You may have never heard of Centene Corporation. But we need to talk about this company which derives most of its revenue from Medicaid – medical care for the poor. With revenue of $111 billion in 2020, it is 24th on the Fortune 500 ranking of corporations (by size of revenues). CEO Michael Neidorff earned $25 million last year – among the five or six highest paid executives in corporate America. Not bad for “welfare medicine.”
Compensation for the top four Centene executives and the board of directors totaled $64 million in 2020. The board includes former congressmen Tommy Thompson (also former head of HHS) and Richard Gephardt. Two very powerful former members of congress.
So, what exactly does this company do for Medicaid? It is known as a “managed care organization” or MCO. The idea underlying the MCO concept is that private, for-profit corporations can do a better and more economical job of managing government funded medical care than government employees. Evidence overwhelmingly points in the other direction but the myth nevertheless persists.
Humana, Cigna, and other corporations have jumped into the MCO business. Let’s face it, the $600 billion+ Medicaid budget has opened opportunities for corporations to rake off untold billions for wealthy investors, executives, and board members, while poor people in states that have expanded Medicaid are humiliated through character tests such as proof they aren’t taking drugs, or too lazy to look for a job. Poor people in Arkansas for instance are facing administrative road blocks and state bureaucracies that see their role as keeping people from receiving benefits.
I’m certain that wealthy executives and investors are enjoying their concierge medicine while poor people can’t get treatment for an abscessed tooth, screening for cancer, diabetes, or medical care that most of us take for granted. This is what the Democrats and liberals need to be screaming about – not means testing and making people prove they are worthy of medicine taken for granted by every citizen in most affluent countries. No doubt, progressives in the U.S. House of Representatives are doing just that. However, silence on this issue from most senators and congresspersons on the Democratic side of aisle is deafening. Forget the now cruel Republican Party. There is no hope there.
Democrats Have Both House of Congress & A President’s Proposed Budget We Badly Need: And They Are Blowing It!
Last night I heard an interview with Texas Congressman Henry Cuellar – a Democrat – in which he said that he’s insisting on “means testing” for eligibility in President Biden’s proposed medical care and other programs benefitting ordinary Americans. I’ve heard Senators Manchin and Sinema say the same thing. In other words, people needing child care, medical care, and home based care must prove they are worthy of receiving government assistance to see a doctor, have a place for their child while they work, or need assistance to stay in their home and out of a nursing home.
If past is prologue, this means that American citizens in many states badly needing these humane programs must suffer the humiliation of proving that they are not taking drugs, looking for work if they are unemployed, and too poor to buy these services on their own. This is an anti-worker, anti-people attitude that Democrats need to lose.
As someone who spends a lot of my waking hours researching finances of corporations benefitting from privatized, taxpayer funded, medical programs, I can say with certainty that corporate executives and investors are becoming fabulously wealthy by diverting an excessive amount of Medicare and Medicaid revenue into family and individual trusts for the purpose of avoiding taxes. They undergo no universal character test and yet fraud committed by low and middle income people pales in comparison to what clever CPAs are able scam out of the system on behalf of their high net worth clients.
It is interesting that so many Democrats think that spending a piddly few trillion on its non-rich citizens is excessive in a nation with a $25 trillion economy and a federal budget providing trillions in tax benefits to its wealthiest citizens. In a government funded, privatized health care system, corporations and wealthy investors and their families are able to capture trillions they don’t deserve through dark money and an ability to fund political campaigns.
If conservative Democrats think that catering to the wealthy and demeaning the wage/salary workers of this country is a formula for success, they are delusional. Furthermore, they are weakening a president with a program crucial for staving off crises the likes of which we can’t imagine. This country, this economy, this planet cannot sustain the perverse, toxic, corrupt form of economics and politics exhibited by medical care, agriculture, finance, real estate, energy, and other industrial sectors – it is not capitalism, rather it is a corrupt, debauched economic system in which government and businesses collude at the expense of the public.
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.
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.
This is a true account of an actual incident. The names have been changed because the reader has no reason to know who they actually are.
Paul and Rhonda Martin were involved in a bad auto accident several years ago that resulted in Rhonda being transported by ambulance to a regional hospital emergency room, followed by an overnight stay for “observation. Rhonda was quickly examined for any sign of injury that may need immediate attention or treatment. Nothing serious was determined.
Rhonda was released at noon the next day. Other than the muscle aches and pains that would be expected from such an incident, she had no new complaints and was very ready to be dismissed so she could return home.
Because this was an auto related incident, the medical coverage that was part of the auto insurance policy was the source of responsibility for all charges related to medical care. Paul and Rhonda had sufficiently high limits on their policy to easily cover all expenses. No out of pocket payment was required. That’s the end of this story, right? That would be wrong.
When the bills started coming in the mail, that Sunday afternoon outing ending in a vehicle crash generated nearly $40,000 in expenses and revenue for all parties involved with providing care to Rhonda. The hospital ER visit and overnight stay alone totaled just over $35,000. And there was no treatment or procedures performed, no medications prescribed, and only dinner and breakfast were provided in the hospital room. And Rhonda stated that they were not that delicious!
When Paul reviewed the hospital statement, he was alarmed at some of the items listed and their charges. One charge in particular stood out as a very likely error. It was over $11,000 for a neurologist. Rhonda was not examined by any neurologist. The closest they came to contact with medical personnel was a brief visit by an intern in training and a couple of nurses.
Paul called the hospital business office to clear up the mistake. The clerk initially agreed with Paul that the statement needed closer scrutiny and verification of charges. Paul received a call the next day, and here is what he was told.
“The $11,000 charge is correct. This is due to the fact that there was a neurologist on site, and if Rhonda had needed that level of care it was present. The charge is for the presence of this level of care if needed. And that is standard policy.” Hence, the hospital insisted that the charge was not a mistake at all!
Even though the Martins considered such a response to be alarming, and even unethical in their view, there was no financial impact on them because if it. Paul even called the auto insurance company and they brushed it off as inconsequential and assured Paul there was no reason to be concerned. They would pay the bill as presented and that would be the end of the story. But here again, that would also be wrong. Fortunately for both Paul and Rhonda, the injuries never amounted to anything more than a few aches and pains that were just a memory three weeks later.
A little over two years later, the Martins received a letter in the mail informing them that a class action lawsuit had been filed against the hospital for excessive and questionable charges to clients. They were invited to join the suit as plaintiffs by filling out an enclosed form and returning it by a stated deadline date. They were surprised by this turn of events, and promptly completed the form and mailed it back in the enclosed envelope. Approximately six months later, they received an unremarkable looking postcard that referenced the class action status and required a signature and return. It was so innocuous in appearance that it would have been very easy to overlook and toss in the trash.
The next communication regarding the lawsuit was a letter announcing that the case was successfully completed, and a substantial judgement had been won on behalf of the plaintiff group. After all matters were settled, payments would be disbursed to all plaintiff clients in the near future. No dollar amounts were disclosed in the letter.
Enough time elapsed after that communication that the Martins almost forgot anything was still in process. And then nearly a year later, after they had just returned from a trip, they sifted through the pile of mail that had accumulated during their absence. There was, once again an innocuous looking envelope with no revealing identification visible. It was cleverly presented to look like typical junk mail containing advertisements. Paul and Rhonda have always been diligent about opening all their mail. And this time it really paid off. Enclosed was a check for their portion of the settlement, amounting to over $20,000! And that is almost the end of the story!
Many questions arise from the facts presented here. For example:
Why did the hospital think they could get by with assessing such outrageous charges for essentially no services of consequence provided?
Why do auto insurance companies accept these excessive charges without raising any questions on behalf of their clients?
Is it correct to assume that auto insurance rates are much higher than they should or to be because of their lack of prudence?
How many people who received an invitation to join the class action suit may have been inclined to just toss the letter?
Even more disturbing, how many people may have thought the envelope containing the check was junk mail and tossed it?
Has it become standard practice in the American medical industrial complex that a common solution for adjusting costs includes class action lawsuits?
This is a very brief list for what could easily become a very long list of questions about how broken the American medical service delivery process truly is. The final question might be is there anything that can be done about it in our present sociopolitical environment?
In the previous post, my colleague Kent Comfort presented a case study pertaining to the disappearance of middle-class wealth into the Medical-Financial-Industrial complex black hole. Even frugal, hardworking individuals who believe they have saved enough for retirement often find their assets depleted quickly due to high-cost, industrial medicine. In this and future posts, we will be explaining how wealth is being maldistributed in the United States and how the government-funded industrial-medical system is helping to drive wealth from the bottom 90% to the top 1%.
The shift in wealth and the influence of U.S. medicine on the flow of assets from the lower socio-economic classes to the wealthiest class is a threat to the economic system and socio-cultural stability. According to the PEW Research Foundation, “The wealth divide among upper-income families and middle- and lower-income families is sharp and rising (https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality).
Since the 2008 economic crash, most of the growth in U.S. family/individual net wealth has gone to the upper 5 percent. The share of U.S. wealth owned by the bottom 90 percent of the population fell from 33 percent to 23 percent. Wealth of the top 1% increased from 30 to 40 percent (https://equitablegrowth.org/the-distribution-of-wealth-in-the-united-states-and-implications-for-a-net-worth-tax/). This macroeconomic factor not only an economic injustice, it is a threat to the U.S. capitalistic system and democracy.
You pay taxes, premiums, and out of pocket expenses to fund large reimbursements to insurers, providers, and vendors, i.e., the insurance, hospital, medical device, pharmaceutical, nursing home, and other ancillary medical services industries. And yet, health care in the United States can bankrupt you. Indeed, many people have been bankrupted through exorbitant hospital and nursing home costs.
If the money you would like to leave to your heirs disappears in the U.S. industrial medical system, you would probably like to know where it goes. It doesn’t go back to the Medicare, Medicaid, Obamacare, and VA programs ostensibly paying for your treatment. Those programs are replenished through federal and state taxes – with the heaviest burden falling on the middle and lower classes.
So where, other than treatment, does all that money you pay in taxes and spend out of pocket for health care go? The simple answer is, it goes to shareholders in one form or other. In the 1970s and 80s, the country decided that private enterprise, operating in a “free market,” would be the most efficient and effective medical care delivery system. What we got was an inefficient, ineffective, corrupt, and far too expensive industrial medicine system that funnels your hard-earned assets into the pockets of high-net-worth individuals and ultra-rich individuals and families.
From Your Family to Their Family: How Laws Have Been Engineered to Keep Upper Income Wealth Growing While Everyone Else’s Continues to Shrink
Wealthy individuals despise two things: taxes and inflation. In fact, Leona Helmsley was jailed for telling an ugly truth: “We don’t pay taxes, the little people pay taxes.” By little people, she meant most of us who are not rich. Hence, the wealthy purchase politicians that protect their wealth from inflation and taxes – “purchased politicians” include practically all elected legislators in both parties.
Shareholders in the industrial medical system tend to be high-net-worth individuals ($30 million or more in assets) or ultra-rich families worth hundreds of millions and billions. Inordinately complex federal and state tax laws have complexified corporate and individual finances, which works to the advantage of owners and shareholders. For instance, throughout the past few decades, the state of South Dakota has amended its trust laws and has become a haven for wealthy individuals and families seeking trust laws that protect their wealth from inheritance and other forms of taxation.
It future posts, we will be taking a deeper dive into how Medicaid and Medicare funds are fueling the flow of wealth up the SES ladder. For instance, more of those funds are flowing into family trusts than people realize. In fact, the amount of nursing home ownership by family trusts is extensive and unnoticed by the public. We will expose which chains are funneling a considerable amount of revenue into family and individual trusts.
Mary Beacher has just retired after four decades of working for a large regional printing company as a type setter. She went to work for this company two months after graduating from high school. It was the best employer in her town, and she counted her lucky stars that she was able to secure a job there. And she worked hard to be a dependable model employee.
When she first started working for the company, they had an employee pension plan that the company paid into on behalf of all workers. In the 1980s, that pension plan converted into a 401k account for each individual employee, with their pension accruals transferring over to this new financial instrument. Mary did not understand the nuances of this. She just trusted her employer to look out for her retirement nest egg when she would reach that time. Mary would receive a statement annually that showed the value of her personal retirement fund. And her excitement grew every year after about 30 years had passed, because the amount it had grown was very impressive to her.
When retirement day finally came, Mary learned she had just over $500,000 waiting for her to fund her way of life. She had always made a very modest salary, and she was not a financial expert in any way, so this seemed like more money than she could ever imagine she would need to support her modest lifestyle. She had no plans for moving away from the small community she had always lived in. Almost everyone that mattered to her lived there. Where would she go?
Three years into her new leisurely life, Mary had the misfortune of experiencing some serious health problems. Since she lived alone and her only daughter lived far away with her own family, Mary did not have any family close by to provide care and support, and she was not able to look after herself because of her ailment. Her doctor recommended she look into skilled nursing care at a local nursing home that was owned by a national chain. Her doctor’s reasoning was that since the facility was owned by a huge company, it must be safe. He had heard occasional complaints from families of residents, but nothing that alarmed him. As elderly folks are commonly inclined, she took her doctor’s advice and allowed herself to become a resident, hopefully for only a short while until her health improved and she could go back home.
Mary’s health did not improve. Some would say the primary reason for this was the environment she was in was depressing and she felt like no one was really watching out for her or cared about her. And sadly, she was more right than wrong about this feeling.
The biggest shock came when she learned that the monthly cost of her staying in this facility was over $10,000. She no longer had health insurance from her employer after she retired. She was enrolled with Medicare, but she was not eligible for coverage from that source because her case was not about rehabilitation. She was a skilled nursing client. She discovered she would have to foot the bill for her care on her own until all her funds were exhausted. Then she would qualify for Medicaid in her state because she could claim to be in a state of poverty at that point.
And that is the story about how the Mary Beachers all over America have their entire personal wealth extracted through health industry policies, all of which are legal. Mary’s personal wealth did not go into government accounts. It went into the accounts of the large, very wealthy corporations that own the senior care properties all over the country. And that money then flows to a very small number of wealthy families who own these corporations. Due to very favorable tax laws and policies, these families pay a lower percentage of taxes than Mary did when she was earning her salary at the printing company!
So, let’s recap Mary’s situation. Her hard-earned personal wealth, from four decades of being a trusted and loyal employee at a local printing plant, in a very short time period was transferred entirely to a wealthy family through the legal policies of the American health services system.
And this could happen to you as long as our policies and systems remain as they are today. But that is not the end of the story….
See: The Medical-Financial-Industrial Complex & the Maldistribution of Wealth in the United States by Dr. David Kingsley on this blog site.
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.
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.
Faux Capitalism Fueled by Political Contributions: “The Mother’s Milk of Politics”
Due to his aphorism that “money is the mother’s milk of politics,” most of us involved in California politics in the 1960s and 70s will never forget Jesse Unruh – the powerful leader of the California Assembly at the time. Little could we know to what extent that brutally honest insight would come to dominate American political processes. Nor could we know that Eisenhower’s warning about the military-industrial complex would eventually be relevant to the medical care industry.
The so-called nursing home system is an exemplar of industry patronage dispensed to legislators for the purpose of cash extraction at the expense of quality care – care that all Americans deserve for the taxes they pay. Unfortunately, this reality is not a factor in public political discourse. And it will not be a factor unless advocates and activists do more to press the issue.
The public is fed several myths about the fundamental nature of government funded long-term care in the United States. The myth that providers are operating in a competitive, free market, system drives the propaganda disseminated by trade associations such as the American Health Care Association/National Center for Assisted Living (AHCA/NCAL).
The truth is that licensed providers – both privately held and publicly listed – are entities in a faux-capitalistic system in which prices are guaranteed by federal and state governments while wages and working conditions remain weakly regulated. Price controls are advantageous to the industry. Conversely, the lack of wage controls and employment protections are a disadvantage for workers. Weak federal and state regulation of care is harmful to patients.
At Congressional Hearings, Advocates are Testifying to Legislators Who Receive Money from the Industry: Both Democrats & Republicans
The toxic and perverse form of capitalism represented by the industrial medical system is maintained through a political juggernaut in the form of finance, real estate, hospital, nursing home, and other industrial lobbying groups often mistakenly called the medical-industrial complex. Actually, those of us who advocate for enlightened skilled nursing care, are up against the Finance, Insurance, Real Estate (FIRE)-Industrial Complex.
Wall Street and its affiliated trade associations (e.g., AHCA/NCAL) distribute immense amounts of money to legislators to maintain the highest prices for the least amount of care in skilled nursing facilities. Evidence to support this situation can be found through several sources. For example, the website OpenSecrets (https://www.opensecrets.org/) does an outstanding job of exposing the flow of money through Washington, D.C.
The top recipients of the industry’s patronage are some powerful legislators. The top 10 contributions were dispensed to the following legislators:
Vernon Buchanan (R-Fla)
$10,000
James E Clyburn (D-SC)
$10,000
Ben R Lujan (D-NM)
$10,000
Frank Pallone Jr. (D-NJ)
$10,000
Nancy Pelosi (D-Calif)
$10,000
Peter Roskam (R-Ill)
$10,000
Steve Stivers (R-Ohio)
$10,000
David Young (R-Iowa)
$10,000
Carlos Curbelo (R-Fla)
$8,500
Cathy McMorris Rodgers (R-Wash)
$8,500
Top Recipients of AHCA/NCAL PAC Donations
A $10,000 contribution swings a lot of weight. Both Democrats and Republicans receiving these contributions are among the most powerful members of the U.S. Congress. If you go through the entire list, your idealism regarding some of the more liberal members of the House and Senate might be shaken somewhat.
In the next few posts, I will be sharing more data regarding AHCA/NCAL distribution of money to lobbyists and how the revolving door advantages providers over patients. Staffers and former legislators make much better money on K Street than they can make serving the public.
Professional Conflicts of Interests
As I perused the list of donors to the PAC, I recognized some of the contributors. For instance, I noticed that Medicalodges, a mid-size, closely held, chain in the Midwest, made repeated contributions. I’m familiar with Medicalodges for several reasons. Some of their facilities are located in Kansas – a state in which I have done a considerable amount of LTC ownership research.
The Medicalodges board of directors includes Professor Gayle Doll – head of the Kansas State University Gerontology Program. This inappropriate paid service on a provider board of directors is not the only conflict of interest in which professor Doll is engaged. She is also managing a State of Kansas Grant known as the PEAK program, which dispenses Medicaid bonuses for facilities that can demonstrate development of a “home-like culture.”
She should have no role in evaluating providers for the purpose of Medicaid uplifts. The last time I checked the Kansas Department of Aging & Disability Services (KDADS) website (https://www.kdads.ks.gov/), no adequate evaluation of the PEAK program was available to the public. I called professor Doll about this and was told to speak KDADS. KDADS told me to speak to professor Doll’s office. Nursing home employees I know tell me that the program is a sham. Providers do a little window dressing, make no substantive changes, and still receive rather hefty uplifts on Medicaid reimbursements.
Corruption is Pervasive and Deeply Ingrained in the Faux-Capitalistic Long-Term Caresystem
I have only scratched the surface in connecting some dots related to the corruption rife in the “nursing home” system. With collapse of the medical-moral-ethical underpinnings of our healthcare system, legislators have become corrupted by money and professional conflicts abound due to a developing weltanschauung of self-interest over the public interest.
Many more dots can be connected. We will do that as we “follow the money” in future posts. People who need long-term care are not consumers and the industry will not bother to market to them. The industry’s customers are legislators in federal and state legislatures. That is who they need to sell.
