SIOUX FALLS, S.D. (KELO) — Bryan Breitling’s first job out of college was a nursing home administrator more than 30 years ago. 

Now the healthcare administrator and Republican state Senator from Miller says the industry continues to take care of people in need but funding has become more of a challenge alongside more national regulations that have raised costs. 

“Residents are a vulnerable population,” Breitling said. “As a result, we need to have some additional security and make sure that we’re taking care of the residents the best way we can. The net effect is who is going to pay for it.” 

Those growing challenges and declining rural populations have resulted in more nursing home facilities closing doors. This week, the Good Samaritan Society announced closings in Clear Lake and Lennox, while Avantara will be closing a facility in Ipswich. Breitling added he believes the Avantara Salem facility likely won’t be rebuilt after suffering major damage from last week’s derecho storm. Residents in Salem have been relocated to other area Avantara facilities. 

“I think we’re gonna continue to see a few more closures just because not all these facilities are full and not all these facilities are able to staff,” Breitling said. “It’s a struggle in that industry right now.”  

Breitling said travel costs for staff has been a major expense hurting rural nursing homes. According to its career website, the Good Samaritan Society has more than 250 job openings in South Dakota. Other nursing home facilities that have closed cited staffing issues as part of the problem. 

“If you don’t have a good labor market in town and you have to go the traveling market route, it’s virtually impossible to survive,” Breitling said. 

Breitling said private pay is the most lucrative for nursing homes and added long-term care insurance hasn’t kept up with the length some residents stay in long-term care. 

“Historically, long-term care was based on stability. Stable staff, stable residents and good occupancy,” Breitling said. “That’s not always the case anymore, because of the different payer mixes and the type of residents you have based on your demographics in your community.” 

Breitling, who serves on the Appropriations Committee and is licensed as a long-term care administrator, said nursing homes were appreciative of an extra $20 million bump in one-time funding provided by the state in the most recent budget passed in the 2022 session. That funding was only one-time funding and after July that bump will go away while a 6% raise for teachers and state employees will start. Breitling said that may mean nursing homes will need to increase staff pay as well. 

“The economy is changing and we simply need to add a little bit more pay to a lot of different areas,” Breitling said. “We have to figure out a way that we can add some more revenue in the state so we can support these providers.”

He also wondered if the business model would change for nursing homes to expand from 40-bed facilities to 60-bed facilities. 

“What are the efficiencies that can be made to make that industry a little bit more sustainable and viable long term,” Breitling said. 

Since 1988, South Dakota has had a moratorium on building a new nursing home without state approval. It caps the number of beds per facility and statewide. Breitling said that’s led to rural nursing homes giving up licensed beds to more urban places like Sioux Falls, Rapid City and Aberdeen which typically have more full nursing homes. 

“To help some of the disparities, the state put out RFPs (request for proposals) to add more beds in Sioux Falls and Rapid City,” Breitling said. “The last time they did that, there were no takers. The market is just a challenge right now between all the regulations and everything it takes to run a nursing home.” 

Medicaid expansion, which is set for the November ballot, would have little impact on nursing homes, Breitling said. He said Medicaid expansion would mostly expand health insurance access for people with lower income levels. 

“Medicaid already covers elderly, low income elderly, disabled women and children,” Breitling said. “Medicaid expansion doesn’t change that market. It just creates additional access for low-income folks that are not elderly.”