Monthly Archives: June 2021

Executive Compensation for CEO’S of Major Nursing Home Chains did not Decline Significantly During 2020: For Most, it Increased by a Significant Amount

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    The nursing home lobby operating in Washington and state capitals is continuing its long running financial hardship campaign.  An article in the latest issue of Provider (the main propaganda organ for the industry) claims that COVID presented such a serious financial blow to providers that enhanced financial assistance from government would be the only way to implement needed substantive reform. The reform needed, according to the article, is due to increasing demand in long term care services (Patrick Connole, “COVID Challenges Bring Opportunity for Systemic Changes,” June 2020, 9-10).

    The article states that “With the majority of nursing homes already operating on razor-thin margins, the cost of making improvement will not be possible without financial assistance.”  Perhaps the razor thin margins to which the author is referring apply to the LLC listed as the owner and not to all the other LLCs such as the property LLC, the management LLC, the rehab LLC, the medical transport LLC, etc.  Certainly, holding companies and REITs have not fared badly at all during 2020 and the height of the COVID pandemic.[i]

    One would think that the entities at the top of the financial food chain would have taken a major hit and pared back their CEO pay considerably if the razor thin margins at some point in the flow of capital diminished shareholder value.  However, as the table below suggests, CEO pay for major nursing home operator/real estate chains listed on a public exchange were either enhanced by a large amount over 2019 and 2018 or remained steady.

    The above table does not display the proportion of total pay that is due to an “incentive bonus.”  Nevertheless, in cases where a major increase year over year appears for an executive, a large amount is for performance, which one must assume is financial performance.  The loss of life throughout the companies overseen by the executives in the table was a historical first for institutionalized U.S. populations.  An estimated 132,000 to 140,000 people in the care of these CEOs unnecessarily lost their lives.

    The government funded companies headed by CEOs at issue in this blog post are increasingly powerful players in taxpayer subsidized long-term and skilled nursing. In blog posts ahead, I will be discussing the growth of their power and influence.  For instance, the ManorCare property sold off by the private equity firm The Carlyle Group is now owned by Welltower and operated through a Welltower-Pro-Medica joint venture.

In the future, I will be blogging about the convoluted ownership structures in the nursing home industry and the complexification of that facet of the business due to the creativity of corporate lawyers and financial experts. Without exposing the financial trickery employed by providers, the public will be victimized by falsehoods of lobbying groups such as the AHCA/NCAL and others.

NOTE: The data in this post were derived from proxy statements filed with the Securities & Exchange Commission. In the future, I will be discussing compensation for board members and other officers/executives of major LTC/SKn corporations.

[i] Kingsley DE, Harrington C. COVID-19 had little financial impact on publicly traded nursing home companies. J Am Geriatr Soc. 2021;1–4. https://doi. org/10.1111/jgs.1728

The “Care For Our Seniors Act” is a Ruse Used by the Nursing Home Industry to Up Reimbursements

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LeadingAge & the AHCA/NCAL are Engaging in Harmful Propaganda:  They Need to Stop It!

Lobbyists for the nursing home industry, LeadingAge and AHCA/NCAL are promoting what they call “Care for Our Seniors Act,” which sets forth some laudable reforms they would like to see implemented along with an increase in funding (see:  https://leadingage.org/care-our-seniors-act).  I’m all for increasing Medicaid funding.  I’m all for some of the reforms they are pushing such as enhanced infection control preventionists, 24 hour registered nurses on staff, minimal personal protective equipment – all of which should have been in place before COVID. These are reforms that providers could have and should have provided and should now provide without more taxpayer funding that will be dedicated to increasing yield for investors.

Medicaid funding increases proposed by LA & AHCA/NCAL are all designed to increase reimbursement, e.g., “Enhanced Federal Medical Assistance Percentages (EFMAP).”  One of their ruses to get advocates on board is the proposal for a shift to private rooms by developing “a national study producing data on conversion costs and a recommended approach to make this shift.”  The study may happen, but the shift won’t unless the taxpayers are willing to pay for it – even though investors are extracting enough excess cash now to pay for these changes and still earn a respectable return on their investments.

The most despicable aspects of this proposal are the falsehoods used by LA and AHCA/NCAL for political framing.  For instance, their propaganda in the link cited above totally exonerates the industry and blames staff and government – not the real owners, i.e., investors, for lack of pandemic preparedness.  They fail to mention the generous COVID related federal and state subsidies provided to the industry, which were funneled into stock dividends and executive compensation.  This statement appeared in the latest issue of Provider, the industry’s trade publication: “With the majority of nursing homes already operating on a razor-thin margins, the cost of making improvements will not be possible without financial assistance.”

The nursing home industry and their lobbyist propagandists are treating advocates, activists, scholars, legislators, and the public in general with extraordinary disrespect. That needs to stop! If the industry is not willing to provide evidence to support their “razor thin margins” nonsense and stop treating us all like imbeciles, then their proposals should receive absolute zero credibility and no support from any of us.

A Pandemic Hit Us in 2020 & Killed at Least 600,000 Americans: After a Century of Pandemic Experience, Our Government Was Derelict

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By Max Skidmore*

Prior to the COVID-19 virus landing on U.S. shores, scholars in government policy, infectious disease, and epidemiology were warning policymakers about the inevitability of novel viruses that would put the health of Americans at grave risk. They were ignored. The following is an excerpt from an article I published in the Journal of Risk, Hazards, and Crisis in Public Policy 3:4 (December 2012) entitled “Anti-Government is Not the Solution to Our Problems; Anti-Government Is the Problem: Presidential Response to Earthquakes, Pandemics, and Violent Weather From San Francisco to Katrina.”

Presidents & Pandemic Policies In Our Past, & Future

Pandemics potentially form a greater threat even than storms and earthquakes.  They are nature’s rough equivalent of the neutron bomb that once was touted as a device that kills people, yet leaves the infrastructure relatively intact.  In 1918, an influenza pandemic killed some 675,000 Americans, more than died in World War Two, or even in the Civil War.  The wartime conditions ensured that men would be packed into crowded camps where disease would spread rapidly, while Democratic President Woodrow Wilson made matters far worse. His example demonstrates that it is insufficient for a president to be able and inclined toward activism. He must also give full priority to a crisis when it arises. Wilson rejected medical advice—even as the war was winding down—and continued to send troops abroad in crowded ships that ensured infection and became floating morgues.[1]

The Asian flu of 1957 was a far less lethal disease than the 1918 influenza, but it nonetheless led to some 80,000 flu-related deaths that year.[2] This is in contrast to a normal annual rate often reported to be about 36,000.[3] More recent estimates report a range, from around 3,000 to around 49,000, depending upon the type of influenza prevalent in a given season.[4] Regardless of which figures provide greater accuracy, they all demonstrate that even in a normal year influenza is hardly a benign disease. Nevertheless, in 1957—as a pandemic was known to be developing—Republican President Dwight Eisenhower rejected medical advice, concluding that the free market would be sufficient to provide safety for the population.  He considered a government-sponsored vaccine program to be unnecessary.[5]

Eisenhower’s reliance upon the “profit-driven marketplace” would have fit neatly into the post-Reagan ideology of American conservatives, and the results were the same for Ike that they later were for his successors, most notably George W. Bush. For Bush, as is well known, the move toward privatization of Medicare in the “Advantage” plans, instead of saving money led to greatly increased expenditures. For Eisenhower, the inherent inefficiencies of the market approach that he adopted caused a huge and unnecessary loss of life.  Those inefficiencies of the vaccine market included inadequate production, poor distribution, and a diversion of vaccine toward corporate employees to reduce sick days, and thus away from high-risk groups.[6]

Republican President Gerald Ford, in contrast to the passive Eisenhower and certainly to the militantly contrary Wilson, was quick to act when facing the threat of a pandemic.  He decided upon a massive immunization program in 1976 when a new influenza virus was discovered that seemed similar to the one that caused the 1918 catastrophe.  As a result of Ford’s speedy action, his National Influenza Immunization Program (NIIP) succeeded in immunizing some 50 million Americans in short order.  Because no pandemic developed, and because a few cases of Guillain-Barré syndrome arose among those vaccinated, the administration abruptly halted the program.  Ironically, it was the government’s sophisticated monitoring system that identified the incidence of GBS, which otherwise would never have been noticed.  It was not faulty vaccine, and the cause of GBS was (and remains) unknown, but those vaccinated did have a sevenfold chance of developing GBS as compared with the unvaccinated.[7]

The overwhelming reaction of the media and the public was that the NIIP was a fiasco.  Despite the negative perception, however, Ford’s program demonstrated that it is possible for government to act effectively; with the proper skill and will, it can move rapidly to counter influenza and other pandemics.  It is feasible for a public program to vaccinate massive numbers, even in the face of great obstacles.  If the pandemic had developed, even more people—far more—would have received the vaccine, and Ford would have been a national hero.  As it was, his critics—the media, Democrats in the successor Carter administration, and especially the Reagan Republicans—distorted the record and made him look foolish.  Of perhaps the greatest long-term consequence with effects still prominent today, the Republican conservatives, aided by compliant news media, portrayed government as impotent, if not actually pernicious.

Distance, though, should add perspective—even if that perspective has yet to develop. According to the World Health Organization, the world in late 2009 fell into the grip of another pandemic caused by an H1N1 flu virus (the 1918 flu was also an H1N1). Richard Wenzel, a specialist in infectious diseases at Virginia Commonwealth University, wrote in an op-ed in the New York Times that, although “the epidemic never became as deadly as we initially feared, it was not as mild as some experts now believe. What’s more, it exposed some serious shortcomings in the world’s public health response.” He pointed out that no virus should be considered mild that “was so devastating for young adults, along with pregnant women, obese patients and minorities,” and said that of 94 poor countries, only 26 had thus far received any H1N1 vaccine. He praised the actions of the Mexican government, but said that in the U.S., there were “huge infection-control problems.” Among these, “at times, health officials erred in their recommendations,” saying that children and adults could safely return to school or work after fever had disappeared, even though they remained infectious. Moreover—and this is a key point—here, “the virus struck at a time when Americans seemed particularly skeptical about our government and large institutions.”[8] The Reagan legacy, if anything, had intensified.

Fortunately, the recent virus was considerably less lethal than its 1918 predecessor, did not appear to have mutated toward greater lethality, and—if the predictions of experts are accurate—is unlikely to result in another great wave of infection. If indications at this writing (April 2012) are borne out, humanity escaped an enormous tragedy. In any event, the lessons of President Ford’s NIIP, both positive and negative, are there to provide instruction to future policymakers.  They should serve as a guide to a society that someday will certainly face another horrendous pandemic, perhaps avian influenza, that could well be even worse than the 1918 pandemic. To his credit, in this regard former President George W. Bush did take action. In December of 2005, Congress granted his request for “3.8 billion to develop new vaccines and stockpile anti-flu medications.”[9]

[1] See John M. Barry, The Great Influenza (New York: Penguin Books, 2005); see also Carol R. Byerly, 2005. Fever of War: The Influenza Epidemic in the U.S. Army during World War I (New York: New York University Press, 2005), 108.

[2] Mike Davis, The Monster at Our Door: The Global Threat of Avian Flu (New York: Henry Holt, 2006), 35-36.

[3] Centers for Disease Control and Prevention, “CDC Finds Annual Flu Deaths Higher Than Previously Estimated,” Press Release (7 January 2003), 3.

[4] Centers for Disease Control and Prevention, “Estimating Seasonal Influenza-Associated Deaths in the United States: CDC Study Confirms Variability of Flu,” http://www.cdc.gov/flu/about/disease/us_flu-related_deaths.htm; retrieved 23 April 2012.

[5] Davis, Monster at Our Door, 35-36.

[6] J. Donald Millar and June Osborne, “Precursors of the Scientific Decision-Making Process Leading to the 1976 National Immunization Campaign,” Influenza in America: 1918-1976, June Osborne, ed. (New York: Prodist, 1977), 19-22.

[7] See Arthur Silverstein, Pure Politics an Impure Science (Baltimore: Johns Hopkins University Press, 1981).

[8] Richard P. Wenzel, “What We learned From H1N1’s First Year,” op-ed, The New York Times (13 April 2010), Opinion page.

[9] Sarah Glazer, “Avian Flu Threat: Are we Prepared for the Next Pandemic?” CQ Researcher 16 (13 January 2006), 1.

*University of Missouri Curator’s Distinguished Professor (Emeritus)