Cost-cutting Measures at Nursing Homes Leave Residents Suffering while Investors Profit:
Shielded by a complex corporate structure, investment companies can dodge accountability for lapses in care at private nursing homes.
There is a correlation between the poor—and sometimes dangerously poor—quality of care in privately-owned nursing homes and the cost-saving decisions made by private owners. But the many degrees of separation between the private investors who own the homes and the residents who feel the impact of their actions allow private investment companies to take profits without having to take responsibility.
Currently, about 70 percent of American nursing homes are owned by for-profit companies. Over the past several years, as the aging of baby boomers served to increase the demand for long term care, private investment companies jumped to acquire both large and small nursing home chains, moving quickly to reduce costs and boost profits, and frequently to resell facilities for significant gains. While these firms celebrate what they feel is a financial turnaround of a failing industry, the homes themselves are suffering from the very measures that make them profitable.
Studies reveal that homes acquired by large private investment companies on average fare worse than they had under their former ownership. Private nursing homes have scored worse than the national rates for preventable injuries such as bedsores, when, prior to private ownership, these homes matched national averages or even scored higher.
In particular, staffing cuts, made by nursing home managers under private investor ownership, have had a significant impact on the decline in quality of care in private homes. Staffing deficiencies—sometimes dropping to levels well beneath the minimum legal requirements—have been found by federal and state regulators to coincide not only with deficiencies in care (such as giving out the wrong medications or serving rotten food) but with incidents of resident death from injuries or accidental suffocation.
Cost-cutting measures at nursing homes cause failures in care which result in regulators levying fines and residents’ families seeking legal action. But the difficulty with privately-owned homes is reaching who is ultimately responsible. While publicly owned nursing homes must disclose who is in control of their facilities, privately-owned nursing home chains mask who’s in control behind convoluted corporate structures. For example, a company that has purchased a chain of homes might lease all or some of them to another firm, which in turn could use several different corporations to manage these homes. Still other companies might be used to hire staff, do bookkeeping, and acquire supplies, so that responsibility across the chain of homes is difficult to discern.
Even when regulators discover and report deficiencies in these homes, this information is not easily accessible by those looking to weed out lower-quality homes when searching for a safe facility for an elderly loved one. According to a recent investigation by the New York Times, homes often manipulate data regarding staffing, inspection results, and quality of care in order to receive a high star rating from the U.S. Centers for Medicare & Medicaid Services. The higher the star rating for a nursing home, the higher its profitability. But in terms of safety and quality, a home’s star rating may not mean much.
Fighting for the Rights of Your Loved One
It’s important to ensure that the Philadelphia/PA or NJ nursing home where your loved one lives avoids any poor care that results in nursing home neglect or abuse. Pennsylvania and New Jersey nursing homes are required to meet health and safety standards requirements and to ensure the physical, mental, and psycho/social well-being of their residents. Should you have concerns about the quality of care in a Pennsylvania or New Jersey nursing home, or if you suspect neglect, abuse, or fraud has occurred at the Pennsylvania, Philadelphia, or New Jersey nursing home where your loved one lives, please contact nursing home abuse attorney Brian P. Murphy to discover your legal rights and options.
