Labor Shortages in Hospitals & Nursing Homes are Due to Greed. Now the Medical Industrial Complex is Pushing to Lower Standards to Fill Vacant Slots.


Dave Kingsley

Irresponsible Hospital and Nursing Home Corporations Value Shareholders Over Medical Care

    Nursing home corporations and executives have pocketed a fabulous amount of wealth throughout the history of publicly funded long-term and skilled nursing care.  Their business model includes enhanced cash flow through suppression of labor costs.  Therefore, their labor relations have been based on fast food wages, poor working conditions, and high turnover.

    Rather than invest in a highly professional, stable, competent workforce, the industry has pervasively extracted excessive cash for the purpose of protecting and enhancing shareholder value.  Unfortunately, the public is unaware of the lucrative trade in real estate and sophisticated leveraging of tax codes that add to the wealth of high high-net worth individuals and corporations owning and operating nursing home chains.  In addition, rewarded through generous reimbursement from Medicaid and Medicare, most corporations paid high dividends and high executive compensation rather than invest in their employees.

    Acute care workers have been poorly treated also. Owners of hospitals have put their nursing staffs in untenable and abusive working conditions due to their paramount concern with shareholders over ethical medical care.  A colleague forwarded this video to me today – it is worth watching:

The Kansas Legislature is Rushing to Lower Professional Standards in Nursing Home Employment to Accommodate an Industry that Has Failed to Develop a Professional, Stable Workforce

    Kansas House Bill 2477 has sailed through the House without any significant opposition today.  This bill allows operators to skirt training, licensing, and competency standards that some legislators and citizens won through years of hard fighting.

    The current Kansas advocacy community has failed to educate legislators, the public, and the press on the history of industry neglect of their workers while extracting a massive amount of wealth for investors.  There is no excuse for the irresponsibility demonstrated by well-reimbursed nursing home corporations, but they are not being held accountable and it appears that there is no demand that they be held accountable.

    Despite failing their patients and employees, the nursing home industry has had two banner years financially during the COVID pandemic.  Now they will be rewarded again with hardly a murmur from any quarter we should be able to rely on for speaking truth to power.

Leading Age is Teaming Up with the Nursing Home Industry to Put One Over on U.S. Taxpayers

In case you haven’t heard of the “Care for Our Seniors Act”, you need to know that Leading Age, which holds itself out as an advocacy organization for nursing home patients, is teaming up with the American Health Care Association/National Center on Assisted living – the industry lobbying organization – to pass this proposed legislation. Despite a couple of good things in the bill, e.g. 24 hour presence of RN in a facility, minimal stockpile of PPE, and some other minor requirements, the proposed legislation is a sham: an industry maneuver to move past the terrible COVID-19 tragedy and squeeze more funding out of Medicaid.

Essentially, Leading Age is helping sweep the industry’s responsibility for the death of 300,000 nursing home patients under the rug. In addition to helping irresponsible providers escape accountability, LA & AHCA/NCAL are pushing for more taxpayer spending on long-term care without any of the needed financial transparency – needed by taxpayers if they are to find out how their money is being spent and how much is being drained out for excessive enhancement of shareholder value.

None of the real advocates I know would be opposed to spending what it takes to make the long-term care system humane and conducive to the well-being of patients. The Care for Our Seniors Act is a slight tweak at best. More likely, it will result in more shortened lives because it will not change the overall quality of care in America’s nursing homes.

Mark Parkinson, CEO of AHCA/NCAL is pushing the legislation by making incessant claims that the industry is in dire financial straits. That is false. His press releases include frames such as heroic and valiant efforts of providers in the face of financial hardship. Parkinson has been claiming that industry revenue will decline by $95 billion over two 2020 and 2021. He has presented no evidence to support that claim, because there is none. The truth is this: long-term care, as an industry, is so heavily subsidized by federal and state governments that it took no real hit in 2020. Providers have landed on their feet as the COVID pandemic is brought under control and will move ahead and continue to drain an excess amount of funds out of care into the pockets of investors.

It is important for advocates to force the long-term care industry to reveal its financial information. We can see the financial statements of publicly listed companies. A review of major public corporations in the long-term care industry reveals something far different than what Parkinson is putting out. The table below is just the beginning of our examination of annual 10-K reports submitted to the SEC.


Dave Kingsley