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The articles on this page are from copyright material. They are reproduced here for educational purposes and to stimulate public debate about the provision of health and aged care. I consider this to be "fair use" in the common interest. They should not be reproduced for commercial purposes. The material is selective and I have not included denials and explanations. I am not claiming that all of the allegations are true. The intention is to show the general thrust of corporate practices as well as the nature and extent of the allegations made.

Beverly and Truthfulness


I have simply selected two articles which address Beverly's truthfullness. They should be read in conjunction with Beverly's other responses.

The first article critically examines Beverly's truthfulness. One can only ask whether truth for Beverly consists of anything which is advantageous to the organisation at a particular time. The second article reports the information given to shareholders by Beverly two weeks after the first article was published.


An industry on the brink of the truth?
The Tampa Tribune May 9, 2000, Tuesday, FINAL EDITION

When the state's top health care regulator told the Florida Health Care Association he feared "disintegration" of the nursing home industry, the association turned it into a front-page story in its April newsletter.

Beverly Enterprises, which owns 51 homes in Florida, did the same in its latest statewide publication, produced in Tallahassee. On the glossy front page, readers saw "Special Report: Nursing homes at the brink."

It's part of the industry's heavy push this spring to persuade the Legislature to restrain lawyers who sue nursing homes. The industry says it's being strangled by soaring liability insurance costs on top of severe Medicare cuts.

It continually brings up the fact that about 20 percent of the state's nursing homes are owned by companies in bankruptcy court, implying that lawsuits have pushed them there.

"Under-funding and over-suing have finally taken their toll on the state's 700 nursing homes," Beverly declared in its publication. "Florida officials are bracing for a potential wave of nursing home closures as early as this summer."

But Beverly creates a slightly different impression for stockholders in its recent 1999 Annual Report. Clearly, there's no advantage to scaring this crowd. They don't want to read nursing homes are on the brink of anything, except increased profitability.

BEVERLY OWNS, RUNS or manages 559 nursing homes across the country. The financial problems are nationwide, though Beverly is one of the big companies that's not in bankruptcy.

The annual report calls last year difficult for everyone. But "the causes of this turmoil in our industry are several and complex," writes Chairman David Banks (annual compensation $ 824,696, not including stock options).

First he blames Medicare cuts. Next, large fines from heavy-handed regulators. After that, he points to low unemployment that has increased the cost of hiring and retaining nurses and nursing aides. Finally, he criticizes aggressive lawyers who sue nursing homes, and says the problem is limited to certain markets such as Florida.

There isn't even a hint in the report of massive nursing home closures. In fact, it trumpets: "Promising Opportunities Ahead."

The industry has been severely weakened, Banks writes, but "there are hopeful signs that the worst is over and we once again can focus on what I believe are very promising opportunities later this year and especially into 2001."

The industry's best ally is the steady growth of its "target market," people 85 and older.

AND WHILE BANKS avoids any discussion of possible closures, he highlights something pointedly ignored in the statewide industry publications: Congress restored some Medicare cuts in last year's Balanced Budget Refinement Act.

For Beverly, Banks says, that could mean an additional $ 20 million this year and even more in 2001. Further, some members of Congress believe the law didn't go far enough, and they plan to work on a bill this year to give back more.

So which is it? Nursing homes at the brink or promising opportunities ahead?

Actually, the contradictions go beyond that.

In annual reports and statewide newsletters, industry spokesmen say the financial turmoil and increased liability costs haven't affected patient care. Beverly's Florida newsletter says problems have cut only into "non-mandated services" such as social events, cable television, even some building maintenance.

"These are the little things that make a facility more like a person's home," says an industry spokesman.

So nursing homes providing care to thousands of residents are on the brink of closure, but the future is bright and the quality of patient care is high?

Does this make sense?

Beverly Enterprises holds annual meeting
The Associated Press State & Local Wire May 26, 2000, Friday, AM cycle

Despite conditions that have put three of the nation's top five nursing home companies in or approaching bankruptcy, Beverly Enterprises chief executive officer David Banks said his company is positioned to lead in industry recovery.

He made the comments during the company's annual stockholders meeting Thursday.

Banks discussed industry turmoil that he said has left one of eight nursing home beds operated by a bankrupt provider. Because of sound business practices, Beverly is meeting the challenges of increased labor costs, increased regulation and a new Medicare Prospective Payment System, he said.

By controlling company cash flow, paying down debt and paying off the company's balance sheet, the company avoided problems facing others in the in the nursing home industry, he said.

Beverly's annual report projected a 7 to 9 percent increase in operating earnings for 2000.

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