Nursing Homes Abuse Blog - By Jonathan Rosenfeld

I was intrigued by a recent report in the Detroit Free Press by Robin Erb, "AARP: Michigan too quick to put elderly in nursing homes" which highlighted the problem faced by Michigan--- but, is frankly applicable everywhere--- the spiraling cost of providing nursing home care to an expanding elderly population.  

Citing statistics from AARP, Michigan spends more than than 35 states when it comes to providing Medicaide (state funding) funding for long-term care funding for seniors.  In lieu of the expensive services provided to seniors in the setting of a nursing home, the AARP report suggests that a more cost effective option would be to provide more home-based care to seniors by directing nurses aides and other professionals directly to seniors who are living in their own homes.  

According to the AARP paper, an estimated $57,338 per Medicaide participant could be saved each year by providing services directly to seniors via home care or similar programs int he community.

Interestingly, this report follows on the heels of a report on senior living arrangements commissioned by the Health Care Association of Michigan (a nursing home industry group) which drew upon data from federal nursing home surveys to suggest that nursing home care in the state was actually under-utilized--- as the cost savings suggested by many home care plans simply did not save as much money as alleged due to costs associated with additional hospitalizations that were not always taken into account when compiling expenses.

While I suspect that the issues that accompany nursing home funding will remain an issue for debate for the foreseeable future, these issues highlight the need for individuals and families to explore all of their options before committing to a type of care.  Hopefully, as the costs associated with senior care continue to escalate, families will recognize that there may be viable alternatives in a non-traditional setting that are better suited to their loved ones' needs.

Related Nurisng Homes Abuse Blog Entries:

Is The Push To Privatize A Chicagoland Nursing Home A Good Thing?

Long-Term Care Hospitals: More Profit, Less Staff

Not All Non-Profit Nursing Homes Operate Under With Patients Best Interest In Mind

Compared to non-profit and government controlled peers, big-chain nursing homes simply provide inferior patient care.  Period.

In one of the first studies directly comparing patient care provided by non-profits operations vs. nursing home conglomerates (the ten largest for-profit chains), an analysis conducted by University of California San Francisco (UCSF) clearly demonstrated that the facility have significantly more deficiencies that can be responsible for patients unmet medical needs and the development of serious complications such as: falls, infections, drastic weight loss and pressure sores.

According to one of the studies author's Charlene Harrington, RD, PhD, there is no ambiguity in the studies findings:

Poor quality of care in an endemic in many nursing homes, but we found that the most serious problems occur in the largest for-profit chains.

Inadequate staffing levels appears to be the major reason why patients at big chain nursing homes suffer more harm.  When comparing the number of nursing hours provided by registered nurses (RN's) and nurses assistants (CNA's), patients at larger nursing homes received approximately 30% less attention than patients receiving care in a non-profit or government controlled nursing home.

As the largest variable to control costs and boost profits, big chain operations trim staff to levels where patient needs are simply disregarded in favor of delivering profits to their shareholders.  My hope is that officials take note of studies such as this and begin to implement mandatory staffing levels which would inevitably translate to improved patient care.

Incidentally, the UCSF study looked at the care provided by the nations ten largest for-profit nursing home chains.  Collectively, the nursing home chains operate approximately 2,000 facilities and provide care for 13% of the nursing home population.  At the time of this study, the ten largest nursing home chains included: HCR Manor Care, Golden Living, Life Care Centers of America, Kindred Healthcare, Genesis Healthcare Corporation, Sun Health Care Group Inc., Sava Senior Care LLC, Extendicare Health Services Inc., National Healthcare Corporation and Skilled Healthcare LLC.

Related Nursing Homes Abuse Blog entries:

Under-Staffing At Nursing Homes: When There's Simply Not Enough Staff To Protect Patients From Harm

Majority Of Nurses Fear For The Safety Of Their Patients

Study Demonstrates Correlation Between Under-Staffing & Incidence Of Infections In Nursing Homes

New Program Focuses On Staffing To Improve Patient Care In Nursing Homes

A former administrator at a Kentucky nursing home has pleaded guilty to multiple charges including: theft, exploitation of a vulnerable adult and tax fraud.  

The nursing home administrator identified as James Tackett, confessed to stealing more than $300,000 from patients he was responsible for caring for at the Golden Years Rest Home (ironically a non-profit facility).

Authorities were tipped off to Mr. Tackett's activities after several patients at the facility complained about not receiving economic stimulus checks from the federal government. The complaint was then passed on to the Social Security Administration and Department of Revenue who quickly learned that Mr. Teckett took it upon himself to take his patient's funds.

This is not an isolated criminal venture for Mr. Tackett.  In 2009, he pleaded guilty to physically abusing a patient at Golden Years Rest Home.   A judge will determine the sentence for Mr. Tackett's crimes involving financial abuse of the elderly in February.

Commonly ignored and frequently perpetrated by close friends and family, financial abuse of the elderly can take many forms including:

• Taking money or property
• Forging an older person's signature
• Getting an older person to sign a deed, will, or power of attorney through deception, coercion, or undue influence
• Using the older person's property or possessions without permission
• Promising lifelong care in exchange for money or property and not following through on the promise
• Confidence crimes ("cons") are the use of deception to gain victims' confidence
• Scams are fraudulent or deceptive acts
• Fraud is the use of deception, trickery, false pretence, or dishonest acts or statements for financial gain
• Telemarketing scams. Perpetrators call victims and use deception, scare tactics, or exaggerated claims to get them to send money. They may also make charges against victims' credit cards without authorization

***above types of financial fraud highlights from the National Committee for the Prevention of Elder Abuse (NCPEA)

Related Nursing Homes Abuse Blog Entries:

Elder Abuse Lawsuit: Woman Accuses Nursing Home Of Unnecessary Drugging In Order To Take Over Social Security Payments

Medicaid Fraud Costs Nursing Home More Than $375k

Chicago CNA Charged With Stealing From Deceased Nursing Home Patient

Nursing Home Bookkeeper Admits To Stealing Money From Facility

HCR ManorCare, the nursing home behemoth that operates 338 nursing homes, assisted living, and other types of senior care facilities in 30 states has agreed to sell the properties to HCP Inc.  Under the terms of the $6.1 Billion deal, HCP will become owner of the facilities and lease the properties to HCR ManorCare who will continue to operate the facilities.

In 2007, Carlyle Group purchased HCR ManorCare for $6.3 billion and remains one of the largest corporations in the nursing home industry.

The deal remains one of the largest REIT deals conducted in the last few years.  The acquisition of the ManorCare properties will expand HCP's role in the senior housing market as it currently owns 250 facilities.

The rush to cash-in on nursing homes

The influx of corporate owners and operators has become a relatively recent phenomenon as various types of investors seek to capitalize on the aging population.  According to reports from Bloomberg, health care is the single largest U.S. based on gross domestic product.   Health-related costs are expected to continue to rise 5.1% over the next year.

Though I would never begrudge an individual or company from making a decent living, I fear the the influx of corporate nursing home owners and operators will continue to result in deteriorating care provided to patients in need as moguls evaluate new ways of deriving more income from facilities.

Related:

ManorCare Nursing Homes In Chicago: How Does Your Facility Compare?

Corporate Ownership Putting Profits Over People

What's In A Name? Are Large Nursing Home Chains Intentionally Attempting To Deceive The Public When It Comes To Corporate Ownership?

HCP and Carlyle's ManorCare in $6 billion asset deal December 14, 2010 Yahoo

I was disgusted when I recently saw this news clip regarding a nursing home patient that was literally dumped at an emergency room.  Patient dumping is an illegal practice, yet seems to be occurring more frequently lately.

No doubt, patient dumping is about nursing homes desire to increase their profits as opposed to providing quality patient care.  My hunch is that if we were to look at all of the patients who were dumped by nursing homes, we would see that most (if not all) are Medicaid recipients  as opposed to Medicare or private pay patients.

Related:

Get Out Of Here!

Many families of nursing home patients have been lead to believe that 'non-profit' facilities provide better care that their 'for profit' peers.  As we recently discussed, studies do generally confirm that non-profit facilities provide superior levels of care.

Nonetheless, if you ever need a reminder that every facility-- regardless of its tax status, must be evaluated on an individual basis, take a look at this article from the Palm Beach Post.

The Post article chronicles how Maxcine Darville, managed benefit herself and her family to the detriment of the patients at her facilities.

As the CEO of the Okeechobee Council on Aging, Darville managed to reel in an annual salary of $404,000-- more than two times the state and federal average for CEO pay at non-profit nursing homes.  Ms. Darville's company operates Glades Health Care Center and The Riverfront Nursing and Rehabilitation Center-- two nursing homes with a poor records for providing quality care to their patients.

Despite obvious safety violations at Darville's facilities, the Post's investigation clearly determined that she has little interest in investing money for facility improvements.  Among the Post's findings:

• Assistant CEO, Joanne 'Jody' Watson (Darville's daughter) was paid $200,000 plus $23,000 in expenses from two councils in 2007.  In 2008 she received $160,000 for her work.
• The director of maintenance, Gary Watson (Darville's son) was paid $118,000 in 2007.
• Darville spent more that $30,000 in personal expenses.  She receives $1,200 per month from her company to board an unnamed 'visiting executive' in her residence.
• The Okeechobee Council on Aging proudly lists a woman who has been deceased for more than two years.

Medicare's Rating:

Riverfront Nursing and Rehabilitation Center

Glades Health Care Center

Related:

Caring For The Elderly Pays... Especially If You Own The Nursing Home

Does Pulling Medicare Funding From Underperforming Nursing Homes Help Residents?

Nursing Home Rating System Reveals Inferior Care Provided At For-Profit Facilities

Ask me about sports, wine, politics or the law and I feel fairly confident I can at least have a lively conversation about any of them.  But please don't ask me about finance.  The past year has eroded any hint of confidence I had when it comes to companies for investment.

Wait a second. Maybe, I am onto something.  In looking over the recent financials of the following national nursing home companies it looks as though some of the companies mentioned below are holding up fairly well in the current economic climate. As quarterly earnings are reported by many large nursing home chains--- caring for the elderly apparently pays well-- sometimes very well.

Five Star Quality Care

Five Star Quality Care, Inc. (Ticker: FVE) first quarter 2009 results reveal revenues increased 14% to 295.2 million from $258.9 million from a year earlier. New income for the company was $25.4 million for the quarter compared with $1.6 million in the first quarter of 2008.

Five Star Quality Care owns and operates 210 senior living communities in 30 states.  The companies facilities include: independent living centers and skilled nursing communities (nursing homes).  Five Star also operates five institutional pharmacies and two rehabilitation hospitals.

Kindred Health Care

Kindred Healthcare's (ticker: KND) profits rose 55% in the first quarter to $22.8 million or 58 cents per share.  Despite the fact that Kindred provided care to fewer patients, it was able to exceed Wall Street expectations by managing labor costs. 

According to chief financial officer, Richard Lechleiter, the recession may have actually helped the company's bottom line.  The shortage of jobs in other industries may have actually encouraged current employees to remain at Kindred longer.  Turnover among the company's hospital employees fell to 21% from a 25% turnover rate from a year earlier.

Kindred Healthcare, Inc. is a healthcare services company that operates: hospitals, nursing centers and a contract rehabilitation services business across the United States.  The hospital division operates 82 long-term acute care ("LTAC") hospitals (6,482 licensed beds) in 24 states. The health services division operates 228 nursing centers (28,525 licensed beds) in 27 states.  Kindred also operates a contract rehabilitation services business which provides rehabilitative services primarily in long-term care settings.

Sunrise Senior Living

Sunrise Senior Living (ticker: SRZ) will report quarterly earning on May 8th.  Will earnings be in line with the other long-term care providers?  Obviously, I have no idea-- if I did would likely retire from the law.  However, Sunrise did recently announce an 'Overhead Downsizing Plan' to save the company more than $20 million annually by cutting employees--further adding to the companies profitability. 

"The decision to reduce the number of people at Sunrise is never easy, but it was essential given  today's economic environment and our need to further reduce spending.  We want to be completely clear that none of these changes will effect the extraordinary care and services we provide in our communities," said Mark Ordan, Sunrise's Chief Executive Officer. 

No need to worry about the work levels for employees?

Sunrise Senior Living, Inc. provides senior living services in the United States, Canada, the United Kingdom, and Germany. It offers independent living services, which include housing, meals, transportation, activities, and housekeeping, as well as licensed skilled nursing services for residents who require 24-hour skilled nursing care; and determination of the appropriate level of care and service for such resident. The company’s assisted living communities also offer a reminiscence neighborhood that provides specially designed accommodations, service, and care to support cognitively impaired residents, including residents with Alzheimer’s disease and other forms of memory loss. 

Next time a large nursing home chain claims that a jury award is too large considering the nature of the injury, take a look at the company's financials and see who is really the one benefiting.

Mark this post.  Look at this news story from New Jersey.  A year from now this will be a common theme amongst nursing homes and long-term care facilities throughout the country... we are seeing just the beginning of this trend to make nursing homes and long-term care facilities as profitable as possible in the face of slimming budgets and corporate ownership.

Its no secret that Medicare and private-pay residents are far more lucrative for facilities that Medicaid recipients.  As budgets for nursing homes and long-term care facilities begin to tighten and people live longer than ever, it only a matter of time before facilities evict those less lucrative residents. 

Now facilities can not order you out of the facility on a whim.  Strict removal protocols must be followed.  If you believe that the facility evicting you based on your economic situation, you should contact your state ombudsman immediately.

Resource: Nursing Home Injury Laws: New Jersey

In the middle of Elder Abuse Awareness Month in Illinois, Governor Blagojevich has indicated cuts are coming to community-based services for the elderly.  According to AARP Illinois, the Governor's decision to reduce the Fiscal Year 2009 Budget will eliminate or reduce services essential to health and safety of older Illinois residents.

The cuts to home based health care and community based services could force many elderly in Illinois to lose their independence and move into nursing homes.  Home care for elderly allows residents to remain in their own homes for longer.  Home based health care is also cost effective as the cost per resident is substantially less than nursing homes.

Read more about community based health care for Illinois residents here.

Taking Note, a financial blogging group, provides further evidence that big business is putting its desires for quick profits over the care of nursing home residents.  The nursing home population is exploding.  Big business is recognizing the opportunity to profit off this fact and is jumping in the nursing home industry.  There are no laws controlling ownership of nursing homes in the United States making transition of ownership from an experienced owner to a large corporation easy.

Maggie Mahar, the articles author, skillfully calculates that roughly 6% of the 2 trillion dollar United States annual health care budget is spent on nursing homes.  The percentage of the health care budget is likely to increase.  Citing a Genworth Financial survey, the average annual cost for a private room in a nursing home hit  $76,460, or $209 per day this year—a 17 percent increase over the $65,185 cost in 2004.

The Center for Disease Control notes that more than two-thirds of the nation’s nearly 16,000 nursing homes were in the hands of private investors. The new owners include prominent private equity firms like Warburg Pincus and the Carlyle Group. The remaining one-third were owned either by the government or by non-profit organizations.

Ms. Mahar cites to a New York Times story that examined more than 1,200 nursing homes purchased by large private investment groups since 2000—plus more than 14,000 other homes—reporters compared investor-owned homes against national averages in multiple categories.

As corporations enter the 'nursing home industry', there are indications that patient care is deteriorating. The New York Times article showed the ratio of RNs to nursing home residents was significantly higher at the investor-owned homes (20:1) than the national average (13:1), as was the share of long-term residents who suffered from health deficiencies, anxiety and depression, or  needed more help with daily activities such as simply moving around their rooms.  In the investor-owned homes, patients were deteriorating.

Failure to account for the cost of nursing facility care is the main cause of impoverishment among the elderly.  An American Health Care Association report recently reported that the average American man is expected to spend $56,895 in long-term care expenses.  The  average long term care cost for American women is $124,370.  Private health insurance generally does not cover extend stays at nursing facilities.  Therefore, even for people with means, an admission to a nursing home or skilled care facility means a rapid drain of personal funds.

Most residents at nursing homes are forced to rely on Medicaid because of a staggering drain on personal funds.  Unfortunately, people who rely exclusively on Medicaid have a limited number of facilities available to them.  Often, facilities which rely exclusively on Medicaid for funding are inferior to those who are predominately privately funded.

What is the consequence of all these financial problems with long term care for the elderly? I came across this article describing how the financial crisis trickles down to home how doctors and other medical professional make career choices.  Not surprisingly, the current  financial shortfalls involving nursing homes and long term care are discouraging many skilled medical professionals from treating the people who desperately need them.