The nursing home system is predatory. It is designed for optimum extraction and exploitation without reinvestment for innovation and improvement in the quality of care.  Although federal and state regulators promote a veneer of protection for patients and the public, their primary mission is maintenance of government support for massive real estate and financial services industries.

    Here are some recent examples of how the system of profit and nonprofit corporations, elected official and regulators is designed to protect providers at the expense of patients, the public, and communities in which they operate:

The power of money in politics

    The New York Times reported on August 16, 2020[1] that large nursing home chains are hiring high powered lobbyists to scrounge around Washington and push for favors such as tax breaks, immunity, and cash infusions through COVID relief bills.  Genesis, the biggest operator of nursing homes is on the brink of bankruptcy due to mismanagement and sees the COVID crisis as a path to rescue – it has hired two former top White House aids to lobby on its behalf. 

    Life Care Centers, the third largest owner and operator of skilled nursing facilities has hired former top-level congressional staffers to lobby on its behalf.  This company – owned solely by billionaire Forrest Preston – has a record of not just poor care but horrible care.[2]

    Aside from nursing homes corporations hiring their own lobbyists, they are represented by two powerful trade associations: the American Hospital Association and the American Health Care Association. OpenSecrets.org indicates that the AHA disburses about $100 million per year for political campaigns, lobbying, and maintaining a lobbying army in Washington and the 50 states.[3]  These appear to be a productive expenditure.  According to the NYT article:

The industry has received about $7.6 billion in federal grants through the federal economic stimulus package, according to the American Health Care Association, an industry group, and will soon get another $5 billion. Nursing homes have also received an estimated $11 billion more in government loans and advance Medicare payments, according to an analysis of federal data by Good Jobs First, a progressive research group. Executives at Genesis, which has reported 1,500 deaths at its homes nationwide, told investors last week that the company had received nearly $190 million in federal grants and was looking for more.

The Industry is well protected, but patients and employees are neglected by regulators

    Regulators, whether they be CMS, state agencies such as the Kansas Department of Aging & Disability Services, or local health departments have circled their wagons around the industry and provide it with a veil of secrecy.  I began calling agencies and checking on websites for information about cases of COVID and deaths. 

    Nothing on websites. Using the ruse of finding a nursing home for a friend, I inquired about information regarding COVID cases and deaths in the facilities in the area.  Generally, I was referred to other agencies such as – believe it or not – an Area Agency on Agency, which has nothing to do with COVID or regulating nursing homes.

    Eventually, I was directed to public health departments such as the Kansas City, Missouri health department.  Amazingly, one public health director told me he did have that information but wouldn’t share it with the public.  One epidemiologist told me that her agency had the information but wouldn’t give me the phone number of the person I would need to talk to because that person was just too busy to talk to me.

    Seventy or one hundred thousand (who knows?) nursing home patients and workers who have died from COVID is an unnecessary, preventable tragedy of major proportions.  But due to deregulation and capture of government agencies and their employees, the tragedy continues.  The Wall Street Journal reported that 26 states are not bothering to even test inspectors entering skilled nursing facilities.[4]

In the final analysis:  A protective shield and largess for the industry.

    Government agencies and legislatures are enmeshed with the skilled nursing business in exploitation of private pay patients, workers, and taxpayers. Behind a veneer of state and federal regulatory activity is a mutually protective relationship between government and providers.

    The claim of a competitive market in which competition will improve service is mythical.  Prices are controlled – advantageously for the industry – through reimbursement rates while wages are allowed to float in an imaginary “labor market.” Huge amounts of largesse is funneled to the industry through tax expenditures, price controls, supplemental payments, and bailouts.

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[1] https://www.nytimes.com/2020/08/16/business/nursing-home-safety-trump.html?searchResultPosition=1

[2] Having checked Nursing Home Compare ratings for Life Care Centers, I was struck by its extraordinary number of low ratings in Kansas and Missouri.  Also, I have noticed that this company appears frequently on the CMS “special focus facilities” list.  Its Wichita facility has been on the SFF list throughout the pandemic.  This means that the facility is so poorly operated that CMS won’t even rate it at the lowest level of 1.  Preston was caught because of whistleblower employees for overbilling Medicare for rehabilitation services.  He settled by returning $140 million to Medicare.  Who knows how much he got away with?

[3] https://www.opensecrets.org/orgs/summary?id=D000000116

[4] Anna Wilde Mathews, “Many Nursing-Home Inspectors Aren’t Tested,” Wall Street Journal, Saturday/Sunday, August 15-16, 2020, p. A3.