ArchCare, the nonprofit that operates eight nursing homes across New York through the Archdiocese of New York, has reduced usable capacity by nearly 12% over the past 18 months, eliminating 269 beds and leaving some facilities shuttered entirely.
The San Vicente de Paúl Nursing Home in the South Bronx has not admitted a patient since December 2024. ArchCare cut its capacity from 120 beds to 53 and plans to reduce it further. A separate ArchCare facility on Staten Island has closed an entire floor, while Ferncliff Nursing Home in Dutchess County contracted from 309 beds to 196.
These closures reflect a broader statewide trend. Since 2020, 24 nursing homes in New York have closed, wiping out more than 3,000 licensed beds, according to LeadingAge New York. Nationally, the number of certified nursing facilities fell by over 900 between 2015 and 2024, dropping from 15,648 to fewer than 14,700, according to the Centers for Medicare and Medicaid Services.
With the oldest baby boomers turning 80 this year, researchers warn that demand for long-term care is climbing just as supply shrinks. David Grabowski, a health policy researcher at Harvard Medical School, co-authored a study in JAMA Internal Medicine documenting a 5% national decline in nursing home capacity from 2019 to 2024. “We’re seeing a serious problem and it’s heading in the wrong direction,” he said.
ArchCare attributes the cuts to inadequate Medicaid reimbursement. Medicaid, the primary payer for nursing home care, covers less than the daily cost of care, according to Clif Porter, CEO of the American Health Care Association. Jason Hutchens, ArchCare’s chief operating officer, said losses were sustainable before the pandemic but became unsustainable as inflation rose. “We were running at an unsustainable loss — we had no choice,” Hutchens said.
To offset low Medicaid rates, many nursing homes pursue higher-paying short-stay patients covered by Medicare. But when those revenues fall short, “unless you’re extremely rapacious or extremely efficient, you’re not going to make it,” said Vincent Mor, a health services researcher at Brown University School of Public Health.
Staffing Gaps and Systemic Strain
Staffing shortages have compounded financial pressures. Nursing home aides earn a median hourly wage of $20.67, and roughly 40% rely on public assistance such as Medicaid or SNAP, according to data compiled by PHI, a research and advocacy group for direct care workers. While employment has rebounded since the pandemic, fewer aides are working than in 2015.
Almost half of nursing homes were limiting admissions in 2024, and 57% reported waiting lists for new residents, according to the American Health Care Association. National occupancy rates have returned to around 80%, but that figure includes all state-licensed beds — many of which are not actively staffed or available.
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Hospital systems are feeling the ripple effects. Grabowski’s research found that where nursing home capacity declined, hospital stays lengthened because patients could not be placed in post-acute care. “It gums up the entire system,” he said.
Immigration policies under the Trump administration may worsen the crisis. Revocations of legal status for certain immigrant groups have already strained staffing in states like Florida, New York, and Massachusetts.
Aides Face Low Pay and High Turnover Amid Staffing Crisis
Nursing home aides continue to contend with decades-long staffing shortages that have driven facility closures and contractions. Their median hourly wage last year was $20.67, according to federal data compiled by PHI, a research and advocacy group for direct care workers. Despite wage increases over the past decade, about 40% rely on public assistance such as Medicaid or SNAP.
Although the number of nursing home aides has rebounded from the covid pandemic, fewer are working than in 2015, PHI reported. Hiring and retention have improved, but Clif Porter of the American Health Care Association noted a significant gap between current workforce levels and future demand.
In recent decades, alternatives emerged that diverted patients from nursing homes. About a million older adults currently live in assisted living facilities. And among Medicaid recipients, the ongoing policy shift called “rebalancing” has enabled more people to receive services at home (where most want to be) rather than in nursing homes. In 1988, only 10% of Medicaid expenditures for long-term services went to home- or community-based services; the rest paid for institutional care. By 2020, more than 60% of expenditures funded home and community care, said Priya Chidambaram, a KFF senior policy manager specializing in Medicaid, citing a staff analysis.
Quality Concerns and Shifting Preferences
“Nursing homes close because people don’t want to go to nursing homes,” said Sam Brooks, director of public policy for the National Consumer Voice for Quality Long-Term Care, an advocacy group. “The quality is so low that people avoid them like the plague.”
Medicaid spending reflects this transition. In 1988, only 10% of long-term services funding supported home- or community-based care. By 2020, that share exceeded 60%, according to Priya Chidambaram of KFF.
Rural Challenges and Policy Uncertainty
“It’s more difficult to staff a rural nursing home,” Chidambaram said. “Labor pools are smaller, and it’s hard to get people to take lower-paid or part-time jobs if they have to travel long distances.”
