In New York, a notable decline in nursing home capacity is underway, with the San Vicente de Paúl Nursing Home in the South Bronx having ceased admissions since December 2024. ArchCare, the operator of this facility, has reduced its capacity from 120 to 53 beds, with plans for further reductions. Similarly, another ArchCare facility on Staten Island has closed an entire floor, while the Ferncliff Nursing Home in Dutchess County has seen its available beds decrease from 309 to 196.
National Trends in Nursing Home Capacity
ArchCare’s eight nursing homes, which provide eldercare services through the Archdiocese of New York, have experienced a decline of 269 usable beds over the past 18 months, representing a nearly 12% decrease. This reduction has led to waiting lists for patients seeking long-term care. According to LeadingAge New York, which represents nonprofit senior living organizations, 24 nursing homes have closed in New York state since 2020, resulting in the loss of over 3,000 licensed beds. This trend is mirrored nationally, with the number of certified nursing facilities decreasing by more than 900 between 2015 and 2025.
As the oldest baby boomers reach the age of 80, a time when the need for long-term care increases significantly, researchers are expressing concerns about the adequacy of nursing home beds to meet the demands of a rapidly aging population. “We’re seeing a serious problem and it’s heading in the wrong direction,” said David Grabowski, a health policy researcher at Harvard Medical School and author of a study published in JAMA Internal Medicine that found a 5% decrease in national nursing home capacity from 2019 to 2024. “As you look at the demographics, this is only going to get worse, maybe a lot worse,” he added, citing the potential impact of Trump administration policies on immigration and Medicaid financing.
Financial Challenges and Staffing Shortages
ArchCare attributes the decline in nursing home capacity to inadequate state reimbursement for Medicaid, a common complaint in the industry. According to Clif Porter, chief executive of the American Health Care Association, Medicaid, the primary payer for nursing home care, provides less than the daily cost of care. Jason Hutchens, ArchCare’s chief operating officer, noted that while losses were sustainable before the pandemic and inflation, the facility was recently operating at an unsustainable loss, leaving no choice but to reduce capacity. Nursing homes often attempt to compensate for these losses by attracting short-stay patients covered by Medicare, which offers higher reimbursement rates than Medicaid.
Vincent Mor, a health services researcher at the Brown University School of Public Health and author of an article published in the New England Journal of Medicine, warned that “unless you’re extremely rapacious or extremely efficient, you’re not going to make it,” highlighting the financial challenges faced by nursing homes. Staff shortages, which have long plagued the industry, have also contributed to contractions and closures. Nursing home aides face stressful, low-paying jobs with high turnover rates, with a median hourly wage of $20.67 last year, according to federal data compiled by PHI, a research and advocacy group for direct care workers.
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Although pay has increased over the past decade, about 40% of nursing home aides rely on public assistance, such as Medicaid or the Supplemental Nutrition Assistance Program, PHI reported. The number of nursing home aides has rebounded from the covid pandemic, but fewer are working than in 2015. While hiring and retention have improved, Porter noted that “there’s still a significant gap between demand, especially future demand, and where the workforce currently is.”
National occupancy rates, which declined sharply during the pandemic, have returned to a typical 80%. However, this figure can be misleading, as it counts state-licensed beds rather than operating beds, which are actually available depending on a facility’s staffing and other factors. The American Health Care Association reported in 2024 that almost half of nursing homes were limiting admissions, and 57% had waiting lists for new residents.
Quality Concerns and Alternative Care Options
Sam Brooks, director of public policy for the National Consumer Voice for Quality Long-Term Care, suggested that nursing homes may close due to low demand, as people often avoid these facilities due to concerns about quality. Last year, Medicare inspectors found at least one quality violation in 27% of nursing homes, which can deter potential patients from entering facilities that are already struggling to stay open.
In recent decades, alternative care options have emerged, with about a million older adults currently living in assisted living facilities. The “rebalancing” policy shift has enabled more Medicaid recipients to receive services at home, where most prefer to remain. In 1988, only 10% of Medicaid expenditures for long-term services went to home- or community-based services, while the rest paid for institutional care. By 2020, more than 60% of expenditures funded home and community care, reflecting a change in how care is distributed.
Rural Challenges and Systemic Bottlenecks
The decline in nursing homes in rural areas was about 10% from 2015 to 2025, outpacing the national decline of about 6%. Rural areas face unique challenges, including difficulties in staffing nursing homes due to smaller labor pools and lower-paid jobs that require long-distance travel. Priya Chidambaram, a KFF senior policy manager, noted that these challenges can lead to bed shortages, creating bottlenecks at hospitals when patients cannot locate posthospital care locally.
