False Narrative

Fake News

TallGrass Economic Finance & Politics reported on the false narrative about the claim of financial hardship in the nursing home industry. It is a great article that is right on point. As a nursing home lawyer suing negligent nursing homes for over 25 years, I am well aware that the industry is extremely profitable. The author Dave Kingsley explains:

Here is a message to the media: high net worth individuals and their financial managers do not invest in long-term care because it is a poor investment.  Furthermore, corporations will not continue in a line of business that is a losing proposition for their shareholders. 

Kingsley calls it the “nursing home industry hardship narrative.” It is often spread by industry lobbyists and industry association groups. However, no empirical evidence or any credible research supports this typical industry “hardship narrative.”

Tallgrass uses an example from the Kansas City StarStar journalist Sydney Hoover said this:

“Nursing homes in Kansas have long struggled financially, with many unable to pay competitive wages, or even basic utility bills.”

The article went on to say that the “pandemic has exacerbated those difficulties, as the cost of personal protective equipment increases and staff shortages grow.” (“Kansas nursing home officials push for staffing aid – and calling out National Guard.”  See https://www.kansascity.com/news/coronavirus/article248477490.html).

Profitable Industry

However, public companies file quarterly and annual financial reports with the Securities & Exchange Commission showing exorbitant profits. The largest long-term care chain owners are real estate investment trusts.  Welltower is the dominant REIT long-term care corporation in revenue (Over $5 billion in 2019).  It’s 2020 proxy report indicates that CEO compensation was $17 million in 2019.  Board member compensation ranged from $250,000 to $350,000.

The 10-Q reports for these publicly listed long-term care corporations also indicate that they have been receiving a considerable amount of COVID relief from the federal government through the CARES Act. These for-profit corporations are highly subsidized corporations.

The Ensign Group is one of the largest long-term care corporations in America.  It made record profits in 2020. The chain’s 2020 revenue increased quarter over quarter.  Like other public corporations, the Ensign Group has robust earnings, paid dividends, and has impressive cash reserves. These chains have $billions in cash without much debt.  The stock value of Welltower, Ventas, Ensign Group shares are at prior highs.

“Our detailed analyses of long-term care provider finances will be uploaded to a new website. The New Economics & Politics of Aging at http://neweconomicsofaging.org/.  If we do not begin to push back on industry propaganda, the future of long-term care looks bleak for patients and families.”