The AHCA/NCAL & Brown University Long Term Care Data Cooperative: A Horrifying Move by the Nursing Home Industry to Control Nursing Home Data Analytics.

What is the Long Term Care Data Cooperative?

    The lavishly funded American Health Care Association/National Center for Assisted Living publishes Provider Magazine – a very slick piece of propaganda, the purpose of which is promotion of the nursing home industry.  In the November/December 2022 issue, the magazine included an article entitled Where Innovation Meets Data: The Long Term Care Data Cooperative.

    This newly minted institution is, according to the author, “the first of its kind in the world.” The author provided – unwittingly, I’m certain – a scary and chilling description of this so-called “innovation:” “Formed in partnership by AHCA/NCAL and Brown University and funded by the National Institute of Aging, the Cooperative is an effort to improve the quality of care within skilled nursing care centers through a new – and collaborative – approach to gathering and sharing patient data.” 

    According to the article this is a “large-scale effort” in which any long-term or post-acute center can enroll.  The data will apparently come from multiple electronic record (EMR) software vendors “into a single repository of information.”

Who Gets the Data?

    Given the industry’s money and political power, advocates, researchers, and activists should be very wary of any flow of data through the health care system controlled by the AHCA/NCAL.  I can think of no other government data set collected from taxpayer funded contracts that is controlled by an industry as opposed to the funding agency.  This cooperative – industry front organization – will provide the data to “vetted federally funded researchers.” 

    And how will the vetting process work?  According to the article, it will work this way:  “Researchers will need to move through an extensive approval process to gain access to the Long Term Care Data Cooperative, which will include input from participating providers, who have the opportunity to review each application and decide on appropriate uses of data.”

Advocate, Researchers:  Reread the Above Quote and Think Seriously About It!

    If providers and the AHCA/NCAL decide who has access to the data and how it is used, this entire enterprise will benefit the industry without any commitment to evaluation of care on behalf of the U.S. taxpayers.  Those of us with an allegiance to science, integrity, and research ethics and who have had access to large government datasets, can quickly recognize how scientifically and ethically flawed this process is.

    Think about what the industry has been able to pull off with the imprimatur of Brown University and the National Institute of Aging.  A government agency is funding industry control over data that belong to the people of the United States.  This has huge scientific, democratic, and moral implications.  This is not the way the government should work, and as far as I know, has ever worked in relationships with qualified researchers.

Why is Hospital Data So Accessible While Nursing Home Data is So Inaccessible?

    My department chair at Kansas University Medical Center asked me to design a course on large datasets and statistics – essentially a data analytics course for PhD students.  I did that. In that endeavor, I used the H-CUP hospital dataset, which I purchased each year for $300 from the Agency for Health Quality & Research (AHRQ).  The file included approximately 200 variables and eight million cases (de-identified patient data).

    The process for obtaining this dataset is rather simple (see:  https://hcup-us.ahrq.gov/).  Researchers simply need a legitimate purpose for using the data and be willing to sign a data use agreement.  No hospital corporation had any role in vetting users of the data nor a say in the the nature of the research.  Although I retired from KUMC, I can continue to obtain the data and have indeed ordered it on occasion.

Democracy Requires Openness and Information to Which the Public Has Access

    When residents of a country are shut out of the flow of information critical to knowledge of how their taxes are utilized, they have no say in governance, and, therefore, no real democracy.  They cannot advocate intelligently and effectively for their rights as funders of programs that should benefit them.  When they are kept in the dark and subjected to what monied interests choose to tell them, they lose their right to expect a competently run program for which they are paying.

    When powerful industries withhold, misrepresent, and misuse data, the taxpaying public will of necessity be cheated.  In a democracy, residents have a right to know the results of programs which they need and for which they are paying.  However, as authoritarianism grows, concentrated wealth and power increasingly filter information. 

    The AHCA/NCAL misrepresents financial data on behalf of its corporate members with impunity.  They not only get a pass on their lack of integrity, their claims regarding providers’ financial hardships due to low Medicaid reimbursement are repeated by some well-known economists in peer reviewed journals.  Never have I seen evidence provided for these claims.  Conversely, I can produce, and have, produced an abundance of evidence to the contrary.

    It is critically important that advocates, activists, and, hopefully, journalists confront the industry’s misrepresentations.  Their propaganda is deadly.  Rather than provide adequate care, too many nursing homes extract maximum cash while providing minimal care.  It seems to me that AHCA/NCAL-Brown University data enterprise is configured to continue that unsavory characteristic of long-term care industry.

DEMOCRACY, CORPORATE FINANCE, & MEDICAL ETHICS

Nursing Home Companies are Making Money but are Not Telling Taxpayers the Truth About it.  Our Deductive Reasoning Skills Can Easily Reveal the Truth.

Welltower Corporation is a major player in the nursing home industry. Indeed, it is the dominant player.  The major share of its $4.72 billion in 2021 revenue is provided by U.S. federal and state governments – from the taxpayers of America.  Their business is senior housing real estate and medical care for people residing in their nursing home properties. 

The public has a right to expect that medical care is the overriding mission of corporations involved in tax funded nursing care. That is not how Welltower executives view their role in the privatized, publicly funded, healthcare system.  In their 2021 annual report they stated, Our primary objectives are to protect stockholder capital and enhance stockholder value. We seek to pay consistent cash dividends to stockholders and create opportunities to increase dividend payments to stockholders as a result of annual increases in net operating income and portfolio growth (https://welltower.com/wp-content/uploads/2021/04/2020-Annual-Report.pdf, p. 2, accessed 5/21/2022).

Welltower is one of the few nursing home companies listed on a public stock exchange.  As their annual reports and the value of their stock in the current market crash indicate, they are achieving their financial objectives.  As the Dow, S&P, and NASDAQ have tanked in the past few months, shares of publicly listed nursing home-related corporations are at, near, or above their value in late November when the markets began to sink at significant and at times precipitous rates. 

These are solid corporations loaded up with commercial real estate, the value of which is enhanced by guaranteed revenue through Medicare, Medicaid, and generous tax advantages – gratis the U.S. taxpayers.  This is the reason asset managers such as BlackRock and Vanguard have guided $billions of pension, sovereign wealth, and family office, funds, overseen by institutional investors, into asset-laden nursing home companies. As the markets fall, they are not moving money out of these equities and seeking a safer haven (In a blog post today, I provide an analysis of the stock performance of nursing home and other government-funded medical care corporations between the end of November 2021 and the end of May 2022).

The Big Lie from the Nursing Home Industry: “We Aren’t Making Enough Money to Provide Medically Ethical & Humane Care.”

Thousands of privately held corporations in the form of Limited Liability Corporations, Limited Partnerships, and other legal structures own from a few to a hundred or more nursing homes. Examples include, the privately held Pruitt chain, Diversicare, and several other substantial chains operating in various parts the United States.  Years of interviewing employees, families of patients, reading inspection reports and media accounts, have convinced me that medical care in these facilities is substandard to nonexistent.  Abuse and neglect are pervasive.  Most of the care is provided by medically nonqualified and extremely low paid nursing assistants.  Generally speaking, these are inhumane institutions. The thought of ever ending up in one is horrifying to most people.

Industry Prevarication & Misinformation about High Investor Returns

Although, evidence overwhelmingly suggests that investors are reaping huge returns from shoddy care, the American Health Care Association (AHCA) –  the major industry lobbying firm and industry propaganda arm in Washington and the 50 states – successfully promotes a big lie:  “provider net income is so low that they can’t treat patients humanely or pay higher salaries and wages.” On its face, that is absurd. But apparently it hasn’t dawned on legislators, bureaucrats, and the media that investors wouldn’t be investing in a venture with low returns while so many opportunities for high returns are available in the financial markets.

My colleague, professor Charlene Harrington, and I have debunked that argument as it pertains to publicly listed companies. We, like the rest of the public, have access to financial statements required by the Securities and Exchange Commission (SEC).[1]  However, we do not have access to consolidated financial reports for privately held companies. We can’t see their income statements, balance sheets, or cash flow statements. Therefore it is very difficult to evaluate industry claims regarding earnings – difficult but not impossible.

Each of the approximately 13,000 facilities licensed to provide nursing care and certified to be reimbursed by Medicare and Medicaid are required to submit “cost reports, which include revenue, expenses, net income, and a host of other financial metrics.  With the exception of California, these CRs are difficult to obtain. But we have now gained access to every filed CR in the U.S.  Our analysis so far is telling us that the low net claim is a big lie; that fraud is rampant; and, that states are failing to audit the reports.

Low Risk, High Return Fueled by Government Funds with Little Financial Oversight: the Reality of Nursing Home Investing

As we pour over CRs – mostly in California, New York, North Carolina, and Kansa – we see reported net income as a fiction.  We have also come to believe that the low 2020 net of .5% claimed by AHCA and its hired propaganda accounting firm Clifton, Larson, and Allen (CLA) is scurrilous nonsense – unbecoming of the 8th largest accounting firm in the U.S.

 As one example, misinformation, if not outright fraud, is replete in the CRs of 25 Kansas facilities owned by Florida based private equity firm Windward Health Partners, LLC. Although the average net income reported by these facilities is 8.6% – far higher than the average claimed by AHCA & CLA – they are not reporting payments to their own property LLCs. Also, their chain goes goes by the name of Mission Health Communities. What they don’t note on their CR is that MHC is a related party – a management LLC set up as a company they own and are paying to manage their facilities. Hence their net is drastically lowered due to payments to other companies they own.

 Although Mission Health Communities is falsely noted as the owner of these facilities, it exists as the typical private equity squeeze forced on victim companies.  Mission Health Communities is paid a management fee but is, in reality, a separate LLC in the Windward Health Partners portfolio.  That payment, along with a lease payment to a property LLC, and perhaps other payments to Windward owned ancillary services such as therapy, are expensed on the income statement. In effect, these facilities are making payments to entities owned by their parent corporations and reducing their net income reported to the State of Kansas.

According to CRs submitted by Windward, Kansas taxpayers paid the company $103,403,493 in total 2020 revenue. Because of omitted information and opaqueness of the system, only company insiders know how much cash flowed out in the form of lease payments, management fees, and possible other ancillary services. The 25 facilities received an average of $249,063 in COVID relief payments. I say cash because these payments to itself is gravy for partners and limited partners in Windward Health Partners, LLC.

Democracy & Medical Ethics

The people of Kansas have no idea about how their tax dollars are flowing out of their state into investment firms like Skyway Capital Partners of Tampa Bay, Florida – the financial firm that has capitalized Windward Health Partners. That is not because Kansas residents are dumb. Rather they don’t know how government funds flow from facilities to parent corporations structured as private equity, LLCs, C and S corporations, and limited partnerships, because the system is designed to operate behind a veil of secrecy. For the most part, the Kansas legislature and state bureaucrats have been captured by the industry.

Employees at the Kansas Department of Aging & Disability Services are far more protective of industry financial secrecy than they are of the public’s right to know how their tax dollars are being utilized. The deck is stacked in favor of the industry. Getting substantive information from KDADS is like getting red meat out of a tiger cage.

Medical care is substandard in nursing homes across Kansas but shareholder value overrides medical ethics. Indeed, you will be hard pressed to find a physician around a nursing home at any given time. You will also be hard pressed to find more than a hand full of physicians who really give a damn about what goes on these institutions. The medical profession is silent, the bioethics profession is silent, and the voters are kept in the dark. That’s not how democracy is supposed to work.


[1]Kingsley D, Harrington C. (2021) “COVID-19 had little financial impact on publicly traded nursing home companies.) J Am Geriatr Soc. 2021;1–4. https://doi; Kingsley, D Harrington, C. “Financial and Quality Metrics of A Large, Publicly Traded U.S. Nursing Home Chain in the Age of Covid-19, International Journal of Health Services, 1-13, https://doi: 10.1177/00207314221077649.

Did You Know?

By:

Dave Kingsley

  • On July 30, 1943, Marie-Louise Girard was the last woman guillotined in France.  Her crime:  assisting women with abortion.  Many of the women she was helping had been raped by Nazi occupiers.  A 1988 movie, Story of Women, dramatizes her life.

  • Between 1908 and the present time, approximately 400,000 U.S. residents have been forcibly sterilized by state and federal government bureaucracies.  The U.S. Supreme Court upheld the constitutionality of state sterilization laws in the 1927 case of Buck v. Bell, Superintendent 274 U.S. 200.  Oliver Wendell Holmes wrote the majority opinion in which he stated the following: It is better for all the world, if instead of waiting to execute degenerate offspring for crime, or to let them starve for their imbecility, society can prevent those who are manifestly unfit from continuing their kind. The principle that sustains compulsory vaccination is broad enough to cover cutting the Fallopian tubes.  Three generations of imbeciles are enough.

    Buck v. Bell
    is still extant case law – it has never been overturned.  The state of Oregon carried out a state ordered sterilization in 1981.  Over the past few decades evidence of involuntary hysterectomies and tubal ligations carried out on ICE detainees and women prisoners in the California prison system has been consistently surfacing.
     
  • Louisiana House Bill 813, which has cleared the Louisiana House Committee on Criminal Justice by a vote of 7 to 2, defines abortion as homicide, which would carry a penalty of life in prison without the possibility of parole.  Critics of the legislation have argued that the bill will even outlaw use of IUDs as a contraceptive.

  • Aging prisoners have been the fastest growing demographic in the vast U.S. prison system. Human Rights Watch estimates that the age 65 or older inmate population grew an astonishing 94 times faster than the total sentenced prisoner population between 2007 and 2010. The older prison population increased by 63 percent, while the total prison population grew by 0.7 percent during the same period.
    Source: (https://www.hrw.org/report/2012/01/27/old-behind-bars/aging-prison-population-united-states).

Bioethics:  Institutionalization & the Rights of Humans to Control their Bodies.

By: Dave Kingsley

Involuntary Institutionalization & Human Rights, & Humane Treatment

Individuals institutionalized involuntarily in prisons, nursing homes, immigration detention centers, and juvenile facilities, are vulnerable to abusive, neglectful, and often deadly treatment.  These groups of U.S. residents are overwhelmingly institutionalized under conditions in which authorities, professionals, staffs, and other inmates control their daily routines and other living conditions. They may be subjected to psychotropic drugs, which deprive them of liberty and cause them mental and physical health problems, to violence from other inmates and staff, and medical procedures, which may occur with or without their consent.

In addition to forcible and invasive medical treatment, needed and even preventative medical care is often withheld.  As my previous blog post suggested, leading, establishment bioethicists have theorized – shamefully I might add – that withholding beneficial medical care from the elderly would have a positive effect on the U.S. economy by lowering government budgets. They conclude, therefore, that it is morally justified and medically ethical to intentionally shorten the lives of t elderly and disabled Americans.

The desire of religious and governmental institutions to exercise control over the bodies of human beings under their control has been a threat to human rights throughout history.  Power and control are fundamental principles underpinning forcible sterilization, involuntary psychotropic protocols, denial of birth control/abortion, and torturous incarceration.  Indeed, a woman’s right to terminate a pregnancy or even to use contraceptives such as the “morning after” pill will probably be outlawed in the U.S. within a mere month or two by a Supreme Court, religious extremist, majority.

The elderly, women, ethnic minorities, immigrants, and impoverished classes are a threat to the power and economic interests of white (Euro-American) patriarchal ruling elites.  Therefore, as a ruse in protecting their power and economic domination, establishment elites have devised methods for undermining attempts by the powerless classes to organize and influence change in power relationships.

Criminalizing & Institutionalizing the Poor and Powerless is Profitable

Institutionalization, along with abusive and neglectful treatment of inmates, involve blunt instruments such as drugging, restraining, and hitting.  However, these conditions are facilitated by misfeasance and nonfeasance on the part of government agencies and legislators.  Furthermore, the efficiencies of these management techniques are compatible with privatization. Over the past century, industrialists have recognized opportunities in the commoditization of human bodies in nursing homes, ICE detention centers, prisons, juvenile facilities, and other institutions for the powerless.

Hence the real estate housing inmates and government funds for managing and controlling human bodies within four walls have proven to be quite lucrative.  Investors in prisons, ICE detentions centers, and nursing homes have become fabulously wealthy (or have added an extraordinary amount to their family wealth).  Given the corrupt nature of politics, shameless and blatant purchase of legislators’ approval for the ongoing atrocity of institutionalization for the sake of enriching the already rich, transforming inhumane institutions will be a heavy lift.  We must end them – not mend them through sham recommendations from commissions controlled by the power elite.