Senators Want to Give the Senior Housing Industry More COVID Relief Money. Fight It! It’s A Rip Off for Investors and Executives!

Senators’ Letter Is Not About the Quality of Senior Living:  It is About the Power of Finance, Insurance, & Real Estate

The senior housing industry lobby has convinced 20 U.S. Senators to sign onto a letter to HHS Secretary Becerra asking him to direct more of the $23 billion left from the CARES Act into corporations that, in my opinion, haven’t demonstrated a need for more financial assistance.  According to trade publication McKnight’s Senior Living, two powerful lobbying organizations, American Seniors Housing Association (ASHA) and Argentum have been pressuring legislators to persuade the HHS Secretary to direct more government largesse into corporations such as Ventas, Welltower, and Sunrise – all of which have already benefited nicely from a plethora COVID-19 relief programs (Bipartisan group of 25 senators supports additional COVID aid for senior living – News – McKnight’s Senior Living (mcknightsseniorliving.com).

Advocates and activists should do everything possible to stop any immediate injection of more federal dollars into an industry that has provided no empirical evidence that it has suffered financially because of the COVID-19 pandemic. Nor has the senior housing industry demonstrated that much of federal and state dollars channeled into senior housing corporations significantly improved care, wages, and working conditions.

The power of the lobby pushing for more government relief is immense.  The special interests pressuring senators and house members comprise a juggernaut of finance, insurance, and real estate – otherwise known as FIRE or Wall Street.  A massive river of money flows into campaigns and lobbying resources from real estate investment trusts, private equity firms, health care corporations, institutional investors, and other special interest groups acting on behalf of shareholders and executives.

Senior Housing Corporations Are Horizontally Integrated

According to the McKnight’s article, senior housing trade groups are claiming that all COVID assistance has been totally devoted to the skilled nursing (“nursing home”) segment of the industry.  That is false for a couple of reasons: (1) senior housing is dominated by large real estate investment trusts owning and operating the gamut of living/care spaces such as continuing care retirement communities (CCRCs), assisted living, and skilled nursing, and (2) Although the “nursing home” segment of the industry received a wider range of relief funds than most other types of corporations, direct grants and tax deferrals were available to all companies in senior living. 

Companies such as Sunrise Senior Living, Brookdale Senior Living, Sabra, Omega, Welltower, and Ventas are intertwined in a massive real estate industry with the objective of protecting and enhancing shareholder value.  My ongoing review of financial reports of publicly listed corporations involved in senior housing indicates that COVID did not present the same crisis for it that other industries incurred. Revenue, earnings, cash flow, and liquidity in general was in good shape for every public corporation with a wide array of senior housing services.

More detail pertaining to the finances of senior housing corporations will be provided on this blog in the days ahead.  As I locate and organize publicly available financial data of REITs and their operators, it is becoming increasingly clear that the senior housing industry is manipulating public opinion by providing misleading information about the impact of COVID on their financial performance.  The American Health Care/National Assisted Living Association (AHCA/NCAL), ASHA, Argentum, and other special interest groups in real estate and finance have been playing the public and legislators by claiming hardship while hiding the truth about how well they did in 2020.

If COVID Was So Financially Harmful to Senior Housing Corporations, Why Have Executives Been So Well Rewarded?

Former Welltower CEO Thomas DeRosa left the company last October with a 2020 compensation package of $14,589,584 (https://www.execpay.org/news/welltower-inc-2020-compensation-519).  Shankh Mitra, his replacement, received a total compensation package of $9,557,434. DeRosa’s 2019 compensation totaled $13,142,124; Mitra’s totaled $5,728, 143 in 2019 – quite nice increases for a company needing federal assistance (https://www.sec.gov/Archives/edgar/data/766704/000119312521118460/d49250ddef14a.htm).

Four of the five Welltower board members were paid from $300,000 to $352,000 (the lowest paid BOD member made $275,000).  In its 2020 10-K report, Welltower stated that its primary objective is to “protect and enhance shareholder value.”  Compensation packages for the board and officers indicate that the primary objective of the corporation was achieved in 2020, so why is more government assistance needed?

As proxy statements are released by major corporations in senior housing, it is becoming clear that CEOs were generously rewarded by their boards in 2020.  For instance, Ventas CEO Debra Cafaro’s compensation increased from $11,348,335 in 2019 to $12,628,714.  Ventas Executive VP and CFO’s compensation package took an amazing jump from $4,833,831 in 2019 to $13,116,202 in 2020! In the next few days, I will be highlighting the generous compensation packages received by CEOs that failed to protect hundreds of thousands of citizens in their care.  Executive compensation packages I’ve seen so far suggest that “incentive pay” is a sham concocted between executives and their boards.

Advocates & Activists:  Please Head Off Another Senior Housing Money Grab.

Any senior housing advocacy and/or activist group worth it’s salt should be all over this Wall Street money grab – aided and abetted by U.S. Senators.  Here is a list of the 20 Senators who have signed onto the letter (initiated by Senators Collins and Sinema):  Senators signing the letter in addition to Sinema and Collins include Michael Bennet (D-CO), Marsha Blackburn (R-TN), Tom Carper (D-DE), Bill Cassidy (R-LA), Chris Coons (D-DE), John Cornyn (R-TX), Kevin Cramer (R-ND), Steve Daines (R-MT), Dianne Feinstein (D-CA), Deb Fischer (R-NE), Bill Hagerty (R-TN), Mark Kelly (D-AZ), James Lankford (R-OK), Roger Marshall (R-KS), Jerry Moran (R-KS), Alex Padilla (D-CA), Tim Scott (R-SC), Tina Smith (D-MN), Jon Tester (D-MT), Thom Tillis (R-NC), Chris Van Hollen (D-MD), Todd Young (R-IN) and Amy Klobuchar (D-MN).

ASHA and Argentum are encouraging support of a similar letter in the House written by Reps. Abigail Spanberger (D-VA) and Anthony Gonzalez (R-OH). That letter is expected to close by week’s end.

My suggestion is that advocates and activists across the country come together and draft a letter to the HHS Secretary in which they insist that the finances of the senior housing industry be reviewed before any further COVID relief funding is made available to corporations providing assisted living, independent living, and skilled nursing.  Many of these companies are closely held and will not disclose their consolidated income, balance sheet, and cash flow statements.  Until they are willing to do that, the public should rebel against large injections of public funds into the senior housing industry.

Also, it is important to contact the senators on the above list and let them know that their support of more taxpayer funds that will most certainly reward investors and executives will prove embarrassing. As an increasing amount of 2020 financial data is discovered, organized, and reported, it is becoming clear that the American people are being played by an industry receiving undeserved subsidies. This is not about capitalism or the legitimate role of government.  Rather, it is about a corrupt political process and senior housing system that we ignore at our peril.

U.S. Elders are a Massive Market for Government Funded Corporations, but They do not Have a Strong Lobby for Protection from Exploitation

One-fifth of the U.S. Population is 65+

    The so-called “baby boom” which ranged from 1946 to 1964 was a phenomenal spurt in the U.S. birthrate.  In 1950, the U.S. population had reached 150.7 million, eight percent of which was 65+.  By 2029, when individuals born in 1964 will reach age 65, the U.S. population is estimated to be 350 million. Twenty-one percent or 73.5 million Americans will be 65+ by the end of the current decade.

    The two most expensive needs of the 65+ demographic are health care and housing.  As the elderly population has expanded, the Wall Street sector of the economy (finance, insurance, & real estate) and the health care sector have developed into 40% of the U.S. economic system.  Furthermore, the two sectors are intertwined and together account for $10 trillion of the $24 trillion U.S. economy. A major share of FIRE and Healthcare revenue is channeled through government funded programs.

A Free Lunch – Not a Free Market – for the FIRE/Medical Industrial Complex

    Because of the power of the FIRE/Healthcare lobby in Washington, D.C. and the 50 state capitols, these industries have the power to maneuver legislation in a manner that places the interests of the elderly far below the interests of investors and corporate executives.  Indeed, in long-term care, a major segment of senior housing, government and corporations have merged into a “corporatocracy.”  Prices are set and revenue is guaranteed, protected, and enhanced by government.  Competition is restricted through a licensing system.

    Although a patina of regulation is in place, conditions are debilitating and life-shortening due to cost-cutting for the sake of cash flow.  Although price controls exist, wages are allowed to float on a market in which labor is exceedingly weak and hourly pay is pathetically low.  Hence, low paid labor and understaffed facilities are bound to provide substandard care while the system is geared to enhance shareholder value through tax subsidies, ancillary services, triple-net leases, and patient arbitrage, i.e., upping the number of Medicare patients in relation to Medicaid patients.

    The senior housing system is designed to transfer middle class wealth to the very top income stratum.  For instance, any assets accumulated by ordinary American families needing long-term care can be quickly exhausted by daily charges.  These assets flow through complicated legal structures that provide generous tax benefits. 

    After the “spend down” on long-term care and a family’s assets are exhausted, welfare medicine (Medicaid) is the only option.  Government reimbursement for Medicaid is substantially lower than it is for private pay and Medicare and often the care is worse.  Nevertheless, $180 or $200 for a bed is better than an empty bed returning $0.  The industry always has its lobbying juggernaut in action making hardship pleas to legislators.  Lobbyists claim that reimbursement is too low and are constantly lobbying for increased Medicaid and Medicare rates. However, nursing home corporations are for the most part privately held and operate behind a veil of financial secrecy. Legislators and government agencies have done absolutely nothing about that anti-democratic practice.

The Power Relationship Between Advocates and the Industry is Asymmetrical.

    Industry lobbying groups such as the American Health Care Association are aggressive and well-funded.  They have a strategy and a narrative with plenty of money to carry them out.  The AHCA plays fast and loose with the truth. 

    It appears that most organizations claiming to represent the elderly are not willing to confront industry propaganda and fight with the same ardor as industry. Unfortunately, the AARP often steps in to play that role, but will often excuse, ignore, or explain away the industry’s egregious violation of human dignity and unfair treatment.  AARP representatives provide testimony at legislative hearings that is ill-informed, lacks substance, and avoids critical issues such as the opaque nature of the finances of corporations receiving Medicare and Medicaid dollars.

Lydia Nunez is Joining Us as A Blogger on Disability Issues

Lydia Nunez is a Knowledgeable & Experienced Colleague Who Has Joined Us to Provide Her Perspective on Assisted Living, Long-term Care, & Issues Pertaining to Americans with Disabilities. We’re Delighted to Have Her on the Tallgrass Economics team. Lydia’s bio is on the “Meet the Bloggers” page. Today her testimony to the Senate Finance Committee is posted.

Moving on from The COVID-19 Tragedy: Dangers Ahead for Disabled Americans

Medically Vulnerable Americans Should Have Been Protected from COVID: They Weren’t

During the 1918 flu pandemic, younger, healthier adults were the most likely people to die from the scourge sweeping across the world. During the COVID-19 pandemic the weakened immune systems of the frail elderly and other age groups with illnesses impacting immunity were the most likely to die from the disease.

Unlike 1918, by 2020 a major industry based on institutionalization of disabled individuals – most of whom are elderly – had developed. The euphemism for these institutions is “nursing homes,” but they are medical facilities designed for the care and treatment of individuals who need long-term skilled nursing care. The long-term care business is highly financialized and extractive. The primary objective of corporations providing skilled nursing is to protect and enhance shareholder value. Therefore, suppression of labor and other costs takes precedence over the quality of care provided to patients.

No real preparation for preventing the scourge from sweeping through long-term care facilities was undertaken by providers nor by the federal and state agencies responsible for regulating the industry. By virtue of the how these so called nursing homes are designed and managed, patients in them were more vulnerable than they would have been in their own homes. It is not surprising that approximately 30 to 40 percent of the 560,000 deaths from COVID in the U.S. have been patients in long-term care. Steps could have been taken to prevent what is no doubt one of the two largest mass mortalities of institutionalized individuals in U.S. history – the other being U.S. military troops during the 1918 flu pandemic.

As the COVID Pandemic Recedes Due to Vaccine, There is Little Interest in Accountability

The tragedy of mass mortality in long-term care institutions along with lack of interest in a major investigation into why it happened and who is responsible for it are directly related to the value placed on the lives of disabled Americans. Elderly people in general are among groups of U.S. citizens considered of little value to the economic system and to society in general. The same can be said about younger people with disabilities.

Therefore, institutionalizing people seen as noncontributing members of society places them in grave danger. This is especially the case when they are “out of sight and out of mind.” Corporations are paid plenty to provide them with an optimum quality of life, but through financialized management in a system they dominate they are able to extract cash from debilitating and life shortening care. That they have been able to carry on that business with impunity and cause the death of hundreds of thousands of people in their care should cause grave concern for the future well-being of disabled Americans.

Because the lives of elders and people with disabilities are devalued, there is no moral hazard to executives who neglect patients for the sake of cash flow. They will see no reason to seek innovation in care that would provide a healthier life for people in their care. Indeed, they will discover ever more innovative ways to enhance and protect shareholder value. Unfortunately, this will happen through collaboration with agencies of government.

The COVID-Tragedy from the Perspective of A Leader in the Disability Community

Lydia Nunez Landry,

Certified Long-Term Care Ombudsman

disabled disability advocate

Submitted for the United States Committee on Finance record at a hearing on:
A National Tragedy: COVID-19 in the Nation’s Nursing Homes

Wednesday, March 17, 2021

Chairman Wyden, Ranking Member Crapo, and distinguished Members of the Committee,



My name is Lydia Nunez Landry and I am writing to you today not as someone the American Health Care Association and LeadingAge would reduce to the characterization (in their ‘Care for Our Senior’s Act’) of a “frail [or] elderly adult with underlying health conditions” at risk of dying from COVID “630 times higher than an 18 to 29” year old, that is, someone these lobbyists designate as prone to death. Rather, despite reductions of people like me—or any other marginalized group—to underlying health conditions or comorbidities or biased stereotypes, I write to you today as an alive and thriving disabled woman, one who lives in and contributes to her community, and as someone who questions the motives of those who attribute grave injustice toexploited or oppressed people’s own supposed deficiencies. Without a supportive partner to care for me in our home, I could as easily have died from neglect or COVID-19 in the average nursing home. My point here is to show that the long-term care industry is peddling this narrative simply to avoid responsibility for wrongdoing; that is, they want to pretend that people are dying in their facilities not because of the industry’s negligence, greed, or malfeasance, but instead because disabled and older people have a particular tendency to die en masse. The narrative in ‘Care for Our Senior’s Act’ is yet another example of the industry’s connivery and manipulation (I will append a brief example at the end of my testimony to show how they advance this narrative by playing with statistics).

    Generally speaking, when any group of people are marked as suspect or inferior in some manner, when they are segregated and denied the resources and liberties that others enjoy, their flourishing will indeed be impeded, and they will be at a greater risk of contracting infections or disease. This is evidenced throughout history from the decaying and dank tenement houses of the early 19th century, the horrific conditions of the Warsaw ghetto, to the abuses that occurred in state institutions for people with disabilities. Given a deadly pandemic combined with deplorable (or at best unsafe) conditions, where people are segregated and treated as fungible objects from which to extract government benefits (or cheap labor), even AHCA and LeadingAge lobbyists like Mr. Mark Parkinson or Mr. David Gifford might be at a mortality risk 630 times higher than 18 to 29 year olds not forced to endure similar circumstances. (The industry’s claims are rarely supported by evidence, and with brief examination, can be shown inaccurate. Their act is at best slipshod and indicates an arrogance reinforced by years of overindulgence and a lack of accountability.)

    In contrast to those who are key players on K Street or spend most of their time in boardrooms or lobbying in the halls of Congress, I want to emphasize that my perspective is informed by my advocacy work in nursing homes where I have spent a great deal of time. I form bonds with residents. I know many of their spouses and children’s names, where they were from, the hobbies they enjoyed, and the kind of work they did. All of this they generously shared with me. I learned what it was like working in a Pennsylvania textile mill in the 1930s, surviving a chemical plant explosion in Texas and the revolution in Cuba, and growing up in Mexico in the 1940s. I have heard stories from war brides from France and Vietnam or the time a woman had to sew thousands of sequins by hand on her daughter’s quinceanera dress. I feel myself privileged to be granted the opportunity to listen. And unlike CEOs who earn $1,427,192 for lobbying, state ombudsman programs rely on volunteers. I have dedicated my life to this issue and yet rare is the occasion that I am asked to contribute to this topic. I—and other disability justice activists—have not been lavished the same platforms to speak given to long-term care industry CEOs and lobbyists. As a result of this, the voices of significantly disabled people, those at imminent risk of institutionalization or those in institutions, are squelched by the industry narrative. When I initially started out as ombudsman, I applied the principle of charity to the industry’s narrative, but with careful appraisal of the incongruity between what residents, families, ombudsmen, advocates, experts, HHS regulators, CNAs, CMS, and the OIG evidenced compared to the industry’s slant, it became apparent that industry representatives either have a deficient understanding of the culture and operations their business practices engender, or worse, they are impervious to the suffering of disabled people. Choosing not to see injustice or corruption, however, seems contrary to their lofty mission statements and commitments they have made to taxpayers.

On occasion, circumstances force us to confront the ugliness and brutality that inevitably festers where we sequester vulnerable people; stories of abject cruelty rip away the veil of inattention we cultivate to block from our view the relentless mill of everyday abuse, neglect, and hopelessness. In these moments of outrage, we perceive the true nature of institutionalization and perhaps even what we must do, but those flashes of insights quickly fade. Soon those with vested interests haul out the timeworn reform narratives and “bad apple” scapegoats that persuade us to look away again, to participate in systemic neglect from afar. 

As a LTC ombudsman I could not simply look away from the toll of daily abuse and neglect residents experience or ignore their justified feelings of abandonment and the despair it begets. My ombudsman work bears out what ought to have long been obvious to any attentive person, namely, that segregating people in institutions can never foster or indeed ever permit equal treatment.[1] Nor—as over a hundred years of disability history attests[2]—can this model be fixed through reform. We cannot fix that which, by its nature, leads to systemic human rights violations. Severing people (like older and disabled people) from their homes and communities necessarily devalues them as persons and citizens. The diminishment is felt immediately. The freedoms they enjoyed vanish as institutional regiments constrict the courses of their lives. These utilitarian routines deprive them of their privacy and autonomy for the sake of efficiency and cost-effectiveness. Confined in these facilities without the projects and relationships that endowed their lives with meaning and shaped their social identities, they experience a kind of social death.[3] And so too their former communities, continuing on without them, lose the connection to them as full persons still deserving of the moral consideration and respect we are obliged to confer on those people in the community. Isolated, powerless, and dehumanized, people institutionalized inevitably suffer grave harms, not only from abuse and neglect, but from the very act of banishing them from the moral communities that granted the rights and benefits they are now denied.

To be sure, congregate institutions try to simulate community to hide these realities, but such ersatz contrivances are no substitute for genuine social inclusion and belongingness; the simulations are parodies. Such a model cannot produce “person-centered care” no matter how many CMS regulations we enact and enforce. Nor can quarterly congressional hearings and regulatory tweaks—informed by the usual actors they serve to benefit—amount to anything more than theater, political performances that strike those people who must endure the injustice as thoughtless cruelty.

Only a transformative shift in public policy can end these injustices. This shift will require scrutinizing narratives widely considered axiomatic. These include the beliefs that institutionalization is an unavoidable consequence of aging and disability, that institutions provide safer environments (a claim long used to rationalize the barbarity of social removal despite evidence demonstrating the contrary), that uprooting people from the homes, communities, and personal identities they spent lifetimes nurturing is compatible with our most revered social ideals, and finally that we can outsource our humanity—that is, our moral and social obligations to one another, including our disabled parents and children—as a revenue source for corporations and the workers they exploit and expect humane results. 

By now, we know these outcomes of the institutional model; it is a model that objectifies deeply human concerns and favors economic values and imperatives such as competitiveness, efficiency, and profit margins, values that tend to attract predatory actors. And yet we persist with it, and one must ask why. Why do we continue to allow neglect, abuse, and dehumanization to go unchecked? Why do we allow those same predatory actors to manufacture and control the narratives that frame these issues, and indeed provide them platforms in the halls of Congress and in the media to influence unwitting advocates? Why do we persist with this cultivated naivety in the face of so much everyday suffering? The poor human rights records of congregate care facilities long predate the COVID-19 crisis, but the crisis has laid bare the preexisting conditions that led to deaths of over 181,000 disabled people in these institutions.

The horrors I witnessed as an LTC ombudsman keep me up at night, but also inform my disability justice work. And both my insomnia and activism partly derive from frustration. In deference to the industry, the system defangs oversight.  I have fought countless nursing home attempts to involuntarily discharge residents only to have found that those residents, some with severe dementia, had disappeared the following week—to where, the nursing home curiously had (or at least offered) no clue. Sitting at their bedsides, I have held residents’ hands as they recounted instances of rape and abuse, often by staff. Residents have had limbs amputated due to a lack of wound care, understaffing, and poor training. I have seen residents gasp for air as nursing home staff rationed oxygen to save money. I have called Health and Human Services on multiple occasions for residents due to cruel instances of retaliation, only to leave the residents open for more of the same because they sought assistance from a deliberately debilitated regulatory system. Finally, I, myself, have been threatened on multiple occasions by staff and operators. Despite my notifying HHS regulatory and the Ombudsman Program, nothing of substance was done. To the industry, ombudsmen are gnats to swat away; they well know consequences will not be forthcoming. After all, there are few if any consequences for the negligent deaths of residents.

Culture change is impossible within the institutional habitus, particularly so when professional and agency advancement, corporate profit, race, age, and ableism are added to the brew. From the institutional point of view, the dehumanizing model is working as intended. Hence, pumping in ever more money to fund the same solutions and reforms will not bring about different results. As we have seen during the COVID-19 pandemic, nursing homes made record profits from taxpayer funded COVID subsidies, yet COVID cases and deaths, along with non COVID deaths resulting from inadequate infection control practices and severe understaffing, continued to rise.
    

There will be no substantive change until we end the Medicaid institutional bias by diverting taxpayer funds away from institutions and to programs that maintain or reestablish community integration. As I often explain, nursing homes are the most subsidized industry in the United States and increased monetary rewards serve only to entrench industry malfeasance. Diverting Medicaid dollars to fund HCBS not only reaffirms our commitments to the Americans with Disabilities Act (ADA), the Supreme Court’s Olmstead decision, and our professed democratic principles, it will also do more to soften the resolve of a recalcitrant industry (and similar nonprofits) than years of congressional hearings. In the long run, we will waste fewer resources on researching deficient industry practices and developing complex strategies to instigate change (only to be undone by lobbyists), on Office of Inspector General (OIG) and the U.S. General Accounting Office (GAO) investigations, on Ombudsman programs, on regulatory agencies to maintain the illusion of oversight, on healthcare costs resulting from the industry’s negligence, and on subsidizing the industry’s cost of doing business.

Sincerely,

Lydia Nunez Landry

Certified Volunteer Long-Term Care Ombudsman

Organizer for Gulf Coast Adapt

Appendix:

As promised, I want to briefly review a few of the rhetorical and statistical practices employed by the industry and their lobbyists to reframe the human catastrophe exacerbated by the negligent practices in LTC facilities. The author of Care for Our Seniors Act, which aspires to learn from “tragedy” and implement bold solutions, concedes that LTC facilities were the epicenter of the “once-in-a-century” pandemic’s ravage. The force-of-nature language distances the 170,000 deaths (now up to 181,286 deaths) from any culpable agent. And indeed, no one is to blame for the virus, just as we can blame no one for a major flood. But we can blame them for negligent and habitual substandard practices (such as not maintaining levees) that substantially worsen the toll. The author mentions “independent research” by “leading…experts” which shows that “COVID-19 outbreaks in nursing homes are principally driven by the amount of spread in the surrounding community.” The only actual research offered—conducted in May, 2020, long before the vast majority of cases occurred—did conclude that size and location of facilities were factors while traditional metrics such as star ratings and prior citation for poor infection control were not. (Most of the citations were articles from industry magazines, one of which mentioned the article just cited.) It’s unclear how this exonerates the industry. Moreover, the study, thus interpreted, becomes an outlier, as much more research has found direct links between poor quality ratings and significantly higher numbers of COIVD cases and deaths (see here and here).

Instead of dueling studies, we might focus on statistics. The author notes another force of nature behind the deaths, namely time: aging and the fragility of bodies. The virus just happens to target the frail and elderly adults with underlying health concerns that live in their facilities. The author incorrectly asserted that the average age of nursing home residents is 85, but correctly asserted that most residents have underlying conditions, as indeed most people over 65 years old have multiple chronic conditions, in and out of LTC facilities. First some numbers:

The U.S. has approximately 52 million citizens aged 65 or greater. Of them, 430,000 have died from complications of COVID-19 infections. Of those, 130,000 died in nursing homes—the author mentioned 170,000 deaths, but that includes congregate facilities the data from which is sparse, so I shall stick with the 130,000 in nursing homes (NHs). Thus, 300,000 died elsewhere than a NH. NHs warehouse approximately 1.4 million residents, ~ 90% of whom are 65+ years old. The total number of cases in NHs is, at the moment, 643,314, and, for non-NH people in the same age group, 2,666,625. Looking at the bare infection and death numbers, one might think that nursing homes did well—too well, in fact, for the author’s contentions.

But consider again that most people over 65 years old have chronic conditions and most people, even with their bleach wipes, have rudimentary infection controls in their homes. Now, 9.28% of the 1.4 million people in NHs have died from COVID; we can round that up to 1 in every 10. But if non-NH people in the same fragile age group died at that rate, we would have an incredible 4,342,857 more deaths than we do, as only 1 in 167 non-NH elderly people died from COVID. Indeed, examining only those infected, you are nearly twice as likely to die (20% vs. 11%) if you’re in a NH than not. Indeed, the infection rate in NHs is 46% vs. 5.3% for non-NHs fragile people. 

Now, ultimately, industry spokespeople will claim that the deaths occurred because all these people are interacting in close quarters, and so on. But this is not something that can be fixed, and so it underscores why we need to turn back to community integration instead of warehousing people in admitted death traps.


[1] See, for example, Liat Ben-Moshe, Decarcerating Disability: Deinstitutionalization and Prison Abolition (Minneapolis, MN: University of Minnesota Press, 2020).

[2] Sara F. Rose, No Right to Be Idle: the Invention of Disability, 1840s–1930s (Chapel Hill, NC: The University of North Carolina Press, 2017).

[3] Jana Králová, “What Is Social Death?” Contemporary Social Science 10, no. 3 (2015): pp. 235–248, https://doi.org/10.1080/21582041.2015.1114407.

The Media & The Republicans Keep Screaming “Tax Increase” As Biden Attempts to Upgrade the U.S.: That’s Propaganda & Misinformation

Reducing Tax Expenditures is a Not Tax Hike

When the Clinton Administration made major reductions in welfare benefits, Republicans and the media didn’t call that particular policy change a “tax cut.” It was a reduction in benefits for the ostensible purpose of imposing “discipline” on poor people – which was a scurrilous, racist, stereotype. Wealthy Americans and corporations receive far more in government benefits than all programs for the poor combined. Those benefits are dished out through the tax codes.

When individuals and corporations are provided benefits such as mortgage interest deductions on expensive real estate such as a second home in Vail, Colorado, or accelerated depreciation allowances, those are government benefits – they are technically known as a “tax expenditures.” The Budget Control and Reconciliation Act of 1974 requires that tax expenditures be included in the federal budget on the expense side of the balance sheet. The amount of those expenditures in 2019 totaled $1.5 trillion. When we have a handle on the COVID relief for corporations and individuals in 2020, that will most certainly rise to at $2 trillion or higher. Much of that was unnecessarily dished out to corporations that didn’t deserve it, while many small businesses languished without customers, revenue, and a line of credit.

The Debt & Deficit Fetish Is Harmful to U.S. Progress

The “higher taxes” narrative is repeated incessantly by journalists who fail to understand the U.S. tax and budgetary system. Federal programs are not legislated into existence accompanied by a specific tax to pay for them. Rather, debt/bonds are issued, i.e., the government creates money to pay for programs. The amount of debt issued will exceed revenue from income taxes; hence, debt will increase due to a deficit in revenue versus expenditures.

Debt is not a problem unless the amount of money created begins to cause inflation. If that happens, the amount of money in the economic system can be reduced through adjustments to the tax codes. At this time, federal debt is is equal to approximately 100% of GDP or $20 trillion. The official inflation rate has been running at or below 2% for the past ten years (https://www.usinflationcalculator.com/inflation/current-inflation-rates/).

Republican leaders know that a large amount of debt is incurred through tax expenditures. They also know that those expenditures are tilted toward the upper income brackets and therefore increasing maldistribution of wealth. They will claim that these benefits for corporations and wealthy individuals incentivize capital expenditures and investment in job creating businesses. That could be partially the case, but for the most part these give aways are unnecessary and don’t do much for economic growth and job creation.

Mitch McConnell and other Republicans scream about deficits and debt when they want to obstruct a Democratic Administration from succeeding at passing programs beneficial to the country and beneficial to the Democratic Party at the same time. Unfortunately, too many Democrats have acquiesced in and even supported the reactionary debt/deficit fetish. Until liberals/progressives learn to frame the argument in accordance with reality and sound economic theory, misinformation and propaganda will undermine the U.S. as a nation and a society.

Why Has Failed Nursing Home Mogul Joseph Schwartz Not Been Charged with a Crime for Stealing Millions from His Employees?

Who Are the Real Criminals In the United States?

U.S. prisons are filled with people who shouldn’t be there. Their crimes are relatively minor.  However, the really big criminals who steal millions aren’t locked up.  They are the “white collar criminals.”  Let’s take Joseph Schwartz as an example of a white-collar criminal par excellence. Schwartz is well known in the nursing home system.  He was able to obtain licenses for over 100 skilled nursing facilities in 11 states.  He failed to pay vendors and employees as he pocketed Medicare and Medicaid funds and eventually drove his company – Skyline Healthcare – into insolvency.  In the process of creating a failed company with borrowed money, he stole millions from his nursing home employees. This theft happened several years ago and has been widely reported in the media[i] and yet no arrest has been made and no charges have been filed.

As the New York Times pointed out in an editorial a couple of days ago,

 “In New York, as in many other states, stealing more than $1000 is a felony. A person who grabs a new iPhone, can end up in prison, at public expense, for four years.

    In New Jersey, which has the most stringent standard in the United States, a person can be convicted of a felony for stealing more than $200 – a number that hasn’t changed since 1978.”

Serious Crime Doesn’t Seem to Matter if the Criminal is a Nursing Home Operator and Employees & Patients are the Victims

Schwartz deducted money from employee paychecks for health insurance.  Instead of buying the insurance, he pocketed the money.  As many as 1000 employees were victims of this criminal behavior in several states.  Kansas was one of those states.  I called the Kansas Attorney General’s office to find out if any investigation was underway.  On the second call, I was lucky enough to connect with someone who was kind enough to direct me to an investigator who said he was indeed conducting an investigation, but couldn’t tell me anything about it. 

It is hard for me to understand why an investigation into a crime that occurred years ago is still pending without an indictment or charges dismissed.  Either Schwartz took the money illegally or he didn’t.  It should not be hard to determine that.  Employees allowed him to deduct the money with the understanding he would buy health insurance.  He didn’t. 

If nursing home employees are caught stealing from an owner, I doubt if it would take years to charge them with a crime.  My guess is that they would be handcuffed and walked out of the building to jail.  According to media accounts the only justice available to employee victims of Schwartz is a lawsuit they, themselves, filed.

The Long-term Care System is Beset with White Collar Criminals Who Act with Impunity Because there are No Consequences

I know of no attorney general in any of the states in which Schwartz operated who has filed criminal charges against him. Given the seriousness of the crime and the amount involved, AGs in states like Kansas, Arkansas, Pennsylvania, and Massachusetts are dilatory in carrying out their responsibilities.

Furthermore, I’m appalled at the lack of advocates’ interest in redress for victimized employees of the notorious Skyline venture and its sleazy, criminal owner.  It seems to me that the AARP (not much of an advocacy organization) and other organizations such as Kansas Advocates for Better Care and individuals holding themselves out as advocates for patients and employees would be demanding answers from state AGs regarding the lack of action in holding Schwartz accountable. 

My suspicion is that every state which granted Skyline a license screwed up.  Had they done their due diligence, they would have found a trail of evidence screaming “don’t turn nursing homes over to this shady character.”  My research also suggests that he moved in on Golden Living nursing homes looted by a private equity firm and, like a vulture, treated them as his carrion – to be scavenged and left to rot. States were anxious to unload a bunch of facilities in receivership (left in the wake of private equity looting) and a predator was allowed to move in and create a tragedy on top of a tragedy.

What Does the Schwartz/Skyline Scandal Tell Us About How We View Patients & Employees of Nursing Homes?

During my career in industrial relations, I worked for corporations that considered employee pay sacrosanct.  To us, pay was near and dear – no one fooled with it.  Our hourly employees were valuable stakeholders in the enterprise. They came to work every day in good faith and deserved to be paid for what they did.  Without them, we could not grow the company and earn a reasonable return for shareholders.  We also had respect for the quality of our products and services. We did not cheat our customers.  Indeed, no self-respecting corporation did that. We were driven by a philosophy known as “managerial capitalism.”

The attitude of corporate management began to change in the 1980s.  A ridiculous and theoretically unsound management theory was foisted on the public by conservative economists.  As opposed to managerial capitalism, celebrity economist Milton Friedman and his cohorts convinced the business world and politicians that capitalism works best when corporate management (and government for that matter) attends to one objective:  protecting and enhancing shareholder value.  Friedman was even given a platform on PBS during the 1980s to sell his idea to the public – and they bought it.

This “agency theory” of management has been destructive for both U.S. capitalism and our culture and society.  It has elevated wealth and predatory behavior to an acceptable business strategy.  White collar criminals are only charged with a crime when they victimize other well-heeled white-collar individuals.

The main problem with the overriding value of money and shareholders is that other human beings are devalued.  The least powerful and poorest human beings are devalued the most.  They become prey for institutional needs.  They fill prisons and inhumane nursing homes either because they are seen as of no value or because they can add value to revenue producing real estate.

The goal of a Friedman capitalistic system is to suppress wages and exploit workers.  If they get cheated despite providing sincere hard work, too bad, it’s conducive to shareholder value and OK. One of the many problems with this situation is that the proponents of this form of hyper-capitalism also set about to destroy employee bargaining rights and have made great progress in that endeavor.

Patients and employees in nursing homes depend on government agencies and advocacy organizations for protection. If state AGs won’t hold predators accountable and advocates won’t demand that they do that, institutionalized elders and disabled individuals are defenseless. Furthermore, if operators have no moral hazard they will continue to abuse and exploit both workers and patients.


[i] See, e.g., David Porter, Associated Press  (February 5, 2020), “Failed nursing homes’ operators stole from employees,”; Star-Ledger (Newark, NJ) (February 7, 2020), “Nursing home operators stole $2M from employees’ paychecks, lawsuit claims”); U.S. Fed News (June 27, 2019), “Skyline Healthcare owner, 5 Massachusetts Nursing homes cited for wage theft”; Ann Neuman, The Guardian (July 30, 2020) “Seniors and staff caught in the middle of nursing homes’ quest for profit; The cycle of buying and selling care homes has led to shortcuts, closures, even fraud – and imperiled vulnerable residents’ health”; The Leavenworth Times (February 6, 2020), “Suit: Failed nursing homes’ operators stole from employees.”

The Impact of Voter Suppression on Elderly & Disabled Americans

The Reason Corporate America is Silent About Restrictions on Voting Rights

Blue Chip corporations such as Delta Airlines, Coca Cola, and UPS, have recently been strong proponents of civil rights for practically every class of citizen suffering from discrimination. They have sent their lobbyists to state legislatures to support anti-discrimination legislation and to pressure legislators for enhanced gay, ethnic, and gender rights. But when it comes to voting rights, corporate America is, for the most part, silent. Why?

It is understandable that more democracy is not in the best interests of corporations as they have evolved over the past few decades. Beginning with the Reagan Administration, the Milton Friedman philosophy of radical shareholder rights became a political movement. Throughout the past 40 years, deregulation has become de rigueur – even among some Democrats. Tax codes have been incessantly modified for increased transfer of wealth from the mass of Americans to ultra high net worth investors.

Corporations may jump aboard with some social responsibility movements, but more democracy is a bridge too far. Indeed, less democracy will be more protective of low corporate tax rates and tax subsidies. The Trump/Republican 2017 Tax Cuts and Jobs Act was an extreme move to subsidize corporations and wealthy individuals. They certainly won’t want to give that up and will fight to keep it.

Voters overwhelmingly favor reforms that would hit corporations in their bottom lines (or in their cash flows). Corporate executives, corporate boards, and major investors do not want to see voters have the power to set things right – to make the system more just and fair. This is not good news for all proponents of democracy, but it is especially threatening to institutionalized elderly and disabled Americans.

Deregulation & Government Capture Are Bad for Elderly & Disabled Americans

Republican voter restriction laws typically undermine the ease of absentee voting, which is of particular importance to people who have difficulty getting out to the polls. Missouri has the most restrictive voting laws in the nation. An absentee ballot must be notarized. It is likely that the draconian voting restrictions (e.g., no early voting) of Missouri will be copied by other states controlled by reactionary Republicans.

Voting restrictions designed to defeat candidates in favor of liberal democracy are particularly dangerous for elderly and disabled Americans, many of whom are institutionalized or could at some point be in need of long-term skilled nursing care. Reactionary conservatives will reward industry with less oversight and increased up-transfer of wealth through privatization and tax expenditures. Money that could be invested in care will be pocketed by investors at the expense of patients – even more so than now. Horrid conditions pervasive in publicly funded skilled nursing facilities will become worse.

The “Reagan Revolution” has not run its course. It has become increasingly fanatical and the politics of the Republican Party have become toxic and sick. Some of the nasty subtexts noticeable during the early phase of the revolution have become glaring and potent in the movement today. For instance, white supremacist, social Darwinist “survival of the fittest,” “winner take all,” “let nature take its course” attitudes can be seen in the treatment of refugees at the Southern border, refusal to increase the minimum wage, lack of safety for workers, and refusal to address debilitating, neglectful care for people in nursing homes – just to name a few manifestations of government for plutocrats rather than for everyone.

In the world of unfettered capitalism and autocracy, the elderly and disabled have little value except as products to be monetized and utilized to add value to revenue producing real estate or to justify excessive prices for privatized medicine. If the current anti-democratic moves on the part of right-wing reactionaries succeed, our lives will be shortened more than they currently are through isolation, segregation, and debilitating institutionalization. Unfortunately, American capitalism has become debauched and only liberal democracy can save us from a very dark future.

Kansas Legislature Grants Nursing Home Corporations Immunity from Law Suits for Failing to Protect Patients in Their Care

Due to the persistent efforts of LeadingAge, American Health Care Association, and a host of nursing home providers and suppliers, the Kansas legislature passed a bill that protects long-term care providers from law suits for dereliction and negligence during the COVID-19 pandemic. The legislation grants immunity to providers except for “gross negligence” on the part of the staff. Good luck with proving that.

Sympathy expressed for the operators is one of the most disgusting facets of the proponents’ framing of the issues. According to the Kansas City Star, “proponents of the bill argued that nursing homes were not given proper guidance and resources from state agencies at the onset of the pandemic.” Senator Kellie Warren, a Leawood Republican, was quoted as saying, “That we as a state didn’t provide those things but we’re also not going to provide them immunity is an untenable situation for adult care homes” (https://www.kansascity.com/news/politics-government/article250201305.html).

I’ve seen this frame before. The industry is blaming government agencies for not providing them with sufficient training in infectious disease control and for not providing them with personal protective equipment. Providers have been well-reimbursed and investors have extracted excessive funds out of a care system for frail elderly and disabled patients, but they don’t believe they are expected to operate their businesses professionally.

If you follow the press releases on the AHCA/NCAL website, this framing of the issue will sound very familiar. The attitude of the industry is “it’s not our fault, we didn’t know anything about rapidly spreading novel viruses.” Although the long-term care industry has been in the business since 1950, and although it has spawned millionaires and billionaires, operators aren’t capable of taking proper care of people for whom they are paid to be responsible.

I’m wondering what planet I’m living on when I see learned helplessness as an excuse for gross negligence and incompetence. And I say to activists, journalists, and others, please don’t think that the non-profit arm of this business is qualitatively better than the for profits (with the exception of a tiny number of not for profit facilities). The Evangelical Lutheran Good Samaritan chain is the largest non-profit and one of the largest in general. It’s care is as subpar as the low quality for-profits (which is most of them).

LeadingAge: The Non-profit Nursing Home Lobbying Organization is Leading the Charge for Immunity

Rachel Monger, the lobbyist for LeadingAge Kansas, expressed her opposition to an earlier immunity bill in Kansas worked out between Governor Kelly and the legislature. She was of the opinion that the bill did not go far enough in relieving providers of responsibility for neglect and dereliction because “the affirmative defense shield” left providers open to attack. Ms. Monger is of the opinion that the earlier legislation “amount to ‘demoralizing punishment.”

I’ve seen Ms. Monger in action several times at legislative hearings. For instance, I observed her argument against stiffer regulation of psychotropics. She claimed that the providers had a profit margin of a half percent. In corporate speak, this sounds like child babble, but she was waving the Clifton, Larsen, Allen (CLA) annual report around, which is bogus. I look at these industry propaganda pieces every year.

What are Nursing Homes? What Are Operators Expected to Know?

The attitude of the industry is this: “We’re running medical facilities full of medically vulnerable patients, but we can’t be expected to know much about infectious diseases.” In other words, their business is protecting and enhancing shareholder value – not reinvesting earnings in innovative and higher quality, medically ethical, professional care. It’s about the money. If they say, “it’s not about the money,” it’s about the money. Warehousing people at the lowest possible cost is their mode of running their institutions.

I have been warning and will continue warning ad nauseum, ad infinitum, that by letting the industry off the hook for the 300,000 preventable deaths, the lives of medically fragile people in nursing homes will be seriously endangered. If operators and their corporate holding companies can get away with their negligence of the past year, the message will be this: the lives of people in your care aren’t that valuable, so cut costs, warehouse patients, and extract as much cash as possible out of the system.

The Voters of Missouri Passed Medicaid Expansion. The Republican Controlled Legislature Won’t Fund It

We, the citizens of Missouri, fought hard to expand Medicaid under the Affordable Care Act. I was one of the 23 people known as the Medicaid 23 who were arrested, tried, and convicted for making too much noise about it one day in the Missouri Senate. Exhortations, demonstrations, and civil disobedience didn’t move the Republican reactionaries running the state legislature, so the citizens collected signatures and had it placed on the ballot. It passed.

But the Republican Party has become so toxic, mean, and anti-democratic that Missouri Republican legislators are refusing to fund health care for our fellow human beings too poor to obtain it under the Affordable Care Act but not poor enough to qualify for Medicaid. “The House Budget Committee voted along party lines not to pass a bill allowing Missouri to spend $130 million in state funds and $1.6 billion in federal money to pay for the program’s expansion” (https://www.kansascity.com/news/politics-government/article250170945.html).

There is no doubt that the white male, racist, rural, religious-fanatic, controlled legislature is out of step with the majority of Missourians. However, gerrymandering, voter suppression, and money to keep urban voters at a disadvantage. A feckless Democratic Party doesn’t help matters much either.

The Medicaid 23

We were a group of community activists who met at Reverend Hartzfeld’s Missionary Baptist Chruch on Linwood Boulevard. Prior to his death a few months ago, Reverend Hartzfeld was the patriarch of the Kansas City African American community. I was honored to be included in the group that decided that decided to carry out a protest at the state senate to express our outrage over the lack of medical care for poor people – for no other reason than they are poor.

Legislators would not meet with us or even respond to our letters, emails, and phone calls. Se we went to the capitol to get their attention. We demonstrated in the gallery while the senate was in session. We were told to shut up and we didn’t. We were arrested, and, after a three day trial, convicted by a white jury in the middle of Missouri. Tony Messenger wrote this in the St. Louis Post Dispatch: “This trial has the foul odor of history.”

Here is a picture of the “criminal” Medicaid 23:

The tall young white man in the front row was one of our lawyers. He is also a Republican in the Missouri House of Representatives. He fought hard for us and was also outraged by our arrest. Reverend Hartzfeld is the man with the cane in the middle of the front row.