Waste, Fraud, and Abuse…
NPR had a fantastic article about the nursing home industry’s pleas for additional bailout money. We cannot continue to allow the waste, fraud, and abuse. Nursing homes were unprepared and overwhelmed by the coronavirus. Recent studies show that for-profit owners recklessly endangered residents by cutting corners while siphoning taxpayer money to owner/operators, related management companies, and “passive” investors.
Nursing home hotspots account for more than a 40% of all COVID-19 deaths nationwide. Incredibly, the industry now demands a bailout of billions in aid from the federal government. NPR’s article used a for-profit chain called Aperion Care as an example of the amoral business model. Staff the facility with the least and cheapest employees. But the short-staffing is an insurmountable obstacle.
Charlene Harrington is a professor emerita of Social Behavioral Sciences at the University of California, San Francisco. She is the leading expert in staffing issues in the nursing home industry. She reports that 70% of nursing homes are for-profit and low staffing is a common practice. Charlene Harrington contends that low ratings, especially for nurse staffing, are a direct result of the for-profit business model.
“They’re trying to make money,” she says. “And the main way to make money is to keep labor costs low. It’s a deliberate strategy as part of making money,” Harrington says. “And that means that they’re leaving their residents unprotected.”
The pandemic revealed this systemic practice causes abuse, neglect, and preventable deaths. Studies looking at thousands of nursing homes across the country have connected for-profit ownership and low nurse staffing to increased coronavirus infections.
Nursing homes have already received about $7.5 billion from federal coronavirus relief legislation and billions more in Paycheck Protection funds. Now the industry is asking for another $100 billion for all health care providers, with a “significant” amount of that going to nursing homes.
Mark Parkinson is president and CEO of the American Health Care Association. He represents and lobbies on behalf of for-profit facilities. Parkinson admits, “The system didn’t know how to react to it and unfortunately, mistakes were made.” He then blames “underfunding”. In fact, most nursing home revenue comes from the taxpayers, through Medicaid and Medicare. But the nursing home owners keep the operations lean and divert funds to related entities.
Owners pay themselves hundreds of thousands to millions of dollars in annual rents for each building. Cost reports and SEC disclosures show that the owners have stakes in companies that the nursing homes do business with: from consulting to insurance to therapy to laundry.
“The real wealth generally in this industry is created through real estate and not so much through the [nursing home] operations. You need the operations to generate increased value to your real estate and other assets of the business.”
Do they need or deserve another bailout? A new report from the Centers for Disease Control and Prevention (CDC) said masks not only protect the general public from COVID-19, but also protect the mask wearer. In its strongest endorsement to date about the effectiveness of masks, the CDC said “adopting universal masking policies can help avert future lockdowns, especially if combined with other non-pharmaceutical interventions such as social distancing, hand hygiene, and adequate ventilation.”