Category Archives: WELFARE MEDICINE

Capitalism, Electric Vehicles, and Nursing Homes

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By:

Dave Kingsley

Why would any capitalist believe that government funded medical care is amenable to capitalist fundamentals.  It’s nonsensical, even crazy, to think that “free markets,” “competition,” “buyer-seller negotiation” (bargaining over price), and so forth are relevant to medical care.  The results of this delusion – that Medicare and Medicaid can be administered through a “free market” – are: (1) bizarre, costly, and insulting advertising blitzes during Medicare open enrollment, (2) excessive costs due to payouts to shareholders and executives, (3) corrupt politics, which is also driving up costs, (4) dearth of R&D and innovation, and (5) lack of access for many citizens and residents who pay taxes that help fund the system.  I’m amazed that the public tolerates this corrupt, inefficient, unfair, and costly system.

    For a comparison to what is happening in the medical-industrial complex, consider the merging electric vehicle industry – about which I’m thrilled – as an example of real capitalism.  The traditional auto industry failed to move quickly enough toward vehicles that reduce the kind of emissions posing a threat to the future of the human species.  Hence, companies like Tesla have disrupted the staid auto manufacturing business.  Either Ford and GM will move much faster or will shrink into oblivion.  It is exciting to see upstart companies like Rivian (recent IPO & a contract to build delivery vehicles for Amazon), Lucid, and Archimoto challenge big auto and other gas vehicle manufacturers. We have a whole new exciting industry that is designing and building electric vehicles, inducing battery technology, spawning charging station manufacturers (e.g., ChargePoint), and creating well-paying jobs.

    Compare the Medicare-Medicaid funded, tax advantaged, nursing home industry to the rapidly emerging electric vehicle industry. The primordial roots of the industry can be dated to 1950 when the Social Security Act was amended to authorize federal funds for medical care (almshouses were state and local eleemosynary institutions and did not receive federal funds). It wasn’t long before federal lending began to boost a private, for profit, real estate industry – justified by a façade of medical care.  Medical delivery was based on the total institutional, industrial, model because efficiency and economy trumped professional medical standards. In 1965, massive amounts of federal and state dollars began to flow into the industry, which grew into a major sector of the commercial real estate industry and the medical industrial complex.

    There has been no innovation to speak of in the design of facilities and delivery of care in the nursing home industry since 1950.  The same substandard, disgraceful, care delivered in 2021 is essentially the same standard of care that has been delivered for the past 70 years. Conversely, financial innovation since the 1980s has been breathtakingly swift.  The “shareholder as supreme” theory of management and financialization throughout the economic system overtook a publicly funded nursing home system.

    What we now have is trillions of dollars funneled into the medical industrial complex – including the nursing home sector – without a correlative expectation that providers deliver a standard of care that is comparable to the money they are paid.  The nursing home industry operates in collaboration with government in a cartel like arrangement in which prices are guaranteed but labor floats in the low-wage service market.  Entry into the market is restricted and those providers privileged with a license are guaranteed an excessive return.  Owners, executives and their families are becoming fabulously rich in this system while patients suffer from low grade care without concern for professional medical standards. 

There is no disruption and innovation in a system like this.  Hence, it is not a capitalistic system at all.  It is government funded privilege accorded to select groups of shareholders. The tax codes are not incentivizing them to invest in capital and operational improvements. Rather, they have been able to arbitrage tax provisions into enhanced revenue streams without any other purpose than increasing shareholder returns.

Watch For Future Posts:

“The General Welfare Clause in the U.S. Constitution: What Should be Public and What Should be Private in a Democratic Republic with a Capitalist Economic System.”

“Taxpayers & Tax Codes: What Should Residents of the United States Expect for the Money They Spend on Medical Care?”

“Conservative Industrialists Have A Narrative and a Political Strategy. Advocates, Liberals, and Progressive Legislators Do Not.”

“Framing & Narratives Do Not Have to Be Based On Deceits, Falsehoods, and Propaganda. The Truth and Scientific, Objective Data & Information Work Well.”

“Means testing” Is Originally a Racist Idea: Senators Manchin & Sinema May Not Know That

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By

Dave Kingsley

“Means Testing” is a unique U.S. Idea

Like the uniquely barbaric U.S. slavery system and its Jim Crow aftermath, means tested medical care is a unique and racist idea designed to keep African Americans from accessing government funded medical care. President Johnson could not move Medicare through congress without support of segregationist Southern Democrats in the Senate and House. Their concern was that Medicare alone would be expanded to cover younger ages over time and transformed into a universal, single payer.

By forcing Johnson to add means tested, poor peoples medicine, administered by states, former slave states with a residual planter economy and subhuman wages for black workers, could make qualification for eligibility so onerous that African Americans could be kept in subhuman conditions without medical care. State control and the right to opt into the program allowed for arbitrary, racist, administration of the program. Bureaucrats could put obstacles in the path of applicants who would be required to prove they were poor enough and of high enough character to qualify for medical care.

That is the way it works to this very day – especially in states with large African American populations. To qualify for Medicaid in many states, poor people are required to prove they are so poor that even most low wage workers cannot qualify. Due to a glitch in Obamacare (actually due to a Supreme Court decision), people not poor enough to qualify for Medicaid are often too poor to qualify for Obamacare.

As opposed to our enlightened peer countries with advanced economic systems, medical care is not a right in the U.S. Given the horrific medical ethics that implies, one would think that the medical profession would be up in arms and fighting with vigor and intensity to move the U.S. medical system into the 21st Century. But it was the medical profession that originally teamed up with Southern Democrats to kill Harry Truman’s universal, single payer health care system. Overall, the professional medical system hasn’t changed much in that regard.

Conservatives – both Republican and Democrat conservatives – insist on making people prove they are too poor to buy medical care. Rather than provide medical care to people for no other reason than they need medical care, sick people or people who fear that they will not have care if they are sick are put through humiliating rituals and are constantly under threat of being kicked off the program. The subtext of the conservative narrative in that regard is that ordinary, wage earning, taxpaying citizens can’t be trusted – that they want something for nothing from the government or that they are lazy cheats. This stigmatization of poor people for medical purposes doesn’t apply to wealthy executives and investors who really are ripping off the system (see my last post).

I wish media outlets such as MSNBC and CNN would quit referring to Democrats insisting on means testing as “moderates.” The indignities of poor peoples medicine as a special category of care is an extremely conservative, backward, idea that has the foul odor of history.

What are the Causes of Outrageously Expensive U.S. Medical Care? Institutional Racism, Propaganda, & Privatization are Some Primary Causes.

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By:

Dave Kingsley

Why Do Americans Put Up With Their Inferior, Costly, Medical Care System?

My colleague Kent Comfort’s post today is a story to which most Americans can relate – astounding and inexplicable charges for an emergency room visit or a seemingly simple procedure in a hospital or clinic.  Why do the American people put up with the most costly, inefficient, and corrupt medical system among countries with developed economies?

The simple answer is that we have been indoctrinated to believe that we have the best medical care system possible in the best of all possible worlds.  We are even told that we have the best medical care in the world.  The alternative, according to propagandists, is the dreaded socialism – never mind that the British National Health Service is government owned and operated, exceedingly fair to the population, and costs much less than U.S. medical care. Also, over the past few decades, London and the British Iles in general have become engines of global finance and capitalism.  While Margaret Thatcher was on her privatization tear, she made it very clear that she would not touch the NHS.

Propaganda and conditioning of people in nation states are ordinary across the globe.  Governments in advanced industrial nations are sophisticated and effective in selling policies and programs that are not in the public’s best interests. Although the British National Health Service is among the best in the world at a cost of $4,653 per capita compared to the U.S., paying $11,072 and struggling with a wasteful system failing a large part of the population, the ole “socialism is bad” propaganda rears its ugly head at the mention of a national, single payer system. What we are told (and far too many people believe) is that we can’t afford to do better. Apparently, we can only afford to pay more to do worse.

The real historical circumstances leading to the embarrassingly bad U.S. medical care system have nothing to do with “socialism.”

I will make the case that the current industrial medical system in the United States has its roots and initial conditions in Jim Crow, Southern Democrat opposition to health care equality for African Americans that would most certainly occur in a federally administered, single-payer, universal medical care system.  Furthermore, the American Medical Association, Northern Republicans, and Southern Democrats waged a rabid and successful war against President Truman’s single payer plan through a well-financed propaganda campaign.

The AMA would not even recognize the right of African American physicians to practice medicine and excluded them from its all-white, politically reactionary organization.  Furthermore, the AMA was a powerful force in state politics and could exercise considerable control over education and licensure, which are determinate of physician income.  Hence, a white supremacist and powerful group of physicians joined forces with other racist and reactionary forces to stymie Harry Truman’s national health care plan.

Had the Southern Democrats supported President Truman in his quest for a single-payer, universal health care system, it would have made it through congress and be as much a part of the U.S. government and economy as the National Health Service is an integral part of British society.  The Senators and Congressmen from the South were white populists and supportive of New Deal programs for whites such as Social Security (agricultural & domestic workers were excluded), the Hill Burton hospital construction program (hospitals funded under Hill-Burton were allowed to remain segregated well into the 1960s), and other programs that benefitted whites.

Poverty medicine, Medicaid, Exclusion, and Lower Tier Care

Under the leadership of Arkansas Congressman Wilbur Mills, one of the most powerful congressmen in U.S. history, the single payer Medicare system for the elderly was accompanied into law by the means-tested, poverty Medicaid system.  Mills was a bigot and signatory to the Southern Manifesto (signed by all Southern Democrats in congress), which was a protest against Brown v. Board of Education.

As Chairman of the House Ways & Means Committee, Mills maneuvered Medicaid into existence to prevent expansion of Medicare to younger age groups.  Furthermore, the states’ role in Medicaid would allow for harassment, stigmatization, and lower tier medicine, all of which would help keep African Americans in an inferior status in Southern states.

Privatization and the Monetization of Poverty

Poverty is paying off for some of the largest corporations in the United States. Medicaid is a cash cow for providers running for profit hospitals, nursing homes, and medical supply companies.  For instance, the Centene Corporation is in the business of managing Medicaid programs for states.  Centene executives were paid a combined $64 million in 2020.  The company’s CEO was one of the highest paid executives among the Fortune 500 executives.

In the weeks ahead, we will be further making the case that Americans have been conditioned to believe that the health care system they have is the best they can afford and deserve.  That’s false.  We will expose the corporations making excess earnings, paying high dividends, and providing poor care.

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

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By:

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.

Lobbyists for the Nursing Home Industry are Pleading Financial Hardship on Behalf of the Corporations they Represent: Advocates & Activists Need to Debunk that False Narrative

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By

Dave Kingsley

A Government Funded Service that Requires Heart & Soul has been Turned over to Businesses that have no Heart and no Soul

Corporations in the nursing home industry do what corporations do – they make as much money as they can for their shareholders.  Advocates and activists do what caring people do – they fight for patients with heart and soul against corporations that have no heart and no soul. Profit is profit and care is care, and “ne’re the twain shall meet.” 

In this age of little integrity, corporate behavior has little to nothing to do with social responsibility and everything to do with executives’ perceived obligations to their investors/shareholders and themselves.  In that endeavor, they have no qualms about deceiving the public with misinformation about their finances. A number of times I have attended legislative hearings and listened to lobbyists convince legislators that providers’ net income is so low they can barely stay in business.

Providing low quality care and excusing it with a claim of “running on a thin profit margin” is a typical maneuver of long-term care providers. This is a lie and deserves some intense and strong pushback. It is not hard to find evidence to rebut this falsehood.  For instance, it is my opinion that The Ensign Group is the biggest owner and operator of nursing homes in the United States. I’m claiming it is the biggest because unlike the other large operators it owns the 270 properties (at latest count) it operates, whereas companies like Brookdale have sold their facilities to Welltower and other REITs (they manage them on a contract basis).

The Ensign Group is doing quite well – even during the COVID pandemic. The table below displays the company’s income statement, which includes revenue and net income through the 3rd quarter of 2020 compared to the same period of 2019. Revenue has increased from $1.5 billion during the same period in 2019 to $1.8 billion in 2020. The company’s net income (profit) in the third quarter was $43.3 million compared to $27.8 million in the 3rd quarter of 2019. The 2020 year-to-date net income in the 3rd quarter was $125.2 million compared to $84.4 million in 2019.

It is important to note that net income on the income statement is after depreciation, amortization, taxes, and interest. Calculating earnings after these expenses isn’t the current accepted standard for evaluating corporate performance. Earnings before interest, taxes, depreciation and amortization (EBITA), would be much higher than net income and is a better reflection of the company’s financial strength. There is no point in getting into the weeds on this particular point – it is an important point however. Suffice it to say that the financial data we are able to obtain from publicly listed companies suggest that long-term care is an attractive investment.

Senior Housing will be a Vibrant and Appealing Investment Opportunity for at Least the Next Ten Years

The Baby Boom generation began entering retirement age in 2011 and will swell the 65+ population until 2029, when the last year of the 1946 through 1964 birth cohort enters the magic retirement age of 65. Demographers are predicting that the 65+ demographic will reach 80 million. Real estate and finance sectors of the economy have been granted generous tax advantages. Those are the main undertakings of senior housing/long-term care. Furthermore, guaranteed revenue from Medicare and Medicaid and a powerful lobby for keeping regulators at bay or under control will attract investors to this industry.

Don’t take my Word For it, Look at the Trade Publications

Although the movement for community and home based care will continue to intensify, demand for skilled nursing will remain high due to an increasing 80+ population and advancing medical technology. In a recent article in Skilled Nursing News (Skilled Nursing Continues to Outpace Senior Living in Near-Term Investment Outlook, January 21, 2020), Alex Spanko wrote the following:

With a combination of strong federal relief and a seemingly safe place in the wider health care continuum, skilled nursing facilities have repeatedly emerged as bright spots in an otherwise hazy financial outlook for players in the senior housing and care sector.

Fitch Ratings on Tuesday added to that trend in awarding a BBB- rating and stable outlook to unsecured notes issued by National Health Investors (NYSE: NHI), a major publicly traded landlord in the space (https://skillednursingnews.com/2021/01/skilled-nursing-continues-to-outpace-senior-living-in-near-term-investment-outlook/).

Publicly listed corporations in the long-term care business will be reporting their 4th quarter and 2020 annual reports in the next few weeks. We will be compiling essential information for all them and posting it on this blog. Combined, these companies own a significant share of the long-term care industry. If their financial statements don’t support the “hardship pleas” of their lobbyists, then advocates need to ask for evidence of their claims.

DON’T WORRY ABOUT NURSING HOME CORPORATIONS: THEY ARE DOING FINE

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   By Dave Kingsley

Don’t worry about the financial impact of COVID-19 on the nursing home industry.  Corporations paid to provide long-term care appear to be doing well financially.  In this post, I want to begin a discussion of the industry’s and regulators’ failure to protect patients from a scourge they should have known was coming.  Unfortunately, nursing home owners are not being held accountable.  Quite to the contrary, they are being financially rewarded as victims of the pandemic.

    My purpose in this post is to highlight the subsidization of the industry through immediate cash infusions while nursing home personnel have been forced to work in the same low paid jobs without adequate personal protective equipment.  This is an initial post in a series of posts in which I will provide information gleaned from the 2nd quarterly reports of three different types of publicly listed nursing home corporations – privately held corporations’ financial information isn’t available because they are not required to file reports with the SEC.

    If the public thinks providers of nursing home corporations are financially strapped due to the COVID pandemic, they will be dissuaded from that perspective by the 2nd quarterly 10-Q reports filed by a sample of publicly listed corporations. Consider the financial reports of the following representative corporations:

The Ensign Group

    The Ensign Group, a holding company, owns the fifth largest nursing home chain in the United States.  The company was formed in 1999 and, based on SEC filings, has demonstrated a robust growth and strong financial performance.  According to its 2020 2nd Quarter report (10-Q)[1], its earnings of $.78 per share was a 100% increase over the prior year quarter.  Revenues for the quarter were $584.7 million and increase of 18.6% over the prior year quarter.  Net income for the quarter was $43.1 million, an increase of 99% over the prior year quarter.

   Apparently TEG was doing so well, the corporation decided to return $110 million it received from the federal government under the CARES Act[2], which was basically a handout to America’s corporations for keeping them solvent even though nursing home companies had a guaranteed price and ongoing revenue.  Furthermore, they benefitted from the Payroll Protection Program and the HEROES’ Act intended to help companies keep employees paid and enough capital to maintain solvency.  Although, the TEG balance sheet indicates that the company has $210 million in cash and $302 million in accounts receivables, it still took perhaps a 100 million dollars of PPP money and a host of other CMS supplemental payments.

Ventas Real Estate Investment Trust

    Ventas Real Estate Investment Trust (REIT) is illustrative of one of various types of corporations dependent on revenue from skilled nursing facilities.  REIT’s in the nursing home business are a special type of commercial real estate, but they are also a special type of skilled nursing home corporation.  Although they buy and lease facilities, they actually lease to contractors such as Brookdale from whom they often buy facilities and lease them back while also maintaining an interest in and control over operations. Furthermore, REITs have an operational interest in skilled nursing facilities.  Ventas describes its business this way: “We primarily invest in senior housing, research and innovation, and healthcare properties through acquisitions and lease our properties to unaffiliated tenants or operate them through independent third-party managers.”

    According to Ventas’s 10-Q[3], the COVID pandemic has not been financially disastrous due to the injection of funds from the CARES, PPP, and HERO’S acts.

    “In our healthcare triple-net leased properties portfolio, we collected substantially all rent due in the first and second quarters. This cohort of tenants has benefitted from significant government financial support to partially offset the direct financial impact of the COVID-19 pandemic on healthcare providers. Nationally, hospital inpatient admissions and surgeries have rebounded, although still below pre-COVID-19 levels, depending on the particular market.”

Brookdale Senior Living

Brookdale Senior living is the largest operator of senior living properties.  The company has sold most of its real estate. 

During months ended June 30, accepted $33.5 million of cash from CARES Act.  During July 2020 company applied for additional grants Emergency Funds based on 2% of portion of 2018 gross revenue from patient care

Under the CARES Act, the Company has elected to defer payment of the employer portion of social security payroll taxes incurred from March 27, 2020 to December 31, 2020. One-half of such deferral amount will become due on each of December 31, 2021 and December 31, 2022. As of June 30, 2020, the Company has deferred payment of $26.5 million of payroll taxes and presented such amount within other liabilities within the Company’s condensed consolidated balance sheet.[4]

As of June 30, 2020, total liquidity was $600.2 million, consisting of $452.4 million of unrestricted cash and cash equivalents, $109.9 million of marketable securities, and $37.9 million of additional availability on revolving credit facility.

Eric Carlson of Justice in Agency statement

    Eric Carlson, of Justice in Aging served on the so-called “Independent Nursing Home COVID-19 Commission,” and was the only member who refused to endorse the commission report resulting from a series of secret meetings between July and September.  I say good for him!  I say shame on those other members who either fully or partially endorsed a report that allowed the Trump Administration and nursing home corporations escape responsibility for dereliction of their duty to protect nursing home patients during the COVID-19 pandemic.

    Mr. Carlson gave the following reason for his refusal to endorse the report: “With limited exceptions, these recommendations … do not address accountability of nursing homes and their operators.” Having spent a considerable amount of time analyzing the report thus far, I would say that he is correct.

    Not only did CMS use the report to excuse its own inept and failed response to the COVID-19 pandemic, it also ignored failure of the industry and expectations from nursing home corporations in the future.  The Trump Administration failed to hold corporations accountable.  Furthermore, they have been providing generous subsidies through the CARES, PPP, and HEROES Acts passed by congress in March to keep employees paid and businesses from bankruptcy.

[1] https://investor.ensigngroup.net/sec-filings/sec-filing/10-q/0001125376-20-000134

[2] Two major pieces of legislation, the CARES Act, and the HEROES Act, which include cash grants, support for employees, and deferred payroll taxes are responsible for injecting hundreds of millions of dollars into the three corporations featured in this post alone.  The text of the acts can be found at:  https://www.congress.gov/bill/116th-congress/senate-bill/3548/text?q=product+actualizaci%C3%B3n; https://www.congress.gov/bill/116th-congress/house-bill/6800/text.  Detailed information from the income, balance sheet, and cash flow statements of major publicly listed nursing home corporations’ cash and equivalents, earnings, and liquidity indicate a rather strong financial position after several months of a nationwide pandemic.

[3] https://ventasreit.gcs-web.com/static-files/5ea1570e-14fd-45f6-8e31-15237eb49016

[4] https://brookdaleseniorlivinginc.gcs-web.com/static-files/0213cc1d-9228-4f8c-a7d4-273a1943197c

WILBUR MILLS, FOUNDING FATHER OF THE CURRENT NURSING HOME SYSTEM, WAS A WHITE SUPREMACIST AND SEGREGATIONIST

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By Dave Kingsley

     The late Congressman Wilbur Mills, Chairman of the Ways & Means Committee from 1958 to 1974, was arguably one of the most powerful congressmen in the history of the U.S. House of Representatives.  During the 1950s and 60s, Mills guided federal legislation out of which the nursing home system as we know it today was spawned. He was also an ardent segregationist and white supremacist.[i]

    The power of Southern Democrats in guiding the conceptualization and passage of Medicare and Medicaid determines to this very day how citizens will be treated in federal/state funded long-term care. This is too often overlooked in histories of welfare medicine in the United States.[ii]

    In their zeal to protect Jim Crow and plantation capitalism, the one thing that segregationist senators and congressmen fought most ardently against was federal power.  For the immensely powerful Mills and his Southern brethren, preservation of the racial hierarchy of the South was a cri de Coeur. “States’ rights” were synonymous with the right of Southern states to preserve strict apartheid and maintenance of African Americans in subservience and an inferior economic and social status.[iii]

    Sponsorship of the Kerr-Mills Act in 1960 with Senator Kerr of Oklahoma was an early foray for Mills into major long-term care legislation.  This act was also a precursor to Medicaid and, therefore, to welfare medicine in the United States. Several major facets of this initial “poor people’s medical care” was incorporated into Medicaid and have presented disturbing barriers to a fair and just medical system throughout the last six decades.

   The odious feature of “Means testing” in early nursing home related legislation is a significant characteristic of Kerr-Mills. This is a process through which people prove they are poor enough to qualify for government assistance.  Hence, those not poor enough to qualify would need to “spend down” their assets before qualifying for federal/state assistance.

    The concept of the “medically indigent” was introduced into U.S. medical care through Kerr-Mills.  The importance of a stigmatizing medical category – codified into health care law – cannot be underestimated.  Along with state power in and control over Medicaid, recipients are incessantly confronted by bureaucratic barriers and personal indignities that beneficiaries of all other government subsidized medical care avoid.  The United States is the only advanced, industrialized society that places poor people in an inferior medical care status.

    In addition to means testing, state funding with federal matching funds characterized financing of Kerr-Mills.  Southern Democrats could see the handwriting on the wall and maneuvered as much power to the states as possible. Because states do not have the same fiscal resources to fund Medicaid as the federal government, state legislators and bureaucrats treat Medicaid as lower tier medicine.  Funding is lower and medical care is typically inferior.

    The federal government has unlimited resources and the United States has the wealth to fund an alternative system that provides a truly home-like nursing home environment such as the Eden Alternative and Greenhouse models.  However, states’ rights as a philosophical position has not weakened appreciably among conservative states.  Huge federal programs such as Medicare and Social Security represent federal power, which is an anathema to conservatives.

    Furthermore, state power over regulation and state bureaucracies’ propensity for supporting industry opaqueness hampers the public’s perception of how operators and the investors owning them fulfill their obligation. It is much easier for the industry to capture government at the state level and direct the actions of legislators.  Hence, weak federal oversight and the power of trade associations in all 50 states must be attacked by advocates and activists. 

    It is important to include the impact of systemic racism into any plan and narrative for change. The nursing home system as it has evolved cannot be fixed because it’s not broken.  It is working like it was intended to work.[iv]  It is time to demand that all funding and regulation be the responsibility of the federal government.

[i] I have a more expansive discussion of Mill’s influence in the development of the U.S. nursing home system in my chapter, “Implementation of Medicaid-Funded Long-Term Care: The Impact of Prior History on the Development of the Nursing Home Industry,” in Max Skidmore & Biko Koenig (2019) Anti-Poverty Measures in America: Scientism & Other Obstacles.  Washington, D.C.: Westphalia Press.

[ii] Rare exceptions to the failure of social scientists to understand the impact of race on government medical care policy are Jill Quadagno (2005) One Nation: Why the U.S. Has No National Health Insurance. New York:  Oxford University Press; and Gerard Boychuk (2008), National Health Insurance in the United States & Canada.  Washington, D.C.:  Georgetown University Press.  Social science and history that overlooks the fundamental fact that had there been no slavery, no Jim Crow, and no ongoing systemic racism, the U.S. healthcare system would look far different.

[iii] In 1956, Congressman Mills was a signatory to the Southern Manifesto, which was signed by all senators and congressmen from the former states of the traitorous Confederacy.  In the document, the segregationist legislators argued that legally mandated school desegregation, as required by Brown v. Board of Education encroached on the rights of States and of the people.

[iv] I want to thank my colleague and fellow activist/advocate Ester Holzendorf for this conceptualization of systems adversely impacting poor people and racial minorities.