“Reliable Income Streams”
The Des Moines Register had a great article on the new GAO Report mentioned in my earlier post. Private investment firms have been buying up nursing homes in recent years, creating a complicated trail that makes ownership difficult to pinpoint. This lack of transparency makes it difficult to know who is ultimately responsible for care in a home.
Making that happen is a matter of properly putting in place the new health reform law. The law includes more comprehensive reporting requirements for homes. While implementing those, federal officials should ensure it’s clear to the public who owns the homes.
What should really get lawmakers’ attention is the other story in this report: The nursing home business is apparently so profitable that firms seeking to make money for investors are snatching them up.
According to the GAO, investment companies bought more than 1,800 nursing homes around the country between 1998 and 2008. Ten large firms made 89 percent of the purchases. Some firms bought up entire chains. Some only wanted the real estate, and said they had no involvement in daily operations.
Among the reasons homes are such an attractive investment: They provide “reliable income streams,” according to the GAO.
What? Nursing homes are moneymakers?
It defies the widespread notion that homes are locally owned, mom-and-pop operations struggling on shoestring budgets. In fact, two-thirds of homes in this country are for-profit businesses. They generally pay low wages to the workers providing care.
Meanwhile, industry officials complain incessantly to state legislatures that they need higher reimbursements for Medicaid patients. They say they lose money because the government doesn’t pay enough for poor residents.
They must not be losing much money if profit-seeking firms consider the homes good investments. And the reason is because the bulk of their revenue comes from Medicare and Medicaid. These government programs are the most dependable payers in the country.
And, apparently, the government is paying enough money to make homes good investment bets.
Yes, changes must be made so average Americans and government regulators can know who owns a nursing home.
But there’s something wrong when homes pay low wages to direct care workers, demand more money from the government and are considered lucrative ventures by private investment firms.