November 2024
By Kelly Asche, Senior Researcher
Our new report, “The declining capacity of nursing facilities care in rural Minnesota,” documents the shrinking number of nursing facility beds across rural Minnesota. In the report we raise concerns about the vulnerability of rural facilities and the frequency at which they close. In this post, I want to dive a bit deeper into the bed capacity of those facilities that close and how closely they resemble our most rural facilities that are currently open.
Bed capacity of facility before closure
Since 2005, 92 facilities have either closed or stopped offering nursing beds in Minnesota. The result is 15% fewer facilities statewide in 2024 compared to 2005. However, those closures have not been equal across the state. Our most rural counties in Minnesota have lost 25% of their nursing facilities since 2005, while our most urban counties have seen only 9% of their facilities close.
A common theme we heard in interviews we conducted for this report with nursing facility operators was the challenge of creating sustainable economies of scale for small, rural facilities. With the high overhead costs and, according to operators, low reimbursement rates, it’s very challenging to make the finances work.
Figure 1 shows how the smallest nursing facilities are more prone to closing. The y-axis indicates numbers of beds, or the capacity, of the nursing facilities being charted, represented by the dots. The column on the left shows all the facilities that have closed and their licensed bed capacity the year they closed. On the right side are all the facilities that are currently open, along with their licensed bed capacity in 2024. The facilities that have closed have significantly smaller bed capacity: the average (mean) bed capacity among facilities that closed is 59, considerably less than the average capacity of facilities still open, 72.
Figure 1: The facilities that have closed since 2005 had lower bed capacity than the ones that have remained open. Data – Care Providers of Minnesota – MN Department of Health, Licensed Nursing Facilities
A concern we raised in the report is that the statistical characteristics (mean, median, 25th percentile, etc.) of the facilities that closed look more like the characteristics of rural facilities than metro-based facilities.
Figure 2 provides the same information as Figure 1 but broken out now by rural-urban county groups. Examining the statistics, we can see that their capacities more closely match facilities located in entirely rural and town/rural mix county groups than in the more urban county groups. For example, the 25th percentile of bed capacity for facilities that have closed is 33, which is closer to the values of entirely rural and town/rural mix counties—40 and 42 respectively. The same with averages, medians, and the 75th percentile.
Figure 2: The bed capacity of facilities that have closed more closely match those facilities currently located in more rural areas of Minneasota.
Another way to determine if the bed capacities of closed facilities are more similar or different compared to bed capacities for open facilities by county group is to use a statistical tool called a “t-test.” A t-test measures the similarities between the distribution of two pools of values. In this case, the two distributions we are comparing are the bed capacity of closed facilities against the bed capacities of open facilities for each RUCA county group. In simple terms, it measures whether the two pools come from the same population. The results tend to be in the form of a probability value (p-value). If the resulting p-value is more than .05 then we can say that the distributions are very similar, whereas if it’s less than .05 then we can confirm that the distributions are statistically different from each other.
When we run each of the county groups with the facilities that have closed through this method, we get the following results;
Table 1: This table provides the Wilcoxon rank sum test of distributions’ p-values. This test shows that the more rural a county group is, the more similar their distribution of bed capacity is to facilities that have closed. Data: MN Care Providers Association; MN Department of Health Nursing Facilities Licensure
Long story short, there is evidence, both anecdotally and quantitatively, that smaller facilities tend to close at a higher rate and that the bed capacity of those facilities currently match those that serve our more rural areas of the state, indicating that rural areas could be vulnerable for more closings in the future.