In 2016, the General Accounting Office Makes Recommendations Regarding Accurate and Reliable Nursing Home Financial Reports:  HHS Says “Thanks, but No Thanks.”

    In 2016, the General Accounting Office (GAO) reported the results of its investigation into the reliability and validity of financial information submitted by nursing home corporations.  The GAO was tasked with determining how skilled nursing facilities “spend their Medicare and other revenues.”[1]  In its report, the GAO recommended that CMS undertake two actions: “ (1) improve public stakeholders’ ability to locate and use SNF expenditure data and (2) ensure the accuracy and completeness of the data.”[2] According to the report, “HHS concurred with the first but not the second recommendation, citing resource considerations.”[3]  The agency’s partial concurrence is farcical.  What is the benefit of making financial data available to the public if the data is inaccurate and unreliable?

    HHS disagreement with a reasonable recommendation by the GAO that CMS demand honest cost reports from contractors, should evoke the public into a profound and angry reaction. For an agency with a FY 2023 request for discretionary budget authority of $127 billion and $1.7 trillion in mandatory budget authority[4] a project for making financial data easily accessible to the public is de minimus in the overall scheme of its expenditures.  The cost of a reasonably accessible database containing well-audited cost reports from each facility would be a trivial expenditure – so trivial that it would have no meaningful impact on government deficits and debt.

    The problem is that the public has not been stunned by the rejection of the GAO investigators’ recommendations and their stated belief that  “CMS should provide reliable SNF expenditure data”[5] because the public has not been made aware of the report or what it contains.  That in itself is puzzling.  A government agency for the responsibility of nearly $2 trillion worth of federal expenditures is shirking its responsibility for informing the taxpayers – the funders – about how their money is spent – let alone whether it is effectively and efficiently spent.  This should be big news but advocates and activists have failed to take advantage of it.

    Consequently, the nursing home system remains a closed system that is troubling to most Americans, but they can’t articulate the financial machinations responsible for the lack of investment by corporations in an adequately paid workforce and quality of care.  Absence of openness in a complex social system funded by government inevitably leads to the bigger problem of corruption.

[1] “Skilled Nursing Facilities: CMS Should Improve Accessibility and Reliability of Expenditure Data,” (2016), Washington, D.C. General Accounting Office, Highlights of GAO-16-700.

[2] Ibid

[3] Ibid


[5] GAO, Op. Cit.

A right-wing religious PAC just received a $1.6 billion donation, and the medical-industrial complex will now be a whole lot harder to fight.


Dave Kingsley

Leonard Leo and the Marble Freedom Trust

As head of the Federalist Society, Leonard Leo has had a major role in picking Catholic right-wing Supreme Court justices such as Alito, Roberts, Kavanaugh, and Barrett.  Leo is himself a fanatic, right-wing, Catholic who has no respect for the separation of church and state.  This brand of Catholicism works well with the Christian Nationalist Movement[1] that cuts across most fanatical, fundamentalist, Protestant sects.  

Although the Federalist Society is an organization for the promotion of legal conservatism and includes a variety of far-right believers in a sort of faux libertarianism and assorted other rightwing philosophies, Leo has locked in the Notre Dame law school theocrats as a powerhouse in the grooming and promotion of suitable candidates for future government legal positions and jurists.

Barre Seid, a Chicago industrialist, and ardent libertarian, has donated his entire company – Tripp Lite – to the Marble Freedom Trust, a 501(c)(4) political entity controlled by Leonard Leo.  The Marble Freedom Trust sold the company to the Eaton Corporation for $1.6 billion. This intersection of radical, libertarian, industrialists and the assortment of theocratic movements does not bode well for those of us who are working to deindustrialize healthcare, and other government functions.  The religious right shares many values of super-rich, self-proclaimed libertarians such as the Koch brothers. They believe that wealthy industrialists are godly insofar as they either share or are willing to tolerate the Christian Nationalist value system.

History has taught us that major religious institutions and industrialists are willing to accommodate regimes and politicians that serve their interests no matter how corrupt, anti-democratic, and debasing to the public interest.  The Supreme Court’s decision in Citizens United has already placed corporate political activities in a protective bubble.  We can look for corporations threatened with movements for reform to look to the current lopsided court and politicians on the make to protect their interests.

Therefore, Marble Freedom Trust money will be directed toward politicians and court actions that place property over people, profit over health, capital over labor, and the super-rich over the broad mass of citizens.  This will make changing a life-shorting, inhumane nursing home system far more difficult.  Gouging the public for life-saving medications and denial of medical care to the uninsured will be difficult to end. Let’s face it, we cannot ignore politics in our quest for social justice. 

[1] Christian Nationalism has been studied and reported on by journalist Katherine Stewart.  In her book, The Power Worshippers, she discusses this movement’s belief that the U.S. is a Christian Nation, and that the U.S. should be ruled in accordance with what they consider “Christian values.”  The values they endorse include are anti-gay, anti-democratic, pro-super wealthy, and freedom from government, except when they want to leverage government for imposing their radical beliefs on the rest of society.

What Has Reaganomics Wrought?


Dave Kingsley

“In the Age of Show Business, Public Discourse Has Become Dangerous Nonsense” Neil Postman in Amusing Ourselves to Death

Shareholder Value is the Only Value:  Even the Taxpayer Funded
Life & Death Care in the Healthcare System Has been Reduced to a Matter of
Return on Investment

Welltower, Inc. – one of the major players in the senior living industry – states in its annual report to the Securities and Exchange Commission that the company’s primary goal is to “protect and enhance shareholder value.”  Although Welltower is a dominant force in the taxpayer funded, skilled nursing and long-term care system, nothing is mentioned in company financial reports about a duty to provide ethical medical care to patients.

I consider these nursing home corporations to be no less evil than corporations in the fossil fuel industry, tobacco industry, and the assault weapons industry.  Like big oil, big tobacco, and big firearms, they value people only as consumers with little to no human worth other than parting with their money for the benefit of investors.

Unlike the tobacco, fossil fuel, and gun industries, nursing home corporations earning extraordinary returns from taxpayer funded medical care are excused for their pervasive patient neglect and abuse by carefully selected members – often naïve academics or industry shills – of various commissions (e.g., the recent National Academy of Sciences and the COVID-related Mitre Corporation Commissions).  Without any empirical, scientific, justification, the industry’s propagandistic claims about skimpy Medicaid reimbursement are taken at face value in the media and generally by the public.  The industry has a richly funded a very effective PR machine.

Unquestioned misinformation – whether intentional or unintentional – is creating a crisis in American governance and the well-being of residents.  The anti-vax, anti-science, assault on the public health system during this era of COVID has long been in the making.  What has become known as proofiness (or truthiness) has polluted public discourse.  I have spent untold hours collecting, organizing and analyzing corporate financial reports submitted by nursing home corporations to state and federal agencies.  Much of it is fraudulent, much of it is financial machination, and much of it is laughably ridiculous, but hardly any of it is seriously questioned. So, deadly conditions in nursing homes continue unabated.

“Nihilism, the devaluation of the highest values of Western culture.”  Ashley Woodward in Understanding Nietzscheanism

Ronald Reagan Propelled a Destructive Economic & Social Philosophy Forward Through Government Policy:  Trumpism is the Apotheosis of Reaganomics

The previous post by Kent Comfort chronicles the economic revolution that commenced with the Reagan Administration. This post addresses the values wrought by the economic superstructure described by Kent.  A deep dive into philosophical movements that seeped into the American zeitgeist along with Friedman/University of Chicago radical free market nonsense is beyond the purview of this post.  Suffice it to say that Ayn Rand’s philosophy of selfishness, dog-eat-dog capitalism, and Nietzschean ubermensch (John Gault) seeped far deeper into the American zeitgeist than is readily apparent to most observers.  Along with the Randian virtue of selfishness, the nihilism and rejection of Enlightenment values of the postmodernist philosophical movement became de rigueur among intelligentsia – eventually on the right of American politics.

The changes we’ve seen entrenched in U.S. culture over the past 40 or more years can be characterized as the triumph of self-interest over public interest and community, the prevalence of wealth and power over equality, and the weakening of science engendered by disregard of and disrespect for reason and objectivity.  We are in a post-truth age characterized by deceit, manipulation, and cheating without accountability.  Any claim based on pseudoscience is deemed legitimate – especially if it is legitimated by journalists, politicians, and influential voices in academia.

In the winner take all, survival of the fittest, milieu, it is OK to spout falsehoods and engage in practices that would have been otherwise unethical and unacceptable in the pre-Reaganomics era.  Lying, cheating, stealing, and preying on the vulnerable and weak can be justified by absolutist beliefs in abstract principles.  In its most extreme form, Reaganomics is conflated with Christian fanaticism and right-wing, proto-fascist political movements.  Furthermore, extreme principles of the movement include total deregulation and dismantlement of the administrative state except insofar as it can further a free-wheeling corporate state.

In post-truth America, shareholder value as the highest value of business enterprise, doesn’t need to be justified scientifically as beneficial to the American people in general.  Universal human rights of equality and fairness handed down to us from the Enlightenment have been devalued while the powerful and wealthy leverage their power to degrade democratic processes and direct more and more economic resources from the middle- and low-income classes to themselves.  In the long run, we will see an increasing amount of tragedy and farce detrimental to the future of the planet and all living things.


The RFW Debacle


Kent Comfort

How Ronald Reagan, Milton Friedman and Jack Welch combined to misalign American Capitalism and the Economy

“In the beginning…”, there was Ronald Reagan, Milton Friedman, and Jack Welch. Or at least there are too many people who would like to think that they started a positive economic revolution. We have been living with the damage ever since.

Reagan was a convenient fool and puppet, Friedman was a misinterpreted false prophet, and Welch was just a crook. There you have it, three sacred cows butchered in one sentence!

Each of these men are now deceased, of course, but the legacy of the damage they caused lives on and on.

Reagan was a patsy for the deregulation crowd and that lead to immeasurable loss of many services for the commons. Airlines and railroads are two important examples of industries that no longer serve the public good beyond the extent to which they are forced to. They have been free to strip away humanitarian services and create mini monopolies. A mini monopoly is one which controls specific segments or geographical regions of the markets they serve with the advantage of not having to worry about competitors entering their space. Another prime example of this is the cable TV industry. Your zip code dictates who you have available for your household.

Friedman preached, do anything you want, buyer beware! He included a safety valve in his self-proclaimed predilections that everyone fails to mention if they even knew about it. He realized that many of his ideas contained considerable risk to American society. To protect those members of society who were not equipped to enter the business scrum, he advocated for a version of what we today call UBI, or Universal Basic Income. But his intentions were not necessarily noble. Rather, if the masses could count on some level of economic safety net, the business bandits could go about the task of creating metaphoric strip pits anywhere and everywhere they desired for their personal gain.

Welch rose to the top of a corporate mountain, namely General Electric, and drove it upside down in the ditch while trying to reinvent ancient accounting principles, and pile up a strange combination of acquisitions to create the impression of rapid growth. He ran for the hills just before the consequences caught up with him. For greater details about this travesty, check out a recent book titled “The Man Who Broke American Capitalism” by David Gelles. This might be the best biography about Welch ever written.

The ”everyone else is doing it” momentum took over for the following decades leading up to present time. Welch declared that American business only had one obligation. That was to serve the shareholders. It could be said that because this view became the norm, the words shareholder and stakeholder became no longer interchangeable. The American capitalism model damage is continuing unabated to this day. It does not matter which of the two political party monopolies are in the majority, neither has been willing to give up the largess they collect and instead focus on working to end these rotten practices.

That is an abbreviated overview of how we got to the low point we are at today. Let’s look at the four primary elements of the current capitalist system and how they harm more than help most of us.

They are the formula, the impact, the culture, and the future.

The Formula –

The American business formula can be boiled down to a simple equation: Deliver the least possible value for the highest possible price. If you pause for a moment to think about that statement, it is probably very easy to identify examples you encounter every day.

The skill required by a business entity to benefit from this formula demands that they do not take either end of the equation too far. On the low value end, if that is taken too far, loss of sales results. The same outcome applies to trying to charge too much for the value delivered. The practice becomes one of trying to balance both ends without giving up sales and consequent profits.

Let’s not forget that an important element of this formula has been the suppression of middle-class wages. They have actually gone down when adjusted for inflation, while the executive suite has been raiding the corporate coffers on a level not even imaginable prior to the RFW (Reagan-Friedman-Welch) era.

When one’s master is the shareholder, this is the only perceivable option. If a business is not beholden to masters who would dump their shares in a blink if they do not think it is making enough money, it can instead focus on delivering as much value as possible for the lowest price possible to earn a sufficient profit to sustain the business. That is truly possible and it is more typical of the way business was done before the advent of the RFW era.

A successful business could build a great reputation and be rewarded with repeat business from a satisfied customer. The profits from such high operating integrity could be reinvested both inside and outside the business to grow owner wealth over time. The quarterly report was never a necessity or useful tool.

The Impact –

The long-term impact of the above-described formula has been analogous to the well-known aphorism of the frog sitting calmly in the bottom of a pot of slow boiling water. Many would agree to the fact that the water is boiling today.

What is at the root of the impact? There has been a continuously growing gap between the value of a service and commodity and the escalating prices for them. Consider the “Made in” label on nearly any item in your house. “USA” is nearly non-existent. In fact, it is a selling point to proclaim a product as made domestically today because it is so uncommon.

Of course, the initial benefit to the product originator has been marginally reduced manufacturing costs. America has endeavored to impose regulations on child labor and other forms of involuntary and exploitative servitude that corporations have a history of not hesitating to deploy if there are no barriers. The amoral culture and policies of major corporations give leeway to these practices in the name of growing their profits for the Welchian philosophy of shareholder first no matter what. And China apparently does not aggressively enforce even the most lenient policies they proclaim regarding inhuman workplace conditions. American corporations do not interfere with Chinese labor practices and economic practices. The American people who consume the output of Chinese factories enjoy the perceived low out of pocket cost and do not question or challenge how or why they benefit from that. That is the nature of slow-boiling pots of water. The short-term benefits cloud the horizon of long-term damage.

Is this practice limited to only the multi-national corporate giants? Unfortunately, the answer is no. Here is a story that has been duplicated nationwide for decades. Yep, it is another slow-boiling pot story. Only this time, it is about a thriving midwestern family-owned multi-generational business that produced a globally popular product that you, the reader very likely have in your toolbox as you read this. If you don’t, then you may not even have a toolbox. This is the Vice Grip story. You have a pair, right?

The invention of this remarkable tool was accomplished by William Peterson in the late 1930’s. The product went through a series of refinements through the World War II years and began achieving popularity initially with farmers following the war. The location of this business was in the small agricultural community of Dewitt, Nebraska. The business grew and thrived under the able management of Dewitt’s son and two grandsons. They were a very generous family who employed and promoted people within the company until they had over 300 souls toiling away to supply a hungry market for a great tool. Community families prospered, sent their children to college, and everything about this saga epitomized the American dream. Until…..

Later generations of the Peterson family chose not to continue working in the business. Going away to college and seeing new horizons has a way of doing that to young people from small towns. So, the company was put on the market for sale, and according to the story it was a quick and easy sale. The new owners decided to close the Dewitt factory and move manufacturing to…wait for it….China! Those 330 employees were suddenly out of work. Multiply that number by and average household of four, and the negative impact to a small community is clear. Dewitt, Nebraska will never been the same.

A superbly handcrafted and high standard tool became a lower grade high volume throwaway tool, and copious profits were piled up consequently. If you were fortunate enough to have in your possession a Dewitt manufactured version of the Vice Grip, you probably still have it and it is still working as designed. If you have the Chinese made version, find and original version to compare it to. It will be clearly different.

This decline in value offset by increase in cost is not limited to your personal toolbox or any other product in your household. Consider your experience today with what is fictionally called customer service.

When you have the misfortune of needing to call your source for service, most often the individual on the other end of the call is offshore, entirely ignorant about the service or product you are having a problem with and trying to search for answers on their computer literally as they speak with you. You are nearly always placed on hold for two or three minutes several times during the call, so the support person to research what you are calling about because they do not know anything.

Most major American corporations who have products or services that require customer support use these offshore call centers. They are drastically cheaper than maintaining a state-side call center. But the damage their reputations incur often necessitate contracting with yet another specialty business. That would be the “reputation management” service.

It is uniquely American that reputation management is a growing industry. Companies are willing to spend millions having their soiled reputations professionally laundered instead of spending those same millions providing a higher quality service or product in the first place. Does that make any sense?

The Culture –

What is the downstream effect of the formula and impact described above? How does it degrade the culture of the nation and people? This is where the most severe damage is realized. Unless one is in a coma, awareness of how much cultural and economic deterioration has been accumulating during the last five decades is being realized and talked about at every tier of our social hierarchy. Virtually no one is content with the national homeostasis that has devolved during this time. Correspondingly, no one has any idea what to do about it. The social and economic deterioration was so gradual and so multi-layered that everyone has just acclimating to it while it has marched through our lives.

Disillusionment and a sense of being violated and cheated has led to a growing distrust in the institutions and commercial sources we believed we could rely on. That trust has eroded to the point that everyone has become more wary of everyone else.

When we feel powerless, fear becomes the primary emotion that guides all decisions. Strength and empowerment never emanate from fear. I would be willing to wager that most of the personal firearms sales today are motivated by little more than fear. Personal firearms are not rational protection from the kinds of fear most of us carry around. They are a symbol or metaphor for the sense of helplessness we feel in our daily environment.

The Future –

What will it bring us? That was a trick question. The better question is what kind of future we are going to bring ourselves. Whether we are individually and collectively proactive, or passive, the future is on the way. And even in passive mode, what comes will be of our making. Inaction is a form of action.

Nothing I have written about so far is unchangeable or irreparable. We made it what it is, and we can make it something else. There has to be a public will, supported by a public awareness that we are the masters of our lives and collective culture. We have been lazy. We have become addicted to the prevailing status quo, even if it is hurting us.

The regression and distrust that so many Americans live within today will have to change because nature is not static. Evolution is still very real. We can hope that history is not our guide or window of what is to come. The reason for that statement is that throughout history, sovereignties that degraded in the manner discerning humans are witnessing ultimately collapsed. Not talking about just a dip that they recovered from. They melted down into a form of dark ages that eventually led to a period of rebirth. The reset button was finally pushed after sufficient decay purged the prevailing policies that led to that downfall. I challenge anyone to find an exception to that. The best anyone will be able to do is recognize varying scales of collapse, not exceptions to collapse itself.

Are we ready to agree yet that the kind of social leadership that brought us to this threshold is not what is needed to lift us out of it?

Are we getting closer to agreeing that political parties have no solutions to the predicaments we live with today?

Can we imagine an electoral purge on a national scale that removes every electee from their perch and replaces them with new blood?

Can we turn a deaf ear to all the tired arguments about why experience matters and we need our incumbents to retain the power they have appropriated?

Can we become more personally engaged at the community level to initiate the paradigm shift that must and will happen even if we do nothing?            

I know I need to become more intimate with each of those questions in my own life, and I hope you will join me. Your comments and thoughts are encouraged and appreciated.

Don’t Believe the Propaganda: The Nursing Home Industry is Doing Very Well – Even in a Down Market


Dave Kingsley

Stocks Have Been Dropping Rapidly Since the End of November – But Not in the Nursing Home Business. Why?

The nursing home industry has a well-funded, highly effective, lobbying-propaganda arm that has been effective in convincing the public that providers are not paid enough to provide decent, medically ethical care. That is a lie. The evidence is overwhelming that the industry’s hardship pleas are merely a propaganda effort at squeezing ever more money out of the taxpayers without providing a correlative improvement in care.

The stock market is one of the many sources of evidence supporting my claim that the nursing home industry is doing just fine during these economic uncertain times. Although the the Dow, S&P, and NASDAQ have dropped precipitously since the end of November, stock prices of the major players in the nursing home industry have held their own or have made major upward swings. For instance, the Ensign Group stock increased by nearly 10% during the same period that the DOW fell 7%, the S&P dropped 10%, and the NASDAQ declined by 17%.

The stability (see discussion of volatility below) and steady upward trend of stock overall in the public-funded long-term care/skilled nursing business suggests that the industry is not subject to the vicissitudes of the overall “market economy.” That is indeed the case because it is an industry that is not part of a market economy. The corporations in the nursing home industry listed on a public exchange are not capitalist enterprises. They are a growing part of the U.S. economy that is a partnership between government and corporations in which corporations have steadily gained the upper hand over government.

The characteristics of the government-corporation partnership – otherwise known as corporatism or statism – is guaranteed revenue, a restricted market, i.e. no competitive market in which prices are negotiated. Nursing home corporations are reimbursed for their costs plus adjustments for inflation. Furthermore, the underlying source of revenue is derived from commercial real estate, i.e., the facilities in which patients are maintained with minimal care.

The power of the industry over its government partner has allowed for financial machinations and accounting maneuvers that hide a significant portion of gains in revenue, operating margins, and, most importantly, cash flow from facilities to parent corporations. States are responsible for auditing cost reports submitted by facilities for the purpose of determining daily Medicare and Medicaid reimbursement rates. The auditing and financial oversight of cost reports are weak – allowing extremely flawed cost reports to pass audit review.

The lucrative nature of commercial real estate with a generous government guarantee of producing revenue plus a stable stream of government funds into medical services have not gone unnoticed by institutional investors such as BlackRock and Vanguard. The overwhelming voting shares in nursing home industry corporations are owned by these asset managers. Hence, pension funds, college endowments, and other large pools of capital have been invested in multi-billion dollar corporations that are setting the trends in long-term/skilled nursing care in the U.S.

Volatility is a Big Deal in the Markets: It Tells Us a Lot About the Past & Future of a Company.

Stocks have been mostly trending down in the past few months due to supply chain crisis, oil price fluctuations, conflict in the Ukraine, inflation hysteria, and uncertainties related to COVID. The market has also been highly volatile, which means stock prices are swinging widely in price. I won’t go into great detail about the technical aspects of volatility. Suffice it to say that a volatility of 1 means that the stock doesn’t move up and down much but a volatility of 0 means it never fluctuates – a theoretical situation that doesn’t happen.

Stock may trend up over time but it will tick down and up on the way up. If it swings widely that suggests that it is far more speculative and traders are buying and selling it at a rather rapid pace. For instance, stocks listed on the NASDAQ with recent IPOs tend to be more volatile because they tend to be risky tech stocks back by venture capitalists willing to take a chance on the next big thing.

Stock of a corporation with a guaranteed market in which competition is restricted and earnings are robust will increase over time with only minor day-to-day fluctuations. That is what is noticeable about the stock in corporations comprising the nursing home industry. Not all of its members have increased their stock price over the past few months, but even the few that have lost ground have not seen the kind of downward swings seen across the board on the Dow, S&P, and NASDAQ.

A “Nursing Home” License is a Valuable Asset: States Are Failing to Leverage Licenses in Securing Reputable Providers & High-Quality Care


Dave Kingsley

What’s A Nursing Home License Worth?

    What is a nursing home license worth to a corporation or group of investors pooling their money to buy facilities?  It’s of enormous value. Without a license granted by a state, nursing home real estate – the primary purpose of an investment in the business – is worthless.  The value of these intangible assets are noted on nursing home corporation balance sheets as “Right-of-Use-Assets.”  For instance, Brookdale Senior Living noted $788 million of “Operating lease right-of-use assets” in 2020 and $1.2 billion in 2019.  The Ensign Group noted $1.0 billion in both 2020 and 2019 on its balance sheet as “Right-of-Use Assets.”

    A limited number of licenses are available, which enhances their value.  We can expect a modest decrease in the number of long-term care facilities and number of beds across the United States.  More emphasis on keeping individuals at home and out of institutions has gained some traction.  Any downward trend in institutionalization of patients on a long-term basis will increase the value of licenses merely because of supply and demand.

State Agencies Responsible for Licensing Are Handing Out Valuable State Assets Without Adequate Expectations of Transparency, Responsibility, & Quality of Services from Recipients

    Although industry lobbyists constantly and consistently claim that providers are struggling financially due to inadequate Medicaid reimbursement, they have never presented objective (audited) financial data to support their hardship pleas.  Conversely, an abundance of evidence is available from required Security & Exchange Commission reports that executives, board members, and major shareholders are being abundantly rewarded.

    It is time for the public to insist that high paid industry lobbyists such as former Governor Mark Parkinson of Kansas either cease their incessant misinformation about the financial hardship of providers or provide audited financial data that contradicts publicly available financial information.  Contrary to the effective, well-funded, industry narrative and political strategy, overwhelming evidence suggests that investors are becoming fabulously rich from land and buildings, the value of which is based mostly on taxpayer funded “poor people’s medicine,” i.e., Medicaid.  A variety of complicated sections of the U.S. tax codes further add to cash flow from government funds into the pockets of investors. Not the least of these tax advantages is depreciation appearing on corporate financial statements (there are many others, but that’s a subject for a future blog post).

    It is my contention that states are not leveraging the value of their licenses on behalf of federal and state taxpayers.  Indeed, over the past few decades, major industries such as real estate, finance, insurance, skilled nursing/long-term care have captured legislatures at the federal and state level through generous political contributions and an army of lobbyists. Therefore, state regulators tend to take a very laisse faire approach to oversight. Due diligence in the issuance of licenses is lax and revocation of licenses for negligent care is rare.

Will Long-term Care Investor Ephram Lahasky Be Granted Licenses to Operate Diversicare Facilities in Kansas? It Is Time for Advocates to Put Legislators, the Governor, and State Agencies on Notice:  We are Watching!

    Diversicare Inc. is one of the rather small number of publicly listed nursing home chains.  For the most part, it is a “failed company” due to poor management.  This corporation was on the brink of bankruptcy until generous federal and state COVID subsidies breathed new life into it.  Entering the COVID pandemic in 2020, the company’s stock was trading at about $1.60.  By Spring of 2021, the stock was trading around $3.50 per share.  A couple of weeks ago, I noticed that Diversicare shares had shot up about 250% in one day.

    An investor by the name of Ephram Lahasky had offered to buy the company for $10.00 per share.  According to media reports, Lahasky has a record of running substandard nursing homes. He is not welcome to buy long-term care facilities in states where his past surfaces.  A Lexis/Nexis search uncovered a host of suspect activities and federal investigations pertaining to Lahasky owned facilities (see for instance, Sean D. Hamill, “Lawsuit: Nursing Home Reported False Data: Owners Also Own Brighton Rehabilitation and Wellness Center In Beaver County,” Pittsburgh Post-Gazette, August 27, 2020 Thursday).

     We must insure that Lahasky is thoroughly vetted by the Kansas Department of Aging & Disability Services before licenses are granted to him for the six Diversicare facilities now licensed to operate in Kansas.  According to the following section of Kansas statutes, it would be illegal for the current licenses to be merely transferred to a new owner of the property:

39-928. Issuance of license, when; inspections and investigations; reports; time license effective; nontransferable; display; contents of license.

Each license shall be issued only for the premises and persons named in the application and shall not be transferable or assignable. It shall be posted in a conspicuous place in the adult care home. If the annual report is not so filed and annual fee is not paid, such license is automatically canceled. Any license granted under the provisions of this act shall state the type of facility for which license is granted, number of residents for which granted, the person or persons to whom granted, the date and such additional information and special limitations as are deemed advisable by the licensing agency.

History: L. 1961, ch. 231, § 6; L. 1972, ch. 171, § 5; L. 1980, ch. 182, § 11; L. 1989, ch. 126, § 1;

Public officials have a fiduciary responsibility to citizens when they award rights to their states’ valuable resources.  A license to operate a long-term care facility infuses more value into real estate than taxpayers realize. Investors benefitting from a state-granted license owe taxpayers quality services equal to the financial rewards they will reap.

WARNING! The Mainstream Media is Writing COVID-related Deaths in U.S. Nursing Homes Out of History.


Dave Kingsley

If you visit your local Barnes & Noble store, you will find three new arrivals chronicling the COVID-19 scourge:

Washington Post journalists Yasmeen Abutaleb & Damian Paletta: Nightmare Scenario:  Inside the Trump Administration’s Response to the Pandemic that Changed History (New York:  HarperCollins).

Freelance writer John Sternfeld (Introduction by New York Times Columnist Timothy Egan): Unprepared: America in the Time of Cornovirus (New York: Bloomsbury Publishing).

New Yorker staff writer Lawrence Wright: Plague Year: America: America in the Time of COVID (New York:  Alfred Knopf).

This post is not a full-fledged review of these books.  I have read them and find them disturbing because of what they don’t say.  I’m warning the “less physically abled” people of America needing skilled nursing and long-term care that they are being disappeared from history.  That puts those people we dehumanize as “frail” and “disabled” out of sight and out of mind, which puts them at great risk.

Authors of these books have ignored the estimated 140 to 200 thousand mostly unnecessary deaths and suffering of patients and their families due to dereliction of the nursing home industry and government regulatory agencies.  Their focus is on Washington, D.C., inside the beltway politics and the Trump Administration’s handling of the pandemic (sans nursing home related issues). 

It is not surprising that Timothy Egan’s introduction to Sternfeld’s book ignores the “nursing home tragedy” altogether.  He has, in the past, demonstrated hostility toward the “elderly.” In an NYT column he claimed that “pill popping seniors” were robbing younger generations.  He was referring to the cost of Medicare, which he failed to recognize is paid for by the beneficiaries through a payroll tax and out of pocket expenses. I remember this column so well because I was in Washington circa 2012 on many occasions lobbying to stop cuts in Medicare and Social Security.  NYT columnists like David Brooks and Timothy Egan were accusing the aging population of selfishness merely because of their audacity to fight for the benefits they had worked hard to earn.

The Silence of Professional and Advocacy Groups is Deafening

COVID-19 resulted in a horrendous failure of care and protection for the institutionalized less abled among us, i.e., those individuals institutionalized in the so-called “nursing home system.”  Not only were government agencies and corporations charged with the care of millions of patients in skilled nursing and long-term care facilities derelict, but professional organizations comprised of physicians, gerontologists, and advocacy groups such as the AARP were reticent and vacuous in speaking out about the preventable mass fatalities occurring in these government-funded and regulated institutions during 2020 – and remain so to this very day.

How elites and paid professionals and the organizations in which they are employed react to the massive loss of life in SKN/LTC facilities will greatly impact the public attitude toward the value of Americans with physical barriers preventing their full independence and participation in society.  Ignoring the unnecessary loss of life in the institutions ostensibly designed for humane care will send a strong signal about what we can expect in the years ahead.

Another Conversation with Charlene Harrington

We welcome back Charlene Harrington for another conversation. In this session, Dr. Harrington updates us on some alarming statistics and related details regarding the impact of Covid in nursing homes throughout America. She informs us that there are currently approximately 3.1 million residents in these facilities, of which 1.3 million became infected. We also learn that Scandinavian countries are thirty years ahead of America with their methods of caring for their elder populations.

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.

The Ensign Group, America’s Biggest Nursing Home Corporation, Had a Banner Year in 2020

The American Health Care Association’s Well-Funded PR Machine Is Promoting a False Narrative.  The Ensign Group’s 10-K Debunks the Industry “Hardship Claim.”

The AHCA – the long-term care industry’s lobbying arm – has a perpetual propaganda machine which incessantly cranks out a hardship narrative.  By operating mostly behind a veil of secrecy, the industry has been able to convince the public and legislators that profitability is so meager that firms are barely making it and, consequently, are on the verge of exiting the business.

Let’s consider the industry’s narrative in the context of what we are learning from publicly listed firms required to file financial statements with the Securities & Exchange Commission (available to the public).   I will begin a series of posts with the consolidated financial statement of The Ensign Group, one of the handful of publicly listed long-term care corporations.  I consider the Ensign Group to be the largest skilled nursing corporation with over 300 stand-alone nursing homes.

Other companies owning and operating skilled nursing facilities have larger annual revenues, but they are Real Estate Investment Trusts with a diverse portfolio in the broader senior housing realm. The Ensign Group owns and operates facilities in buildings it also owns.  For this reason, I’m claiming that it is the “biggest” skilled nursing corporation.

2020: A Banner Year For The Ensign Group

On a February 4th conference call, The Ensign Group reported the following:

  • Earnings per share of $3.06, an increase of 86.6% over the prior year.

  • Revenues of $2.4 billion, an increase of 18% over the prior year.

  • Net income of $174.6 million, an increase of 74.8% over the prior year.  This is “GAAP net income.”  GAAP is Generally Accepted Accounting Principles.  This measure of net income will be significantly lower than non-GAAP measures, a fact with which I don’t need to bother readers.

  • Liquidity, which is of great importance to shareholders, remains strong with $236.6 million in cash and equivalents on hand, and $340 million of available capacity under its line-of-credit facility.

  • The company returned approximately $150 million relief funds provided under the CARES Act.  Given the company’s strong financial condition, it’s interesting that a corporation as large and in solid financial condition would have received these grants in the first instance.

Financial Engineering through Patient Arbitrage

As we unravel the finances of the long-term care industry during the COVID-19 pandemic, we need to access all data pertaining to corporate patient mix.  Furthermore, it’s well-known that patient care reimbursed by Medicare is much higher than reimbursement from Medicaid. Also, premiums are paid for patients with COVID.

 Although there is plenty of evidence that Medicaid is profitable, providers will manipulate their business in favor of Medicare patients.  I call this “patient arbitrage.”  Given that protecting and enhancing shareholder value is the primary objective of long-term care corporations, no one should be surprised by the practice of seeking higher reimbursement patients.

By perusing The Ensign Group financial statements and promotional material, I surmise, reading between the lines, that the pressure on management at each facility to maximize revenue is rather intense. Here is a quote from the February 4th Conference Call:

Port noted that as evidence of the medical communities’ confidence in their local operations’ clinical capabilities, the Company saw a marked improvement in patient volumes, especially with high acuity and skilled patients with a 7.2% and 10.8% increase in Medicare census and 6.2% and 5.7% in managed care census, sequentially from second quarter to third quarter and third quarter to fourth quarter for same store and transitioning portfolio, respectively.

This improvement in our admissions trends not only gives us great confidence that we can continue to perform well as the pandemic stubbornly persists in many of our largest markets, but it also gives us confidence that we are in an excellent position to see occupancies normalize to pre-pandemic levels even while the pandemic continues to impact us and our patients. Because we have been working arm in arm with our hospital and managed care partners during this pandemic to care for both COVID-19 positive and negative patients with complex medical needs, our operations have solidified the critical role they play in the post-acute care continuum as an essential and cost-effective setting for highly complex patients.

Don’t Cry for Long-Term Care Corporations: Demand Accountability!

Most restaurants, movie theatres, and other small businesses in your community could only hope to have the government provided revenue stream as that provided to long-term care corporations throughout 2020 while the COVID scourge killed at least 200,000 people in their care.  As the pandemic is brought under control, it is important to demand answers from our political representatives.  What did providers do for patients and families versus shareholders?  Why were nursing home systems in countries throughout Asia, Australia, New Zealand, and other parts of the world able to keep death in long-term care facilities so much lower than the United States? If our government is not presented with these and other questions along with a demand for answers, patients in nursing homes will remain vulnerable to the next pandemic.