Predatory Economics 101: “A Place for Mom” Nursing Home Referral Scam


    Nursing home referral scam A Place for Mom is the topic of this second post in a series with the theme:  Predatory Economics (the other one calls out purveyors of the snake oil Prevagen, see last post August 11, 2020).  In this series we will be calling out businesses preying on the public – especially the elderly.  As a plutocracy has become more entrenched in the United States, predatory marketing and manipulation have become increasingly open and shameless. 

    Among other for-profit corporations that have been integrated into the assisted living and nursing home system, referral services now exist to guide prospective tenants and patients to assisted living and skilled nursing facilities.  We do not really need these services, the Center for Medicaid & Medicare Services rates nursing homes based on regular state inspections.[1]

    A Place for Mom, is the biggest and best known of these so-called services.  No doubt, many readers of this post remember Joan Lunden’s soothing assurances about how this service intends to be a guide to the best place for mom (her conscience must have bothered her, she’s gone).  The truth is that mom will be referred to whichever facility is willing to pay for the referral.

   It is important to note this:  A Place for Mom is owned mostly by predatory, private equity firms Warburg-Pincus.  There is no evidence that I’ve ever seen which suggests that this outfit is in the nursing home business for any other reason than to extract value for investors at the expense of care.

  A Place for Mom advertises itself as a “free service,” but the ads don’t tell the whole story. Indeed, mawkish, maudlin, phony-baloney television ads featuring Ms. Lunden and others would lead viewers to believe that the company is not even a company but rather just a free service that does nice things for moms (and dads or anyone else supposedly).

    Because a Place for Mom is a for-profit company, its revenue must come from somewhere.  In fact, nursing home and assisted living operations using the service pay a fee for referrals equivalent to one month of their monthly charge. This information is not present on the company’s website homepage. [2] However, it raises profound ethical issues that must be explored in some depth.

    Empirical evidence suggests that a Place for Mom revenue is driven more by the facilities willing to pay than by an objective evaluation of quality of care in those facilities.  For instance, exactly which skilled nursing facilities with which the company has a referral agreement in the Kansas City area is difficult to discern from its website.[3]  However, I did find Indian Creek Health Center of Overland Park listed as a Place for Mom’s referral. The CMS website on which the five-star rating for each facility can be found indicates a 1 – the lowest rating – for Indian Creek. 

  I called the company’s 1-800 number to see if they would disclose which facilities were customers. However, the salesperson was brand new and knew nothing about the nursing homes in the area. I could sense that her job was to capture me as a customer.  It was clear that if I didn’t tell them exactly for whom I wanted to find a facility I would not receive any information.

    These services exemplify the irrational nature of deregulated government funded systems. Neoliberals, conservative Democrats and Republicans, and libertarians promote the mistaken notion that government is inept and private businesses can provide services much more efficiently and effectively.  Contrary to the belief in the advantages of the free market over government in health care these privatized services tend to be opaque, predatory, and manipulate unsuspecting citizens into care that is far more costly than if it were provided by the government.

    It is important to consider the ethical concerns raised by operations like a Place for Mom:

  • Individuals are lured into these services under the guise that quality of care is the main consideration in guiding customers to assisted living and nursing home facilities.

  • Funds that could be dedicated to care are siphoned off into an unnecessary for-profit entity. 

  • Evaluation of the service by social scientists is not possible due to a veil of secrecy.

[1] If you want to find out about a nursing home, go to this site and enter the city of the nursing home you are interested in and the name of the nursing home:  The facility to which A Place for Mom refers your mother/dad/friend/child/relative will pay for that referral.  This is money that comes out of care.  The people in the company’s boiler room operation will not have near as much information about the place as what you will find on the CMS website.



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