THE COST OF CARING

A new study shows that getting older can carry a hefty price tag in Las Vegas.

Genworth Financial, a Virginia money-management company, found in its latest Cost of Care Survey that local consumers cough up more money for higher-than-average costs for nursing-home care.

What's more, those expenses are rising faster here than elsewhere, the study shows.

A year inside a private nursing home in Las Vegas costs $77,787, a 23 percent increase since 2004, and nearly $25,000 a year more than the city's median household income of $53,000.

The national average grew 17 percent from 2004 to 2008, reaching $76,460.

The soaring cost of elder care is putting fresh pressure on the sandwich generation, the group of baby boomers and Generation Xers who must stretch their budgets to cover their own retirements, their children's college educations and their parents' health care. And that cash crunch could mean less money for discretionary spending, said Beth Ludden, senior vice president of Genworth Financial's long-term care insurance division.

Treating rising costs requires diagnosing what's propelling the price of elder care.

Experts blame the cost spikes mostly on a shortage of labor, which health care analyst Robert Mains called "the single-biggest line item" in a nursing home's budget.

Staffs at nursing homes center on health care workers such as nurses, physical therapists and occupational therapists. And employees in those specialties are scarce, so their wage growth outpaces inflation, said Mains, a research analyst with New York investment brokerage Morgan Keegan.

Las Vegas lacks nurses more than most other areas, and that's amplifying cost gains for care in Southern Nevada, Mains said.

"Las Vegas has traditionally had shortages of everything, even nurse aides," he said. That boosts salaries, as health care providers augment wages to attract staffers. Consumers ultimately cover those paychecks through higher prices.

The U.S. Department of Health and Human Services ranks Nevada No. 49 in the nation for its number of nurses. The Silver State has 604 nurses for every 100,000 residents, compared with a national average of 825 nurses for every 100,000 people.

The results of the labor gap ripple through cost structures at all nursing homes, said Joe Ann Cole, administrator of Manor Health Care Center in Summerlin.

Where fewer nurses practice, overtime prevails, and those additional hours command time-and-a-half pay, Cole said.

Plus, nursing homes with staff shortages often rely on employment agencies or industry registries to supplement work forces, and that means shelling out placement fees on top of salaries. A registered nurse who makes $30 an hour might cost $40 to $50 an hour after agency charges, Cole said.

The upward push on compensation happens at all levels inside a facility: It's tough to retain even housekeeping staff in a market loaded with well-paying resort jobs, Cole said.

Labor expenses aren't the sole pricing magnifier, experts say.

Real estate costs also affect nursing-home prices. A softening housing market has eased the local real estate pricing spikes of 2004 and 2005, but Las Vegas remains a relatively high-cost market for buying land and leasing buildings, Ludden said.

Rising food prices show up in higher fees as well, Mains said.

Nursing homes also reap less income from wealthier patients, who have discovered "how to look poor" by transferring assets to their children, Mains said. Patients without visible assets can qualify for government care, so there's less out-of-pocket private pay for nursing homes now. In addition, competing forms of elder care, such as assisted living and in-home aides, help seniors avoid nursing homes longer, which means the patients who check in today are older, sicker and in need of more services, Mains said.

Analysts and industry members cited numerous reforms that could ease the cost crunch for nursing homes.

The industry needs 200,000 new workers a year to accommodate care for the nation's 78 million baby boomers as they age, Ludden said.

Recruiting won't be easy, because educational leaders in some therapy specialties intentionally cap graduation numbers so supplies stay low and salaries stay high, Mains said.

But Congress could help with legislation addressing improved working environments, higher wages and richer benefits for caregivers, Ludden said. Representatives also could write laws giving tax credits to family members who provide in-home care and thus ease the burden on nursing homes, she suggested. Improved technologies could help families keep parents and grandparents at home longer, too.

Tapping nurses from overseas could ease some labor needs, Mains said.

Cole said she would like to see U.S. universities graduate more nurses, but she noted that schools must first contend with faculty shortages and high tuition costs.

Finally, Ludden urged consumers to consider buying long-term care insurance to buffer their families against elder-care costs, which could grow faster than inflation for years to come.

Mains, who doesn't sell insurance, agreed that long-term care plans could not only spare consumers' pocketbooks, but they also could stabilize nursing-home costs in the long run.

Long-term care insurers are more reliable payers than federal programs, and they're unlikely to run out of money, Mains said. The resulting income security could help nursing homes control price growth.

"Nursing homes would love to get higher rates out of Medicaid, but that's not a realistic expectation," Mains said. "With long-term care insurance, they would realize better long-term pay."

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.