our review to include other residential, long-term
care and acute care (hospital) settings, with the assumption that findings in the latter environments
(with appropriate caveats) could inform design considerations in licensed/certified SNFs.i HMA
conducted literature reviews using key words to search PubMed and other literature review tools. We
also conducted an environmental scan of websites and grey literature, including reports, policy
statements, presentations, and issues papers from governmental agencies (such as CDC and CMS) and
organizations representing the long-term care industry and patient/resident advocates. We summarize
the findings and propose additional areas for exploration, discussion, and potential actions based on the
findings.

iWhen describing literature findings, we attempted to use the terminology (e.g., nursing home, skilled nursing
facility/SNF, long-term care facility) used in the studies cited; as a result, multiple terms are used in this report.

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

Assessment of Single-Resident Rooms

Synthesis: Single-resident rooms are associated with decreased risk of facility-
acquired infections, medication errors, resident anxiety, and incidence of
aggressive behavior, while improving sleep patterns, sense of privacy, and
satisfaction.
The evidence supporting single-resident rooms is multi-layered, demonstrating benefits in a range of
interrelated domains. The Facility Guidelines Institute (FGI) recommendations for single-resident rooms
are based on a comprehensive report by Chaudhury et. al., commissioned by FGI’s Research Committee.
The report found that single-resident rooms as a design element are associated with improvements in
patient care, a reduction in the risk of cross infection, and greater flexibility in operation. 9 Additional
literature reviews found that single-resident rooms are also associated with reduced patient/resident
stress, improved patient outcomes, and increased privacy and accessibility for patients and families. 10
Single-resident room are likely to remain a recommendation in the design and construction of
residential care facilities.

“Evidence suggests that single-resident rooms decrease risks for medication errors,
health care-acquired infections, resident anxiety, and incidents of aggressive behavior
while improving resident sleep patterns and staff effectiveness.”11
-Facility Guidelines Institute, 2018

Hospital studies demonstrate that single-occupancy rooms decrease the risk

of acquiring and spreading infections.
Clinical studies primarily focusing on acute care (hospital) settings demonstrate that rates of nosocomial
infections (infections acquired while in a facility that were not present at the time of admission) are
reduced in single rooms compared with multiple-occupancy patient rooms, even when controlling for
hand washing practices and air quality (other key factors affecting control of nosocomial infection).12
The risk of acquiring infections of several species of pseudomonas and candida, antibiotic-resistant
organisms such as methicillin-resistant staphylococcus aureus (MRSA) and vancomycin-resistant
enterococcus (VRE), as well as clostridium difficile, have been shown to be lower in single-patient rooms
compared to multi-patient rooms.13,14

“Isolation of patients is one of the recommended precautions to prevent the

occurrence of infection and isolation can only be possible through confinement of the
patient in a private room, often with specialized ventilation systems.”15
-Chaudhury et al., 2004

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

Researchers further describe isolation and ventilation as two important environmental infection control
measures. Infected patients or patients highly susceptible to infections need to be isolated in private
rooms with proper ventilation systems in order to stop infection from spreading and to reduce the
possibility of developing new infections.16 Single rooms allow for separation upon admission, preventing
asymptomatic carriers of pathogens from infecting other residents. In addition, patients in single rooms
who are found to have an infection do not need to be transferred to a different room, saving staff
time.17 Single rooms also allow for more effective management of air changes to help reduce the risk of
airborne or aerosol droplet spread infections.18

Long-term care facilities’ experience with COVID-19 created an increased

awareness of the risk of infection in multi-resident rooms.
According to a Kaiser Family Foundation analysis of state-reported COVID-19 data through January 5,
2021, COVID-19 cases in long-term care facilities represented six percent of all total cases in the United
States, but 38 percent of deaths. 19 While several factors contributed to the impact of COVID-19 among
the nursing home population, perhaps the most widely acknowledged are the vulnerability of this
population – the risk of severe illness is significantly higher among older individuals with underlying
chronic conditions and co-morbidities20 – and the difficulty in limiting the spread of infection in
congregate living facilities. The transmission of COVID-19 occurs mainly among people who are in close
contact (within about six feet) for prolonged periods of time and can be passed by asymptomatic
individuals.21

Recent studies during the pandemic confirm the role of room occupancy in infection control. A 2020
study of nursing homes in Ontario, Canada found that nursing homes with higher occupancy rooms were
associated with increased risk of COVID-19 infection and higher mortality rates compared to low
occupancy rooms.22 Researchers in Australia found that COVID-19 patients in isolation and quarantine in
single rooms experienced reduced infection risk, although they also reported negative experiences due
to lack of social interactions, limited mobility, and disconnection with the outside world. 23 In a study
comparing COVID-19 incidence and mortality rates occurring in small nursing homes housing 10 to 12
residents in private rooms versus traditional nursing homes, Zimmerman et. al. found lower incidence
and mortality rates in the smaller facilities with private rooms, especially when compared to nursing
homes with greater than 50 beds. 24

“Given the impending consequences of infectious outbreaks, it is imperative that

health care leaders collaborate with architects and designers to invest in long-term
care facility designs for maximum resiliency.”25
-Anderson et al., 2020

The CDC recommends placing nursing home residents who develop COVID-19, new admissions, and
individuals with suspected infection in single-resident rooms to prevent transmission to other

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

residents.26 The ability to physically separate residents is enhanced when rooms are occupied by a
single-resident rather than transferring a resident after potentially exposing a roommate to infection.

Single-resident rooms have been associated with improved sleep patterns and
reduced agitation in long-term care facilities, and fewer patient transfers and
medication errors in hospitals.
Individuals with dementia can be particularly sensitive to noise and high levels of activity, leading to
stress, agitation, and disruptive behavior. According to Herrmann and Flick’s study of sleep patterns in
nursing homes, residents reported that their sleep was disturbed by noise and light caused by other
residents or staff, and by disoriented roommates and roommates who need frequent care at night.27
Indeed, residents with Alzheimer’s disease appear to benefit from the reduced stimulation environment
offered by private rooms, according to a study of retirement residence patients in Iowa who were
calmer and less agitated when moved to a reduced stimulation unit.28 A similar study conducted by
Morgan and Stewart found that as patients with dementia were moved from a high-density special care
unit to a low-density unit with private rooms, disruptive behaviors decreased due to less stimulation.29

Evidence suggests that single-resident rooms in hospitals and other settings are also associated with
fewer adverse outcomes. The FGI summarizes numerous studies demonstrating that single-resident
rooms reduce medical errors, falls, resident stress, and staff injuries while improving resident sleep and
social support – increasing the safety and effectiveness of care.30 Chaudhury’s extensive literature
review found that single rooms in acute care settings support patient-centered care with fewer room-to-
room transfers and greater flexibility in adapting care as resident condition and acuity change over time.
Chaudhury also cited several studies demonstrating that single-resident rooms and decreased transfers
enhance safety by allowing staff to more readily identify and communicate with residents, identify
emerging concerns, respond to resident needs, and accurately provide medications.31

“Because patients in single-bed rooms are rarely moved, medication errors are
greatly reduced.”32
-Bobrow et al., 2000

Findings on safety-related outcomes are mixed for acute care settings. Simon and colleagues found that
transferring patients to newly built single hospital rooms did not result in either benefit or harm,
although there may be short-term risks associated with the transfer itself.33

Single-resident rooms in nursing homes enhance privacy, sense of home, and

sense of control.
Long-term care facilities are often necessary alternative places of residence for individuals who can no
longer remain safely in their own home and require professional and personal care assistance. The move
to a residential care facility, however, is typically associated with the loss of privacy, limited boundaries,
fixed schedules and routines, and loss of control. 34 Based on in-depth interviews with nursing home

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

residents, Choi, et. al. found that causes of depression were associated with: lack of privacy and
frustration with having a roommate and sharing a bathroom; social isolation; loss of independence,
freedom, autonomy, and continuity with their past life; and other situational factors. 35

“Nursing homes present special design challenges in that for most residents the
nursing home is not just a facility, but indeed their home. …The challenge is to design
a nursing home that is sensitive and responsive to long-term human needs and well-
being, both physical and emotional.”36
-Carr, 2017

Additional research links room occupancy with residents’ sense of privacy and home. A qualitative study
found that private rooms provided residents a place to retreat to be alone or relax. 37 Several studies
stressed the importance of residents being on their own, being able to do domestic chores, and being
able to withdraw to their own room as necessary components to creating their own sense of home. 38,39
Private rooms also enable residents the opportunity to engage with others in private. 40 Larger private
rooms promote increased social interaction with visitors. 41

“The desire for a private room may have a foundation in having opportunities to be
on one’s own, wishing for privacy, and having personal belongings around oneself.”42
-Rijnaard et al., 2016

Nursing home residents’ sense of home is also affected by perceptions of autonomy and control over
one’s environment. Single occupancy gives residents greater ability to personalize their space – for
example, drill holes in walls and hang personal items – which establishes their territory and improves
their sense of security and identity. 43 Residents who “create” their own space usually consider the
nursing facility their home. 44 Private rooms offer residents greater autonomy to invite or not invite
someone to their room,45 and to lock their doors which gives them the perception of control. 46

Additionally, single-resident rooms provide a private space in which residents can control personal
information and discuss their needs with family members and friends.47 Multiple occupants in a room
make it nearly impossible for residents to have adequate privacy and dignity and creates challenges for
staff to communicate with residents without violating confidentiality guidelines. 48,49

Studies of acute care settings further link private rooms with greater control over a patient’s physical
and emotional wellbeing. One study found that by not being subjected to a roommate, patients have
better control of their blood pressure, stress, and their personal identity. 50 Other research
demonstrated that sharing rooms inhibits patients’ control over noise levels, lighting, and room
temperature, which can affect stress and disrupt sleep and adherence to medication.51,52

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

Studies conducted in long-term care facilities and hospitals found higher

resident and family satisfaction and preference for single-resident rooms.
According to a Contemporary Long-Term Care survey of assisted living facilities in the United States, 82
percent of those surveyed preferred a private room and only four percent preferred a shared room. 53
Nursing home residents in a qualitative study also expressed dissatisfaction with the idea of a shared
room.54 Morgan and Stewart found that family members of residents with dementia moved to private
rooms were pleased because they were able to personalize the rooms and the resident had greater
privacy.55

These findings mirror studies of acute care settings demonstrating that patients in private rooms were
more satisfied with their care than those who shared their room with another patient.56,57 Ulrich
identified that roommates can be a source of stress. In particular, roommates who are unfriendly, have
too many visitors, and are seriously ill can have negative effects on other patients. 58

While evidence is limited, it appears that hospital nursing staff view single
rooms favorably, and nursing home staff satisfaction is associated with
resident satisfaction and lower risk of adverse outcomes.
There is limited literature on staff satisfaction related to patient room configuration. In a pilot study
using semi-structured interviews with acute care nursing staff, most participants responded more
favorably to single rooms than double rooms on the majority of categories, including greater staff
efficiency, flexibility for accommodating family, suitability for examination of patients by health care
personnel, patient comfort level, patient recovery rate, less probability of medication errors, and less
probability of diet mix-ups. Conversely, staff considered double-occupancy rooms helpful in reducing the
walking distance from the nursing station and in increasing their ability to visibility monitor patients. 59
As this pilot study focused on the acute care setting and had a limited sample size, it would be helpful to
conduct comparable assessments of staff satisfaction and perceptions about single versus multiple-
resident rooms in long-term care facilities.

“In comparing single- versus double-occupancy rooms, it is evident that nurses

clearly favored single-occupancy rooms.”60
-Chaudhury et al., 2004

A study on nursing home staff satisfaction noted that residents and employees of nursing homes share
the same environment and the potential hazards such as communicable disease, interpersonal stress,
and risk of assault, and that these stressors might negatively affect the staff members’ ability to provide
high-quality care. They also found nursing home employee satisfaction with their work environment is
positively associated with resident satisfaction and inversely associated with resident risk of adverse
outcomes such as falls, pressure ulcers and weight loss. 61 This study defined the work environment
broadly, allowing the hypothesis that many aspects of the nursing home environment that affect disease

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

transmission and stress, including room occupancy, may similarly affect both residents and staff
satisfaction.

The industry needs a comprehensive, person-centered, and evidence-based

approach to improve nursing home safety and outcomes.
Many attributes have been deemed critical for nursing home redesign and reform. Since the 1980s, a
“culture-change movement” has intended to transform long-term care facilities from detached health
care institutions into individualized, person-centered homes that promote value and quality of care.62 In
2006, a meeting of stakeholders convened at the Agency for Healthcare Research and Quality identified
that the “ideal” person-centered nursing home features resident direction, homelike atmosphere, close
relationships, staff empowerment, collaborative decision making, and quality improvement processes. 63
According to the FGI Guidelines for Design and Construction of Residential Health, Care, and Support
Facilities, a person-centered care model provides “true resident-directed care that honors the rhythm of
each individual’s life as dictated by [their] desires.”64

New recommendations for long-term care facilities have emerged in the midst of the COVID-19
pandemic. In September 2020, the Coronavirus Commission for Safety and Quality in Nursing Homes
issued a report with recommendations to improve infection prevention and control measures, safety
procedures, and quality of life of nursing home residents. It included immediate steps for testing and
screening, equipment and PPE, cohorting (separating residents and staff according to their infection
status), and other actions to address the pandemic in real time. In addition, the Commission presented
five key areas for long-term improvement: strengthening the nursing home workforce; improving
nursing home data; facility planning and renovations (incorporating lessons about disease prevention
and control); payment reform; and resident-driven care with shared decision-making.65

The New Jersey Department of Health contracted with Manatt Health (Manatt) to assess long-term care
facility experience during the COVID-19 pandemic and provide recommendations to improve quality,
resilience, and safety. As part of their recommendations, Manatt suggested modernizing facilities with
more single rooms and updated HVAC, broadband, and IT infrastructure.66

Need for a Roadmap for Nursing Home Reform with Facility Redesign
The pandemic’s characteristics and the existing nursing home environment
created a “perfect storm,” requiring reimagination and reform.
Many factors contributed to nursing homes becoming COVID-19 hotspots, including: lack of experience
and knowledge about the COVID-19 virus, asymptomatic carriers and airborne transmission of the virus,
the vulnerability of an elderly nursing home population with co-morbidities, nursing home staffing
involving individual employees serving a large number of residents and often working in multiple
facilities, and communal spaces that promote residents’ socialization but inhibit infection control. The
industry would benefit from reimagining and reforming nursing homes to avoid similar or worse
outcomes in future health emergencies.

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

The evidence strongly suggests that single-resident rooms in nursing homes

should be a key component of a long-term care reform strategy.
Compelling evidence described in this report on the benefits of single-resident rooms suggests that
nursing home reform should consider single-resident rooms along with other person-centered and
evidence-based practices to reduce infection transmission and improve health outcomes, resident and
family satisfaction, and quality of life. The Coronavirus Commission for Safety and Quality in Nursing
Homes’ facility-based recommendations include: “Encourage nursing homes to assign residents to
single-occupancy rooms in facilities that can accommodate this approach without detrimental reduction
in census. Examine changes to the CMS reimbursement that would promote single occupancy
(temporarily during pandemic as well as in the long-term).”67

Declining occupancy levels in nursing homes create an opportunity to shift

existing multiple to single-resident rooms without creating shortages.
The occupancy rate for certified nursing facilities declined significantly during the pandemic from 80
percent in 201968 to 73 percent in May 2020, and 69 percent in December 2020.ii,69 Most experts expect
some rebound in nursing home census once vaccinations are widely available and hospitals are able to
resume more procedures that result in transfers to long term care facilities for short-term rehabilitative
stays. Others expect that wariness about moving to, or sending family members to, nursing homes will
continue for an unknown period.

Importantly, nursing homes have seen a decline in occupancy for decades, despite the aging of the
population. According to the CDC, the occupancy rate for certified nursing facilities nationwide declined
by 4.8 percentage points and the number of residents declined by 9 percent between 1995 to 2016.70
This trend has been attributed largely to increasing Medicaid funding for care and supports in
individuals’ homes and communities,71 and federal payment models designed to avoid nursing home
stays after certain hospital procedures.72 The decline opens the possibility to convert current resident
rooms to single-resident rooms without creating shortages in needed nursing home beds.

Financing nursing facility improvements, including shifting to single-resident

rooms, will need to address initial investments and increases in ongoing
operating and capital costs.
The study by Chaudhury, et. al., commissioned by the FGI research committee, found that ‘‘first costs’’
(initial construction) of the single-patient room in acute care settings are higher compared with multi-
bed rooms, but benefits for safety and comfort of the patient over the life of this room balance the up-
front investment.73

ii
HMA conducted analysis of the CMS Division of Nursing Homes/Quality, Safety, and Oversight Group/Center for
Clinical Standards and Quality’s COVID-19 Nursing Home Dataset that calculated occupancy rate based on total
number of occupied beds as percentage of number of all beds reported.

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

“Fundamental design changes are costly and may take longer to implement but are
necessary due to the prolonged risks to residents from COVID-19 and the need to
position facilities to manage future epidemics.”74
- The MITRE Corporation, 2020

Focusing on long-term care, the Coronavirus Commission for Safety and Quality in Nursing Homes
similarly acknowledges the costs of redesigning facilities but asserts that the benefits in controlling the
spread of communicable diseases outweigh these costs. Commission members, including nursing home
residents, consumer advocates, nursing home owners and administrators, infectious disease experts,
academicians, state authorities, and others, discussed the need for long-term solutions to improve the
physical layout of nursing homes to better control infection spread and highlighted single-occupancy
rooms as a priority. Yet they pointed out that current financing of long-term care does not support this
design. The Commission noted the lack of physical space as a limitation to changing the physical layout
and that modifications to HVAC systems and other adaptations are costly and would require
supplemental funding in many cases. 75 A key recommendation is to “Collaboratively establish long-term
priorities and seek appropriate funding streams for nursing homes to redesign and/or strengthen
facilities against infectious diseases.”76

A financial analysis of data from two multi-facility licensed skilled care organizations in Michigan by
Plante Moran estimates the costs of transitioning to single-resident rooms. Summarized by Plante
Moran authors in the Appendix, the analysis estimates an average increase in operating costs ranging
from $16 to $25 per patient day, and ongoing capital cost increases from $20 to $40 per patient day.
The authors note that there are many variables that would influence the actual increase in cost,
including the size and layout of the facility, resident acuity, age and quality of HVAC, construction cost,
type of financing and interest rate, and other considerations. Further analysis is needed to assess
expected costs of transitioning to single-resident rooms in other facilities and other states.

Nursing Home payer sources and ownership are mixed — suggesting that re-
imagining the physical environment may require multiple strategies and
funding sources.
Nursing home facilities are reimbursed by multiple payers, with Medicaid, Medicare, and out-of-pocket
payments the largest sources (See Figure 1).

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

Figure 1: Nursing Facility Expenditures by Payer, 2018

Other payers
Private 11%
Insurance Medicaid
10% 29%

Medicare
23%
Out of Pocket
27%

Source: Medicaid and CHIP Payment and Access Commission. (2020, August 17). National Health Expenditures by Type and Payer, 2018.
Retrieved February 1, 2021, from Medicaid and CHIP Payment and Access Commission website: https://www.macpac.gov/wp-
content/uploads/2020/12/EXHIBIT-3.-National-Health-Expenditures-by-Type-and-Payer-2018.pdf.

Medicaid is the largest single payer for nursing home facilities ($49.9 billion in 2018iii,77); Medicaid
coverage for nursing home care is based primarily on income eligibility, after the resident “spends
down” personal resources. Medicare covers a limited stay in a nursing home for skilled care when
patients need daily skilled nursing or rehabilitation services (such as wound care, injections, and physical
therapy) following a three-day in-patient admission for a related illness or injury. CMS waived the three-
day stay requirement during the COVID-19 public health emergency. For the first twenty days, Medicare
covers the costs in a SNF; from days twenty-one through one hundred, the beneficiary is required to pay
a coinsurance amount of $185.50 per day; and the beneficiary must pay all of the SNF care costs
incurred after one hundred days.78 Medicare spent $38.1 billion in nursing care facility expenditures in
2018. Individuals paid $44.8 billion out-of-pocket for nursing care facilities, private insurance covered
$17.1 billion, and other health insurance and third-party payers paid the remaining $18.5 billion.79

Strategies for nursing homes considering converting to single-resident rooms may be influenced by
ownership structure as well as payer sources. The CDC reports that in 2016: 69.3 percent of nursing
homes were for-profitiv,80; 23.5 percent were nonprofit; and 7.2 percent were government or other
status. In addition, 57.6 percent of nursing homes were chain-affiliated; 97.5 percent were Medicare-
certified; and 95.2 percent were Medicaid-certified.81

iiiThe analysis defined this category as including nursing and rehabilitative services provided in freestanding
nursing home facilities that are generally provided for an extended period of time by registered or licensed
practical nurses and other staff.
iv Real estate investment trusts, known as REITs, investment firms, and private equity groups often rent property

under long-term leases to for-profit nursing homes. A New York Times review of regulatory findings found that six
large REITS have business interest in more than 1,500 nursing homes.

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

Creative options for financing reform must be explored, including building on

existing mechanisms and new sources.
Given that Medicare and Medicaid together cover more than half of nursing care facility expenditures,
and as the lead federal agency with nursing home quality and safety oversight, CMS should participate in
discussions about nursing home redesign, its benefits and costs, as well as overall payment reform.
According to Fulmer, et. al., “As the primary financiers for short- and long-term nursing home stays
respectively, the payment rules of Medicare and Medicaid will play crucial roles in realizing a new vision
for the appropriate services and settings for the care nursing homes currently provide.”82

Another potential vehicle for testing the impact of converting to single-resident rooms is CMS’ Center
for Medicare & Medicaid Innovation (CMMI), which provides funding for demonstrations to test out
potential improvements to health care systems. Seeking large-scale, innovative models, CMMI could be
invited to discuss and consider testing the viability and sustainability of single versus multiple resident
rooms in nursing homes that improve or maintain quality or reduce costs.

HUD insures loans to facilitate the construction of long-term care facilities and should participate in
discussions on potential financing mechanisms for increasing single-resident rooms. The Healthcare
Mortgage Insurance Program (Section 232 of the National Housing Act [12 USC. 1715w]) insures
mortgage loans for construction and substantial rehabilitation of nursing homes, intermediate care
facilities, board and care homes, and assisted living facilities. Section 232/223(f) allows for the purchase
or refinancing with or without repairs of existing projects not requiring substantial rehabilitation.
Investors, builders, developers, public entities (nursing homes), and private nonprofit corporation and
associations are eligible for these mortgages. For nursing homes, applicants may be public agencies that
are licensed or regulated by a state to care for convalescents and people who need nursing or
intermediate care.v

The CDC is the nation’s health protection agency, whose mission is to save lives and protect people from
health threats. To accomplish their mission, CDC conducts critical scientific research and provides health
information that protects our nation against expensive and dangerous health threats and responds
when threats arise.83 Because the CDC plays an important role in identifying and mitigating the risk of
infectious diseases such as COVD-19, they may be an important participant and potential partner in the
discussion about the benefits of single-resident rooms in nursing facilities.

vA potential applicant must submit a Certificate of Need from the State agency designated by the Public Health
Service Act. (If no State agency exists, an alternative study is required.) No Certificate of Need is required for board
and care homes or assisted living facilities; instead, the applicant needs a statement from the appropriate State
agency. The applicant must also provide documents that demonstrate the appropriateness of the property and the
qualifications of the lender.

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

Conclusion: A Call to Start the Conversation and Roll Up Our Sleeves

The COVID-19 pandemic’s devastating toll on long-term care facility residents and staff is a wakeup call,
underscoring the need to transform the long-term care environment as a public health measure. This
report presented evidence – based on academic studies and lessons from the current public health
emergency – about the benefits of single-resident rooms for reducing infection transmission and
improving residents’ health outcomes, experience, and quality of life. Additional analysis is needed to
quantify the potential savings associated with these benefits, as well as to refine estimates of the initial
and ongoing costs of transitioning to single-resident rooms.

The evidence strongly suggests that converting from multi-resident to single-resident rooms in nursing
homes should be part of comprehensive reform along with other person-centered and evidence-based
practices. Key stakeholders including nursing home residents and family advocates, providers and staff,
owners and administrators, policymakers, and federal agencies that help finance nursing homes and
improve public health, need to discuss options for promoting, incentivizing, and financing the movement
toward a healthier and safer long-term care environment.

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

Appendix: Financial Analysis and Considerations for Transforming Long-

term Care with Single-Resident Rooms in Michigan, by Plante Moran
Acknowledging that economic considerations are an important factor in converting to single-resident
rooms in nursing homes, the funder of this report also commissioned Plante Moran to estimate new
costs and summarize other transition considerations. Plante Moran, headquartered in Michigan, is one
of the nation’s largest certified public accounting and business advisory firms, with significant expertise
in nursing home financial matters. The research and analysis presented in this appendix, based on 2019
data from two Michigan multi-facility long-term care organizations, was conducted by Betsy Rust and
Rob Long of Plante Moran in February 2021. Any questions about this analysis should be directed to its
authors.
Distribution of Beds by Room
Inventory of Michigan Skilled Nursing Facilities
Types in Michigan SNFs
Michigan has 430 licensed skilled nursing facilities (SNFs)
with a total bed capacity of 45,621. SNFs in Michigan 6% 3%
provide short-term rehabilitation and recovery services as
well as long-term custodial and chronic care. Ninety-five 25%
percent of facilities offer some single-resident rooms, but
66%
nine percent of available beds exist as three or four bed
wards. Fifty-five facilities reported having at least one
four-person room. See Table 1, Licensed Beds and Room
Single Double 3+ Ward 4+ Ward
Occupancy for details.

Table 1. Licensed Beds and Room Occupancy

Category Totals Single Room Double 3 Bed Ward 4 Bed Ward
Licensed Beds 45,621 11,603 30,172 2,925 1,228
Rooms 28,001 11,633 15,086 975 307
There is one licensure category for skilled nursing in Michigan, but there are two designations of SNFs
for reimbursement purposes. Class I facilities are freestanding. Class III facilities may be freestanding and
owned by a county government or may be physically attached to a hospital and considered a hospital
long-term care unit (HLTCU). Medicaid payment limits for the two classes are established separately by
aggregating cost and utilization data. Class I and Class III facilities also have different Medicaid
reimbursement mechanisms for capital costs. See Table 2, Bed Capacity, Occupancy, and Rate Limits by
SNF Class for details.

Table 2. Bed Capacity, Occupancy, and Rate Limits by SNF Class

Type of Estimated Estimated Estimated Bed Medicaid Average

Facility Occupancy – Occupancy percentage of Capacity Payment Limit Medicaid
2019 cost post- single-resident for Operating Payment for
report pandemic rooms Costs at Capital Costs
10/1/20 at 10/1/20
Class I 75% 70%* 24% 39,812 $223 $18
Class III 92% 85%* 38% 5,809 $330 $19
*Occupancy estimated based on actual census as of January 2021, and forecasted census derived from a survey of
Michigan SNF owners.

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

The Medicaid reimbursement methodologies for both Class I and Class III facilities are antiquated and
frequently do not cover a provider’s actual capital costs (depreciation, interest, property taxes, and
certain operating lease payments that are currently defined as capital). Under both methodologies,
providers are incentivized to utilize traditional mortgage or bond financing, as there is no
reimbursement consideration for cash or equity invested. Many owners obtain mortgage loans through
the Department of Housing and Urban Development (HUD). These loans offer attractive repayment
terms and affordable interest rates, but also limit an owner’s ability to secure other debt instruments for
renovations or improvements.

The Michigan reimbursement system does not recognize building rent paid to an unrelated third party
as an allowable expense. This prevents nursing home operators from partnering with real estate
investors that are seeking to deploy capital to invest in senior care assets and therefore suppresses
renovations and new construction.

Certificate of Need (CON)

The capacity of licensed SNFs in Michigan is regulated by the certificate of need (CON) program. Bed
need is determined on an individual county basis, with the exception of the State’s largest County,
Wayne, which is divided into three planning areas. As of January 4, 2021, the State of Michigan reported
a need for an additional 182 beds with significant variations in capacity versus demand noted in several
counties. Michigan’s methodology in determining bed need has been under increasing scrutiny and is
evolving to contemplate the growing number of alternative care settings available to individuals who
are eligible for nursing home care.

Because CON restricts the ability for new SNF locations or expansion of SNF services, bed licenses have
an intangible value to the owner. Currently, an owner has the option to redeploy bed licenses to a new
site but there are various applicable CON standards that would need modification in order to gain
widespread support and utilization of this option.

To transition SNFs from multi-resident to single-resident rooms, Michigan State officials must
adequately address the value of the bed licenses and establish a method to compensate owners for
surrendering beds . Similarly, the State will need to increase the flexibility of the CON program and
licensure related to bed redeployment.

Michigan Demographics and Nursing Home Alternatives

The aging of America will continue to increase the need for long-term care support and services, but
both the intensity and nature of that demand is changing, creating a unique opportunity to convert
existing SNFs from multi-resident to single-resident rooms.

Michigan is aging faster than the national average. Between 2020 and 2040, for example, the proportion
of people aged 65 and older in Michigan is expected to grow from 17.5 percent to 20.5 percent,
compared to 16.2 percent to 18.7 percent for the nation.

Michigan’s older population is projected to not only continue to grow, but also to get older. Already,
between 2010 and 2018, the proportion of Michigan’s population that is over 85 has grown by 10
percent (from 1.96 percent to 2.14 percent). By 2030, residents 85 and over are projected to make up
2.5 percent of the population, and by 2045 they will make up 3.88 percent of the state’s population.

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

These residents, sometimes referred to as the “oldest old,” require more care and supervision than their
“young old” counterparts and are the ones most likely to require skilled nursing services at some point.

These new consumers, however, have changing expectations of long-term care support. Many want to
remain in their own home as long as possible, and the use of services to support seniors and other
adults living at home or in small residential settings is growing rapidly. The enrollment in MI Choice,
Michigan’s Medicaid-funded waiver program to make home and community-based services available to
elderly and disabled populations, has grown from 10,876 in 2011 to 15,224 in November 2019. Adult
Home Help, Personal Care Services, the Program of All-Inclusive Care for the Elderly (PACE), and hospice,
all of which have the same goal of allowing seniors and other adults to live at home by providing various
types and levels of support, are also growing. The Michigan State budget commitment to these
programs increased by 28 percent from FY 2013 to FY 2018.

Those who do need the services and care of SNFs have changing expectations of those facilities, with
rising consumer demand for single residency rooms and smaller, more home-like settings.

The CON process outlined above is beginning to reflect the impact of alternatives to SNFs. The recent
update in the methodology used by CON to project nursing home bed need noted above reflects that
most areas of Michigan will not need new beds in the near future. This projection was made prior to the
COVID pandemic, which has resulted in even lower occupancy than this previous projection.

Increasing use of long-term care setting alternatives, changing expectations for more privacy, and CON
projections of little new bed need all create an opportunity to begin converting existing multi-room SNFs
to facilities with single-resident rooms. A portion of the cost savings generated from shifting
beneficiaries to lower cost alternatives could be used to fund the higher operating and capital costs
associated with single-resident rooms.

The Impact of Single-Resident Rooms on Operating and Capital Costs

To estimate the impact of a transition to single-resident rooms, Plante Moran compiled 2019 operating
and capital costs from two Michigan multi-facility organizations. These entities operate both facilities
that offer primarily semi-private rooms (sample size 43) as well as facilities that are at least 80 percent
single-resident rooms (sample size 18). The cost data was derived from as filed 2019 Michigan Medicaid
cost reports, without any adjustments.

Operating Costs
A transition to more single-resident rooms will increase the SNF operating cost per patient day. The
higher operating costs are a direct result of the following:

Higher nurse staffing and related payroll costs associated with increased time spent transitioning
between residents and traveling between resident rooms
Higher nursing administration costs per patient day due to spreading the fixed costs of a Director
of Nursing, Infection Control Coordinator, and other resources over fewer residents
Increased occupancy costs associated with more square footage per resident, including utilities,
housekeeping, and plant operation and maintenance

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

An increase in costs per patient day associated with covering other fixed costs over fewer
residents. These costs include the licensed Nursing Home Administrator, building and liability
insurance, and other administrative expenses.
The data indicated that the average increase in operating cost associated with offering primarily single-
resident rooms ranged from $16-$25 per patient day as shown in Table 3, Projected Operating Cost
Increase for Single-Resident Rooms.

Table 3. Projected Operating Cost Increase for Single-Resident Rooms

Operating Cost Average Cost Increase for Single-Resident
Rooms
Nursing and Nursing Administration $10 - $15
Occupancy $3 - $5
Other Operating $3 - $5
Total Increase in Operating Costs $16 - $25
There are many variables that would influence the actual increase in cost, including the size and layout
of the facility, resident acuity, age, quality of HVAC, and other considerations.

Capital Costs
A transition to single-resident rooms may be accomplished in various ways; new construction of facilities
with only private rooms; renovations to expand facility footprints to accommodate more single-resident
rooms; or downsizing total facility capacity. These options have significantly different out of pocket
capital investments associated with them, but all will increase the ongoing capital expense per patient
day that will need to be funded through increased payment rates from private and third-party payers.

Michigan’s capital reimbursement system is driven by a determination of building value, referred to as

current asset value or CAV, that is derived from historical asset costs adjusted for inflation and
obsolescence. The CAV has an impact on capital reimbursement and is currently limited to $93,000 per
bed. A transition to single-resident rooms in an existing facility under any of the options described
above, would increase the current asset value per bed, requiring a corresponding increase in the CAV
limit to ensure that providers receive adequate reimbursement for capital costs.

A transition to single-resident rooms will increase the capital asset cost per bed and will therefore
increase the capital costs per patient day with any capital reimbursement system. The impact of a
transition to single-resident rooms on the capital costs per diem will vary significantly depending on
whether the facility simply downsizes or makes a significant capital outlay. An organization’s approach
to financing capital investments also have an effect on the capital cost per patient day.

There was significant variability between the two organizations in the increased capital costs per patient
day associated with single-resident rooms. The median increase for one entity was $40 per patient day
and $20 for the other entity. As discussed, there are many factors that influence capital costs per day
and Plante Moran did not conduct additional analysis of construction cost, type of financing, or interest
rate.

Funding the Increased Cost of Single-Resident Rooms

A shift to single-resident rooms will increase both operating and capital costs. The net cash available for
debt service, capital replacement, and return on investment to SNF owners will also shrink if the beds

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

are not redeployed. These factors will reduce the incentive for ownership of SNFs without a
corresponding increase in the price received for rendering the services.

Based on filed Medicaid cost reports, more than two-thirds of Michigan residents living in SNFs are
covered by Medicaid. Michigan Medicaid paid for an estimated 9.18 million days of care in the State’s
fiscal year ending September 30, 2019.

Due to the high concentration of Medicaid beneficiaries in long term care facilities, the Medicaid
program would need to fund the increased capital and operating costs in order for providers to be able
to transition to single-resident rooms. As with most State Medicaid programs, a portion of the funding
would be subsidized through federal matching dollars.

Based on the information gained from analyzing the two organizations, Medicaid rates would need to
increase by an estimated average of $50 per patient day to accommodate operating cost increases that
range from $16-$25 per patient day and capital cost increases that range from $20 to $40 per patient
day. As noted previously, the actual cost increase for each individual facility will vary. Some facilities will
experience higher operating costs in excess of $25 per patient day, while other facilities may experience
lower capital costs per patient day with a downsizing that does not require capital outlay. Further
analysis is needed to fully understand the cost of a transition to single-resident rooms across the entire
inventory of Michigan facilities. See Table 4, Estimated Annual Funding Requirements for Single-
Resident Rooms from State and Federal Sources for details.

Table 4. Estimated Annual Funding Requirements for Single-Resident Rooms from State and Federal
Sources
Estimated Additional Funding
Payment Category Medicaid Days Needed at $50 per State of Michigan Federal Match
– 2019* patient day Funding (1/3) Funding (2/3)
Class I 7.05M $354M $104M $250M
Class III 1.4M $70M $23M $47M
MI Health Link SNF .73M $37M $12M $25M
Total 9.18M $461M $139M $322
*Based on 2019 MDHHS Variable Cost Limit runs and estimated MI Health Link days from 2019 filed cost reports

Transforming Long-term Care with Single-Resident Rooms: Example Transition Path and
Considerations
To accomplish the goal of providing more Michigan nursing home residents with single-resident rooms,
it will be essential to fully address concerns by stakeholders related to CON, financing, and overall
financial sustainability and profitability. Following illustrates two transition paths for an existing 124 bed
SNF to all or majority single-resident rooms.

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

124 Bed SNF

20 Single-Resident, 52 Semi-
Private

Path 2 - Allocate 80% of

Path 1 - All Single-Resident,
beds to Single-Resident
Maximum 72 Single
58 Single, 14 Semi-Private
52 Licenses Remain
38 Licenses Remain
There are numerous other alternatives to increase the number of single-resident rooms in this example
facility, with each option generating some remaining licenses. The remaining licenses could be utilized in
newly constructed beds at the existing facility or at a new location. Alternatively, the remaining licenses
could be held or “banked” by the owner for a specified period for future use or surrendered. See Table
5 for a list of key business and regulatory issues related to downsizing and resulting bed licenses that
would need to be addressed to facilitate a transition to single-resident rooms.

Table 5. Business and Regulatory Issues Associated with Bed License Options Resulting from Transition
to Single-Resident Rooms
Key Issue to Surrender Bed Bank Bed Utilize Beds at Utilize Beds at New
be Addressed Licenses Licenses Existing Location Location
Value of bed licenses X X

Timeline to utilize remaining X X X X

licenses
Restructure of existing X X X X
financing for reduced licenses
Cost of construction and X X
accessing related capital to
utilize remaining licenses
Reduction in profitability to X X X
owner associated with a
lower bed count
Medicaid funding of increased X X X X
capital and operating costs
per resident day

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 MARCH 2021 Fundamental Nursing Home Reform: Evidence on Single-Resident Rooms

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