Unintended effect of stricter regulation

Echoing concerns expressed by the nursing home industry, KFF Health News published a piece on how a change in Montana's staffing requirements caused some low-intensity addiction treatment facilities to close. For context, the article reports that "The new rules the state added at the same time brought the residential facilities up to American Society of Addiction Medicine standards." Yet, four out of fourteen facilities in the state have closed since 2022, when the changes took effect. Apparently, the state was hoping that moving to the higher Medicaid reimbursement rates would be adequate funding.

It seems like a difficult policy decision. As the article points out, various competing groups -- likely many for good causes -- are vying for additional funding. The legislators try to make the budget stretch. At the same time, people expect a certain level of quality from various service providers, and expect the state to enforce at least some of those standards, particularly among healthcare providers. Yet, people were probably hoping that the various facilities would improve without becoming unsustainable. In retrospect, it is probably not surprising that when higher quality is mandated, the funding must come from somewhere, whether that be owners' profits or from those who pay, or some combination.