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Reference pages

1996-1999 ..... 2000-June 2001..... 2001-2003
The corporate chains
Sun Healthcare ... Beverly ... Vencor/Kindred ... IHS ... Genesis ...
Mariner ... Extendicare ... NHC ... Centennial ... Guardian
The many extracts 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.

PAGE II (2000-2001)


There are a large number of lengthy reviews describing what has been happening in the "Nursing Home Industry"-- its enormous financial success, its fraud, its meteoric plunge into bankruptcy and most important of all the neglect and misuse of the frail aged in order to fuel corporate profits. I have several thousand and these references are representative. The articles listed on these two page are lengthy and laden with examples describing the financial misjudgement, the fraud, and the poor care given to individuals or by individual facilities.

I have selected broad reviews for this page and have taken extracts which illustrate the broad thrust of the dramatic events and the arguments used. I have not selected extracts describing individual corporations. Separate pages on this site give a description of the major corporate chains and references to individual chains can be found there.

Because of the volume of the material I have divided it into two web pages.

Page I covers the years 1996 to 1999. Click Here to go to PAGE I.
This page continues the story and covers the years 2000 and 2001.

The purpose of the references

This page is designed to give depth to the site, the reviews, and the interpretations. It can be skimmed by those wishing to confirm or challenge the views I have expressed - or learn more. It is chronological rather than subject based and therefore illustrates an unfolding saga. For the serious scholar it provides a selection of references and an indication of the contents. He or she can then decide which articles to access elsewhere.

COMMENT:- Citizens groups allege that it is cozy financial arrangements which cause politicians to remove regulators who do their job and appoint those who are kinder to nursing homes. This is an unstable relationship. When citizens put pressure on politicians their representatives are likely to do a U-turn and pursue the chains. Good publicity is worth its weight in gold.

The Times-Picayune January 9, 2000 Sunday, ORLEANS

Businesses and their interest groups -- from the American Medical Association to Boeing Co. and Sprint Corp. -- spent $697 million in the first six months of 1999 trying to influence Congress and the federal government, a new report says.

The health-care industry spent the most on federal lobbying from January 1999 through June 1999, shelling out $95.5 million. The communications and technology industry ranked second, spending $94.6 million; and finance and insurance ranked third, spending $89.8 million, according to the campaign finance research FECInfo.

Each of these groups had plenty at stake. For example, Beverly Enterprises Inc. and hospitals pushed to erase a cut in Medicare payments, which caused heavy losses and even bankruptcies for some firms.
Hospitals, nursing homes and other providers of care to the elderly won a yearlong multimillion-dollar lobbying battle to get Congress and the Clinton administration to raise Medicare payments. In November, President Clinton signed the $16 billion increase in Medicare legislation after the industry complained that the 1997 balanced-budget law cut their Medicare payments too deeply.

COMMENT:- Industry analysts are not renowned for their common sense - look at what they have been saying for the last 2 years but here is a gem. Care costs money and they can't afford to pay for nurses. Companies are bankrupt and have no money. As a consequence they reassure us that patients and residents should not worry about the sort of care they will get! Because they say it, it must be true!

Another nursing chain goes bankrupt :: Mariner joins Sun Healthcare and Vencor
The Courier-Journal (Louisville, KY.) January 19, 2000

For the third time in four months, a major nursing-home company has filed for Chapter 11 bankruptcy protection.
Mariner, like the other two, cited cuts in Medicare payments as part of its financial troubles.
But does the financial devastation and the restructuring to follow among some of the country's largest nursing-home providers mean trouble for patients and residents as well?

Industry analysts say mostly no.

''This is a Wall Street issue more than a Main Street issue,'' said John Ransom of Raymond James Associates.

''The restructuring itself should not impact the day-today care at nursing homes,'' said Andrew Gitkin of PaineWebber.

''It's more or less, what's the corporate structure going to look like'' and how are the debts going to be handled.
They lost that wager with the enactment of the Balanced Budget Act. Ransom said that ''it just completely eviscerated the . . . Medicare business model'' the companies bet on.

''It just basically shows the risks of carrying a lot of debt,'' Gilkey said, ''particularly in an environment that is very heavily regulated like health care.''

That doesn't apply much to the not-for-profit and government-run nursing homes that make up more than a third of the nursing-home industry, Ransom added. That's because the not-for-profit homes have lower percentages of Medicare patients ''and by and large have not . . . borrowed a lot of money to buy other companies.'' The same goes for smaller independent for-profit companies.


COMMENT:- The federal reports on nursing homes was scathing about poor care and the failure of the states oversight system. In Oklahoma the person in charge of oversight was jailed for taking bribes from nursing home owners.

Problems plague nursing homes Report finds needs are up, staffs are lacking in Maryland
Capital (Annapolis, MD.) January 23, 2000, Sunday

Nursing home residents are sicker, employees are more overworked and the costs are higher than ever _ a dangerous combination that is causing serious problems in care facilities in Anne Arundel County and across the state.

Last month, a state task force on nursing homes issued a dire report on the state of Maryland's nursing home facilities. The task force included nursing home operators, health-care workers, advocates for the elderly and government regulators.
"The quality of care in Maryland nursing homes is in need of immediate government attention," said State Aging Secretary Sue Ward. "A substantial investment of both financial and human resources over the long term will be required to realize changes needed today."
The report found that nursing home residents in Maryland are more disabled and need more assistance than residents in other states. The nursing homes are also larger than the national average and more than half operate for a profit.
But according to a March report from the federal General Accounting Office, Maryland was way behind in responding to complaints, to the point where people were being harmed and investigations weren't taking place for weeks or months.

"The GAO concluded that there were serious deficiencies in public oversight of nursing homes resulting in appalling conditions and lifethreatening situations for residents," the task force reported.
Anne Arundel County long-term care ombudsman Marjorie Richmond makes a point of visiting each county nursing home at least once a month.

What she sees there validates the findings laid out in the report.

"It's a big problem, not just here, not just in Maryland but across the nation," said Ms. Richmond, who also was a member of the task force.
Right now, the most serious and growing problem for the county is the lack of staffing. Two years of a booming economy has led to record levels of unemployment in the county, meaning those who used to do the less skilled work in nursing homes are finding better-paying, less stressful jobs outside the facilities.

Topping it all off, residents are more gravely ill than ever before. People are living longer, acquiring more complex medical conditions and tending to look at nursing homes only when all other options have been explored.
"If we don't fix this system soon, it will be really broken," Ms. Richmond said.
The task force suggested a series of solutions, among them hiring more inspectors and adding to nursing home staff as well as raising the salaries paid to nurses and certified nursing aids.
An additional funding source may be the nursing homes themselves. Since 1995, Maryland has levied more than $ 800,000 in fines against nursing homes. However, less than $ 200,000 has actually been collected, the task force found.

In addition, there is no way for the state to take instant action against a nursing home. They must file the complaint, which is almost always appealed by the facility.

COMMENT:- Remember that earlier report that " Between 1995 and 1998, the buying spree effectively dwindled the number of publicly traded nursing home operators from 28 to 10." Six chains are listed below as bankrupt and Integrated Health Services (IHS) must be added making 7. Genesis will shortly go bankrupt making 8. Three of the 6 listed below are privately owned companies. That leaves 5 out of the 10 large publicly traded companies in bankruptcy.

Health care companies say federal cuts hurt industry; Government report shifts blame from changes in Medicare;
THE BALTIMORE SUN February 3, 2000, Thursday ,FINAL

The changes in Medicare that Integrated Health Services Inc. blames for its troubles have hurt other nursing home companies too, analysts said.

In the past six months alone, six other national health care providers filed for bankruptcy protection -- a list that includes Vencor Inc., Sun Healthcare Group Inc., Mariner Post-Acute Network Inc., Lenox Health Care Inc., Frontier Group Inc. and Newcare Health.

"We've just bankrupted an entire industry when that industry was about to undergo more growth than it's ever had," said Charles Newhall, a venture capitalist and former member of Integrated Health Services' board. "It's going to go down as one of the greatest mistakes."

Wall Street analysts agree, saying the changes precipitated Integrated Health's bankruptcy.

But running contrary to that assessment is a report by the General Accounting Office released in December. That report says Medicare cuts were only one of several factors that caused the financial problems of nursing home companies such as Albuquerque, N.M.-based Sun Healthcare Group and Louisville, Ky.-based Vencor.
But the GAO report said that while the new reimbursement system may be paying too little for the care of some high-cost patients, it may be paying too much for others.

Addressing the troubles of the industry, the GAO said "the losses reported by the companies stem in large part" from high capital-related costs, reduced demand for nursing home support services such as rehabilitation and "substantial nonrecurring expenses and write-offs."

The nursing home industry disputes the findings of the GAO, saying the agency lacked the data, the focus and the ability to do an impartial study. "
Through U.S. Strategies Corp., the industry took issue with what it called "particularly outrageous GAO statements."
The Republican-controlled Congress and the White House last November moved to restore some of the Medicare spending cuts, increasing Medicare payments to nursing homes by $2.1 billion over five years.

COMMENT:- On the one side we have citizens groups and federal government investigations claiming that oversight has been lax and that penalties have not been enforced. On the other we have corporations and their lobbyists claiming that the oversight is too stringent and counterproductive. The fines take money away from care. The next article puts the corporate argument.

Note that the author has carefully picked a not for profit to make its points. Mostly it is corporate homes which are closed and they are closed after multiple inspections have shown serious and life threatening deficiencies. Citizens in California can produce thousands of death certificates to refute the arguments.

Quality push is costing residents, critics say
St. Petersburg Times February 07, 2000, Monday

An agency is cutting off facilities that don't pass inspection. But some say many problems are relatively minor compared with the human toll.
As frail as they are, all (residents in a substandard home) could be uprooted if the U.S. Health Care Financing Administration gets its way. Under orders from the White House and Congress to crack down on bad nursing homes, the federal agency that oversees Medicare and Medicaid has been trying to shut down this non-profit facility in inner-city Flint.

But what does HCFA - - - say threatens these people's lives? Among the charges: Food not spicy enough. Rust on a kitchen stand.

"The thing is crazy," said Glenn Fosdick, president and CEO of Hurley Medical Center, the city-owned hospital that runs the nursing home.
Under a policy that has attracted little public notice but can have grave consequences for nursing home residents, the federal government is increasingly trying to end Medicare and Medicaid payments for homes with only marginal and correctable problems.

Loss of federal funds can force a home to discharge frail residents for whom relocation is often a more pressing danger than anything that inspectors found wrong with their current environment. The result is a tragic irony, say many people on the front lines of long-term care: A system meant to protect nursing home residents often seems to lose sight of them as it swirls in a maelstrom of politics and petty bureaucratic rivalries.

Several courts have agreed.

At least four times since President Clinton's July 1998 announcement of an intensified crackdown on bad nursing homes, federal judges have rebuked HCFA for not acting in the "public interest" in trying to shut down homes not deemed to pose an immediate threat to residents:
The judges all said they were worried about a phenomenon called "transfer trauma."
"Residents probably never should be moved from their home unless structurally the building is going to fall," said Sarah Greene Burger of the National Citizens' Coalition for Nursing Home Reform, a consumer advocacy group. "It is very traumatic."

Burger said a better solution would be to install temporary managers for homes the government believes are poor performers. "These are avenues that are open to the HCFA, and they are simply not using them," she said.
State nursing home regulators conduct inspections on behalf of HCFA, which has the final say over penalties. Together, the states and HCFA are responsible for the welfare of 1.6-million elderly and disabled people who live in nearly 17,000 nursing homes, most of them subsidized by Medicaid, the federal health program for the poor.
The senator from Michigan was furious.

Speaking by phone to an HCFA panel that had convened in Kansas City, Mo., last November to hear Heartland Manor's complaints, Democrat Carl Levin accused the agency of engaging in retaliation.

The nursing home's crime? It had dared to appeal the HCFA ruling that had been keeping it in limbo for years over its Medicare certification.
But many people believe there are no good nursing homes - period. And with the industry's overall bad track record, policymakers tend to view the critics as more credible than the nursing home administrators. Pauline Wagner, whose mother spent four years in California nursing homes, is one such voice.

"I have been a witness to the neglect, carelessness, and understaffed" conditions in nursing homes, Wagner said. "Nurses who do not wash their hands, nurses who are lazy and sleep on the job, nurses who do not answer call lights, nurses who tell the residents to shut up when they call out for help. I don't believe there are any good nursing homes."
He said the challenge is to distinguish between the truly dangerous homes and those that have merely stumbled. Even at troubled homes, White said: "Family members very adamantly oppose you terminating a facility from the program. They just want things to get better." But politics, unsurprisingly, complicate the picture. With polls showing public disgust with nursing homes, lawmakers from both parties compete to be seen as tougher than the other guy on abuses.
The industry, meanwhile, is fighting back. The Illinois Council on Long-Term Care has sued HHS and HCFA over inspection methods that nursing home trade groups call "fatally flawed." The case is now before the Supreme Court on a procedural question.

And Beverly Enterprises, the nation's largest nursing home chain, has alleged in a lawsuit that HHS made an "arbitrary" and "capricious" decision to suspend a Beverly facility in Brooksville from Medicare. The Medicare suspension led to an automatic cut-off of state Medicaid funds as well.

COMMENT:- The chickens are coming home to roost. People are angry about the way the elderly have been misused and neglected over the last 10 years. The nurses are angry. There is little sympathy for the corporations in the courts. Large awards for mistreatment push up malpractice insurance. This is Texas and not Florida where insurance costs are even higher.

Nursing home operators say insurance rates have tripled :: This industry is being kicked around every which way
The Associated Press State & Local Wire February 7, 2000

Bottoms (Harvest's president) said insurance for Harvest's 3,000 beds in 25 homes will cost $650 per bed this year, up from $250 last year - and far more than the $40 to $70 per bed the company paid for homes in Maryland and Iowa.

The price increase would cost the company an extra $1 million and require cuts in services, Bottoms said.

"If we cannot find an affordable policy in Texas, then we'll just drop it," he said.

State records indicate that competition is declining among insurers that serve nursing homes. There are three groups of licensed and regulated insurers in the market, down from eight in November 1996.

COMMENT:- Consolidation, diversification and corporate integration have been among the buzz words for marketplace success over the last 10 years. None of them were in the interests of patients and all of them have failed as business goals. Suddenly "core business" has become the recipe for survival. The real question is whether the marketplace and its understandings are appropriate for nursing home care and whether corporate survival is in the public interest. The evidence available indicates that in the long run citizens would be much better served if care was not provided by the corporate marketplace.

IHS expansion leads to Chapter 11
Modern Healthcare February 7, 2000, Monday

The bankruptcy filing last week by one of the nation's largest post-acute-care companies was the sharpest nail yet in the coffin of diversification.

Once a leading advocate of the one-stop-shop model for post-acute care, Integrated Health Services is now a leading example of aggressive expansion gone sour.

The Sparks, Md.-based company is the fourth publicly traded long-term-care firm in five months to seek protection from creditors under a Chapter 11 filing. All four were primarily skilled-nursing providers, but each also pursued several lines of business designed to complement its core operations.

And of the four, IHS may have been the most broadly diversified.

"With nursing homes, home care, home oxygen, rehab hospitals and the rest, (IHS) tried to put together a post-acute network of services," said Debra Lawson, a New York-based analyst for Salomon Smith Barney. "That sounds good and looks good on paper but hasn't worked out in practice."
Analysts point out that the company's rapid expansion before the implementation of the new Medicare payment system for skilled-nursing facilities resulted in a huge debt load. With reduced cash flow, servicing that debt became all but impossible.
The survivors in the long-term-care field are those that have stuck to their core businesses, analysts said.

New Hampshire

COMMENT:- The next article addresses many critical issues about care and staffing.

The Ailing NH NURSING Homes Industry
Business NH Magazine March 1, 2000

Many New Hampshire nursing homes are facing uncertain financial futures.
Across the country, 10 percent of all nursing facilities are under bankruptcy proceedings.
How did this happen?


Experts point to three contributing factors. First, during the mid-1990s, a wave of nursing home acquisitions flooded the nation, and NH was no exception. By the end of the decade, 47 percent of NH's nursing homes were no longer independently owned.

There was a "fury to buy in 1994, '95, '96," says John Poirier, executive director of the NH Health Care Association, - - - - -

Now three of those national corporations Integrated Health Services, Vencor, Inc. and Sun HealthCare Group, Inc. - have filed for Chapter 11 bankruptcy protection. What happened?

"They put together business plans that assumed reimbursement levels would stay constant," Poirier says. Then along came the Balanced Budget Act of 1997, which threw a monkey wrench into those optimistic projections.
Griffin and her small team work with residents, their families and the facilities to resolve disputes, and she says she has seen marked increase in the number of complaints" over the past three years - from 674 in 1997 to 1,146 in 1998, and the same again in 1999. The complaints "cover a full range of concerns," she says.

Asked to what she attributes the increase in complaints, Griffin answers that "it's not possible to attribute what we are seeing to one factor." Certainly, the trend towards acquisitions and the building of multi-state chains is part of it. "It's a matter of public record," Griffin says, "that we have chains that made huge acquisitions and overextended themselves."

Rusin says the "atmosphere" changes when privately-owned nursing facilities are purchased. "It used to be that you'd talk to the administrator, and it would be the owner. ... Now they have to call a corporate office ... chains have templates on how to do things," and cannot always react quickly to correct problems.


The availability of labor is the big problem, Griffin says, a thought bolstered by everyone interviewed for this story. "Staffing issues are huge, and have a devastating impact." With NH's robust economy and record low unemployment rate, there is a "declining pool of people who are available and trained to work," the ombudsman says.

In some ways, the nursing home chains are responsible for their labor problems, she believes. "Many chains, when they first came in, said the homes were way overstaffed. I've been with this program for 12 years, and they've never been overstaffed. ... But (the facilities) let people go, and now their labor pool is diminished."

One nursing home chain, Genesis Health Ventures, has been the focus of heavy media attention after the release of "A House of Cards," a report issued by the Service Employees International Union (SEIU),
In the report, Genesis - which bought 10 McKerley nursing homes in 1995 - is reported to have cut staffing levels while increasing the number of Medicare patients, who need more complex medical care. In the two years following the acquisition, several Genesis facilities saw marked increases in the number of deficiencies cited by HCFA surveyors, and a marked decrease in the nursing and Certified Nurses Aides hours per patient per day.

Reviewing the deficiency reports (which are available online for all NH nursing homes at for Genesis facilities shows an uneven record of citations, a pattern that appears to hold true for many of the chains in NH. In the most recent surveys, for example. two Genesis homes had no citations for deficiencies, others ranged from one to four to as high as 17.


In some parts of the state, the nursing homes aren't competing with each other for employees; they're competing with Target and Wal-Mart.

In other areas, there is almost a bidding war going on for nursing home workers, with $1,000 signing bonuses paid to leave one facility for another, Rusin says.

The lack of continuity of caregivers is a big issue for residents, says ombudsman Griffin. "Survey after survey shows that what residents value most is their relationships with staff ... it's the interpersonal connection. And if the faces are changing all the time, that's not there. Facilities try to provide continuity, even with (temporary) staffing agency personnel."

Her solution? "Nursing homes need to be a place where people want to work. It's not all about money and benefits. The industry needs to pay attention to the work environment. Caregivers want to feel that what they have to offer is valued and respected. Money needs to be invested in the culture of the nursing home, paying attention to why people want to work where they work. That's a long-term solution."

COMMENT:- The next article addresses the problems of litigation and malpractice insurance. It reflects the views of the corporate chains.

Driven Out; Brief Article --- As nursing home liability costs soar, exiting carriers spur market crisis.
Best's Review March 1, 2000

Skyrocketing general and professional liability insurance loss costs for nursing homes are reaching crisis proportions in many parts of the United States. The problem is most acute in Florida, where at least 10 carriers have left the state or stopped writing new business.
"This is a crisis industrywide and countrywide, but in Florida the trends are outrageous," said study co-author Theresa W. Bourdon, managing director and actuary with Aon Worldwide Actuarial.
"It's the purest example of an underwriting crisis that we have today," said Corbette Doyle, chief executive officer for Aon Healthcare Alliance, Nashville, Tenn.
The litigation issue is especially acute in Florida and Texas, where strong patients' rights laws have invited a flurry of lawsuits on behalf of nursing home residents. In Florida, the law allows for the recovery of attorneys' fees in addition to punitive damages if a court finds that the nursing home infringed on the rights of the elderly resident. "Those two states started the crisis, and the fear from nursing home operators and insurers is that this will ripple throughout the nation," said Bourdon, who prepared the study with Sharon C. Dubin, assistant vice president and actuary.
Insurers have responded to the high loss costs in the past two years by increasing reserves, exiting markets, not renewing business and raising both premiums and deductibles.

Matthew Mosher, assistant vice president in the property/casualty division of A.M. Best Co., said nearly all the companies that used to write nursing home liability are getting out of that business.
It's not just primary writers that have lost their appetite for nursing home business, St. Paul's Nelson said. "You call up any of the key treaty or facultative reinsurers, and they have no interest in doing anything on nursing homes," he said.

Curbing Litigation

The Aon actuarial study, completed in January is a major weapon in the Florida Health Care Association's lobbying campaign for changes to the state's laws protecting the rights of nursing home residents. Bourdon planned to present the findings to legislative and gubernatorial staff.

Among the guarantees in the Florida law are the right to be informed, to be provided adequate care and to be treated with dignity. In addition to what it considers an unreasonably low burden of proof for vaguely worded rights, the nursing home industry objects to the potent remedy for violations, which includes actual damages, punitive damages and attorneys' fees.
The association is pushing for changes to the law so that suits related to medical services in a nursing home would fall under the legal procedures for medical malpractice rather than under the statutes governing patients' rights, Asztalos said.

COMMENT:- Note the ideas lying behind the next article. Instead of a system where the need of patients and the community are directly met, the needs are to be met by pulling the puppet strings of a system which responds blindly to profit potential and not care.

GAO Report Finds that SNF PPS Does Not Restrict Access to Care; ... General Accounting Office; skilled nursing facilities prospective payment system; Brief Article
Healthcare Financial Management March 1, 2000

A General Accounting Office (GAO) report affirms that the prospective payment system (PPS) for skilled nursing facilities (SNFs) has had only a minimal effect on Medicare beneficiaries' access to care. The GAO, which audits and evaluates Federal programs for Congress interviewed 153 hospital discharge planners and found that while some beneficiaries had slightly longer in-hospital stays, the longer stays were "probably not detrimental to most patients because they received the care they needed during their extended stay," thus reducing oreliminating their need for SNF care. The agency noted, however, that while these circumstances could result in reduced Medicare expenditures, hospital costs could increase.

SNFs' preference for admitting patients needing rehabilitation services suggested to the GAO that the payments for these services may be too high. Alternatively, SNFs' reluctance to admit patients needing expensive drug treatment and infusion therapy suggested that payments for these services may be too low. The GAO also found that while payments for individual beneficiaries may be low in the aggregate, PPS payments to SNFs were adequate and, in fact; could be too high because the 1995 base-year costs, used to set the initial PPS rates, may have been inflated.

COMMENT:- This article describes the complex maze of Medicare and Medicaid eligibility - quite impossible for an elderly citizen to negotiate rendering them very vulnerable. It urges relatives to become advocate and fight for the patients rights. One can only wonder if this is the sort of impersonal tightly regulated market based health system which Graeme Samuel and our government have in store for Australians - what room for responding warmly to individual human need.

Nursing Homes: Who Gets In, Who Pays The Bills
Kliplinger’s Retirement Report March 2000

No one wants to spend their last days in a nursing home. With so many other options available today, most people don’t have to wind up where they’d rather not be. - - - - - But there are times when a nursing home is the best place, particularly if a patient needs skilled nursing, 24-hour monitoring or physical therapy following a hospital stay. - - - - nursing homes have changed into facilities where seriously ill people receive specialized care. As a result, the real challenge for some people today is not staying out of a nursing home but staying in one. The next big hurdle is figuring out who will pay for it.

Many people are surprised to learn that Medicare, the government health care program for those age 65 and older, will usually not pay their nursing-home bills except for short periods of time after a hospitalization. Patients who haven’t bought long-term-care insurance face the prospect of draining their savings to pay for nursing-home bills before they are "poor enough" to qualify for Medicaid.

Medicaid is a joint state-federal program run by the states, each of which has its own eligibility rules governed by broad federal guidelines. It was designed to provide health care for the poor, but has become the primary payer of nursing-home bills by default: More than half of all of those who are admitted to a nursing home run out of money within the first year and must turn to the government for help.

Today, Medicaid pays the bills for more than two-thirds of all nursing-home residents. But because it pays the nursing home less - - - - Medicaid accounts for less than half of all nursing-home revenues.
Same Care, Limited Access

By law, Medicaid beneficiaries are entitled to the same quality of care as private-pay patients, but they may have a more difficult time getting access to care.
"If you go in as a private-pay patient and later transfer to Medicaid, they can’t discharge you for financial reasons," says Warner. However, a nursing home can transfer a Medicaid patient to a different room and, in some states, to a "Medicaid wing" or even another facility where a so-called Medicaid bed is available.

"Nursing homes can’t discriminate in their discharge policies, but they can discriminate in admissions," Warner adds.
"If the nursing home doesn’t have a Medicaid bed available&emdash;which guarantees that the government will pay your bill&emdash;it can’t admit you,- - - You can’t expect any nursing home to provide care for free."
Medicare will usually pay for a patient’s nursing-home bills if the patient is released directly from a hospital to a nursing home for skilled care or rehabilitative services. But nightmarish problems can occur when rules are not followed precisely.
Medicare rules provide for coverage for up to 100 days in a nursing home. But care&emdash;and Medicare coverage&emdash;can end abruptly if a health care provider determines that the therapy is not working. Families may be suddenly confronted with the choice of taking the patient home or paying the bill themselves.

If your loved one is facing a hospital or nursing-home stay, your most important role is that of advocate. Monitor the patient’s care, learn about his or her rights, and be prepared to defend those rights.

COMMENT:- The US system of funding involving federal and state government is even more complex than Australia's. It has many of the same problems.

The Times-Picayune March 2, 2000 Thursday, ORLEANS

Claiming that 7 percent cuts to their Medicaid reimbursements would leave Louisiana nursing homes unable to offer the level of care that federal and state law requires, 50 homes have filed a class-action lawsuit seeking to block the reductions.

The suit against the state Department of Health and Hospitals was filed Wednesday as the cuts took effect.
Federal Medicaid laws require the state to reimburse health care providers at a level that allows them to offer "a quality of care and equal access," Pizza said.
The 7 percent across-the-board cuts to hospitals and group homes that serve Medicaid patients are part of the Health Department's attempt to make up for a $126 million shortfall in the budget for the program, which provides health care to low-income residents.

COMMENT:- The citizens groups who are targeting the worst nursing homes with law suits are successfully forcing the worst chains to sell up and leave Florida. The chains are trying to change the law.

The Palm Beach Post March 3, 2000, Friday, FINAL EDITION

Spurred by a statewide epidemic in nursing home bankruptcies, the nursing home lobby is pushing legislation that would make it harder to sue Florida homes.

The Florida Health Care Association, a lobbying group for nursing homes and assisted-living facilities, says the bankruptcies give new urgency to an old effort - changing a law it says has made Florida the nation's capital for lawsuits against the industry.

Statewide, some 17,000 nursing home beds - or about one in five - are being operated under bankruptcy protection.
Seven chains that operate in Florida - four of them locally - have filed for Chapter 11 bankruptcy protection from creditors in the past six months.
Rep. David Bitner, R-Port Charlotte, is sponsoring a bill to require nursing home suits to be filed under the state's medical-malpractice law. Trial lawyers said that would reduce the number of suits to a mere trickle.

The reason: The medical-malpractice law caps damage award for pain and suffering at $ 350,000 in jury trials; it allows only the injured and spouse to sue and only for a breach of the prevailing standard of medical care; it doesn't allow patients' children to sue or permit suits alleging loss of dignity or neglect.

"That would be the death knell for bringing suits against nursing homes," said Gregory Barnhart, a West Palm Beach trial attorney. "And open season on elderly people in Florida.
Instead of limiting suits, Sen. John McKay, R-Bradenton, and Rep. Tom Feeney, R-Oviedo, are sponsoring a proposal backed by trial lawyers to create a bipartisan task force that would look at all issues affecting the availability and affordability of nursing home beds in Florida.
According to a recent study of nursing homes by Aon Worldwide Actuarial Solutions, lawsuit costs in Florida are the highest in the nation: The typical Florida suit costs $ 278,637, two-and-half times more than in the rest of the country. And Florida nursing homes are three times more likely to be sued, the study found.
In December, Extendicare sold six of its 33 Florida nursing homes for $ 40 million, and it plans to continue its exit. Florida accounts for only one-sixth of its beds but ninety percent of its lawsuit costs, Calkin said.

Bitner's bill, if passed, may bail out many national chains like Extendicare that have seen the pool of potential buyers evaporate. In the past year at least 10 insurance companies have stopped writing new liability policies in Florida, according to Aon, while others are offering severely limited coverage.

Golden years fade for nursing home chains; An industry booming only a few years ago struggles to survive
THE BALTIMORE SUN March 5, 2000, Sunday ,FINAL

Long-term care has a cloudy short-term future.

With Integrated Health Service's filing for bankruptcy protection last month, four of the nation's seven largest nursing-home chains -- with 177,000 beds -- are in bankruptcy.

Of the country's 17,000 nursing homes, 1,651 are operating under the supervision of the bankruptcy courts.
Despite the turmoil and the parade to Bankruptcy Court, many analysts expect the companies to reorganize and survive. The nursing homes remain about 90 percent full, and Congress voted in November to restore some of the Medicare cuts.
Joshua Wiener, a long-term care researcher at the Urban Institute, agreed: "The companies will reorganize or be bought. I don't think there's any chance these facilities would close."

Others in the industry are not as sanguine.
The current crunch in the industry has its roots in the mid-1980s, when companies like Genesis and Integrated Health were getting started. They took nursing homes in a new direction -- a direction that made the term "long-term care" somewhat misleading.

Dr. Robert Elkins, who founded IHS in 1986, anticipated a demand for "subacute" services -- care that is less intense (and less expensive) than what hospitals provide.

Integrated Health Services and other nursing-home chains - - - - began providing shorter-term care for patients leaving the hospital -- at higher rates than those usually charged by nursing homes.
While their stays were shorter, the subacute patients received more expensive services -- therapy, lab tests, medications - - than traditional long-term care residents. From 1990 to 1998, the daily cost for Medicare patients at nursing homes more than doubled -- from $98 to $262.

Meanwhile, the number of Medicare patients treated in nursing homes was more than doubling as well -- from 638,000 to 1.6 million. Medicare spending in skilled nursing facilities -- - - -- grew from $578 million in 1986 to $13.6 billion in 1998.

The nursing home chains followed the money, becoming more dependent on Medicare payments for subacute patients -- now 25 to 40 percent of revenue for large chains -- in addition to the traditional Medicaid payments for indigent elderly residents.

Growing rapidly, the chains bought more and more nursing homes and more and more related businesses -- therapy companies, home-nursing operators, institutional pharmacies -- to serve the subacute patients.
But the growth in spending on subacute care caught the attention of Congress, which cut payments as part of the Balanced Budget Act of 1997.
Rate cuts and new formulas were an attempt to deal with the problem of expensive and unneeded care without directly cutting services, said Urban Instititute's Wiener.
The chains had heavy debt loads from their acquisitions -- IHS had more than $3 billion -- and were hard pressed to cope with the sudden revenue drop.
Other acquisitions in the industry seemed overpriced, even at the time, he continued.

"Egos get involved. You grow by acquisition, and you've got to get the deal done. There were some bad business decisions." (QUOTE)

"some of the companies went into a huge buying spree. But they overpaid for the homes, and now they can't get enough revenue to pay their debts." (QUOTE)
"Investors do not take anything on faith," Walker (Genesis chairman) said. "They only will respond when they see stability and the ability to make a profit."

COMMENT:- The problem of chains not passing money given for salaries into pay packets occurred in several states where money was given by governments specifically for this purpose.

Higher wages needed to ease nursing home labor shortage
The Business Journal March 10, 2000

Nursing home advocates are urging state officials to adopt a so -called "wage pass through" law intended to ease labor shortages at Wisconsin's nursing homes.

Last year, the state Legislature adopted a 5 percent wage supplement for certified nursing assistants (CNAs), who provide most of the hands-on care to nursing home residents and patients. However, Gov. Tommy Thompson vetoed a similar measure for a 3.5 percent wage supplement for nursing home support staff, such as housekeeping, laundry and food workers.
Iverson (Service Employees International Union) said this year's bill would close the loopholes that have allowed some nursing homes to avoid passing the 5 percent wage increase on to certified nursing assistants.

SEIU Local 150 expects to file complaints against those nursing homes that the union alleges have failed to honor the wage passthrough provision for certified nursing assistants.
In addition, the union on March 3 filed with the National Labor Relations Board unfair labor practice charges against the Hartford Care Center and its parent company, Integrated Health Services Inc. of Maryland.


With some nursing homes teetering under the threat of bankruptcy protection, the House leader steps in.
The Tampa Tribune Saturday, March 11, 2000

Florida's nursing home industry, beset by lawsuits, bankruptcies and long-standing questions of how to improve care, could become the focus of a special session of the Legislature this summer.

House Speaker John Thrasher said Friday his goal is to find a legislative fix during the regular session, which is scheduled to end May 5.
While Thrasher is looking at immediately fixing the financial problems of the industry, advocates for the elderly see an opportunity in a special session to address a host of deeper long-term issues facing the industry.
"Florida is wooing seniors to this state but not really looking at putting a system in place to care for them," said Jim Towey, founder of the advocacy group Aging with Dignity. Towey notes that past legislative sessions have been dedicated to large themes, from the death penalty to education, but not the elderly.
Tampa attorney Jim Wilkes, nationally recognized for his aggressive pursuit of consumer lawsuits against nursing homes, contends the industry is responsible for many of its own problems. He said he hopes taxpayers aren't forced to pick up the tab for bad management decisions by nursing home executives.
Meanwhile, a U.S. General Accounting Office report issued in December studied two companies, Sun Healthcare Group and Vencor Inc., and concluded the industry may be responsible for its own financial woes.
Florida ranks 49th among the 50 states in its Medicaid expenditures on elder care services other than nursing homes, he said. Of all the state money that goes to caring for older people, 80 percent flows to nursing homes.

Legislators may help nursing homes
The Tampa Tribune March 11, 2000, Saturday, FINAL EDITION

(NOTE -- This article covers same ground as above)

Debt, Reduced Federal Payments Cripple Nursing Home Industry
The Miami Herald March 14, 2000, Tuesday

Rapid growth, mounting debt and changing federal reimbursement rules are driving the nation's nursing homes to the brink of collapse.

Nursing home executives also say they're being undermined by an explosion of lawsuits in Florida. They're asking legislators to support measures aimed at helping their ailing companies. Trial lawyers say the proposed changes are simply an attempt by the nursing home industry to turn the spotlight away from its own financial mismanagement.
Some firms did not aggressively diversify, which has shielded them from the storm, industry experts said.

For example, both Beverly and Manor Care have fewer Medicare patients, cutting their reliance on that source of revenue. And rather than operate their own therapy divisions, those companies bought those services from other nursing home chains, including Integrated Health and Sun Healthcare, which now are in bankruptcy.

Nursing home operators in Florida are also being stung by what they say is a law enabling them to be disproportionately targeted for lawsuits. The increasing frequency of lawsuits being filed -- but often settled out of court -- has led to a dramatic increase in the cost of liability insurance for nursing homes, said Ed Towey, spokesman for the Florida Health Care Association nursing home industry group.
Florida's for-profit nursing homes are three times more likely to be sued than facilities elsewhere, with liability insurance becoming increasingly expensive for all nursing centers, according to a study conducted for the industry last year by Aon Consulting. On average, liability insurance costs in Florida per nursing home bed are eight times what's spent in the rest of the country, the Aon report found. The average size of a claim in Florida -- $ 278,637 -- is double the average for the rest of the country -- $ 112,351 -- the study reported.
To counter, the nursing home industry has mounted a major lobbying effort to convince the Florida Legislature that complaints of a medical nature should be filed only as medical malpractice lawsuits, which are more difficult to prove.
Wilkes said the nursing home industry is trying to eliminate important legal protections now held by Florida's nursing home residents "at a time of increasing neglect. - - - - - The nursing home industry is in its death throes ... and those people are doing desperate things."


Medicaid crunch hurts nursing homes
The Denver Business Journal March 17, 2000

Severe cutbacks in federal funding and a labor market where quality staff are in short supply have pushed almost a third of Colorado's nursing homes into bankruptcy and state regulators are concerned about patient care. - - - - -

55 of Colorado's 234 skilled nursing facilities have filed for either reorganization under Chapter 11 or liquidation under Chapter 7 bankruptcy laws.

More than 30 percent of the state's licensed skilled nursing beds are located in homes operating in bankruptcy.

"We're concerned about patient care simply because of the number of facilities in bankruptcy and are monitoring facilities in bankruptcy," said Janell Little, deputy director of the Health Department's Health Facility Division.
Fueled by rich reimbursement rates by federal health programs Medicare and Medicaid, a dozen investor-driven nursing care companies gobbled up competitors from coast to coast during the mid1990s.

Then, as part of the Balanced Budget Act of 1997, Congress cut Medicare reimbursement in an attempt to reign in fraudulent billing and capped physical and speech rehabilitation benefits at $1,500 per patient per year.
A tremendous outcry by the nursing home and home health industry forced Congress to re-evaluate the depth of its cost-cutting measures in 1999. Federal lawmakers bumped up payment rates and temporarily eliminated the rehab cap.
But the monetary woes that plague nursing care's giants in Colorado haven't hit smaller, independently owned operators nearly as hard.
Now, under the system so onerous to multi-state nursing home chains, little mom and pop operations are able to grin and bear it. Though they aren't making money hand over fist by any means, minimal administrative costs and lower overhead have meant less downward cost pressure, said Wilson.



Jim Wilkes is on a crusade to dismantle Florida's nursing-home industry - one lawsuit at a time.

Since the early 1990s, the Tampa-based lawyer has successfully sued hundreds of nursing homes, racking up millions of dollars in settlements and jury awards for elderly clients who, Wilkes claims, suffered or died at the hands of an unfeeling industry.

So it's little surprise that Wilkes and his army of 30 lawyers have become the worst nightmare of many nursing-home owners. But it's not just the specter of becoming Wilkes' next target that keeps them up at night. It's the skyrocketing liability-insurance premiums, which they say are the direct result of Wilkes' lawsuit spree.
Making matters worse: Only one of a dozen large insurers is willing to write new policies in Florida, though the others are willing to renew existing policies at higher premiums. As a result, nursing homes that receive sky-high bills have little hope of finding lower rates elsewhere. And because the Department of Insurance doesn't regulate nursing-home premiums, insurers can raise rates without government restraint.
To many, the nursing-home industry hardly garners sympathy. Years of abuses, government shutdowns and lawsuits have worn their public reputation to the point where many people see nursing homes as places of despair, to be avoided at all costs. As a result, many nursing homes are crowded with society's poorest senior citizens, while those with money flock to premium services such as home care and assisted-living facilities.
Wilkes is unsympathetic to the financial plight of the industry. He points to a recent spate of federal actions against large nursing-home chains that allege some companies bilked the Medicare and Medicaid programs out of billions of dollars.

For example, the U.S. Justice Department filed a $1 billion claim in federal bankruptcy court on March 14 against Vencor Inc., a Louisville, Ky.-based chain that operates one home in Central Florida. And in February, Beverly Enterprises Inc., which owns eight facilities locally, settled charges that it defrauded Medicare by agreeing to pay $175 million.

Rather than waste money lobbying legislators to change Florida's laws, companies should focus on stopping corruption and nursing-home abuses, Wilkes said.

"We've got a system that is full of fraud and deceit, and their evil owners are spending money on a political campaign designed to take away their patients' rights," he said.

If Florida's nursing-home industry collapsed under the weight of its financial problems, its elderly patients would be better off, Wilkes said. He bristles at the claim that Florida law makes it too easy to sue for minor incidents and ailments.

"I don't think there should be an acceptable level of neglect," he said. "These people have gone out and committed enough crimes that they've numbed the public to them."
"Medicare was a gravy train," Plush (from PricewaterhouseCooper) said. "They gambled that it was going to last forever and they lost."

As for the lawsuits, the industry's history of abuses made it an easy target, he said.
Bottom line: Nursing homes have little choice but to pay their premiums. And while there are no easy answers to the industry's current plight, one thing appears certain: Jim Wilkes isn't going away. "They are just evil, and everybody knows it," Wilkes said. "That's why I always win."

The Palm Beach Post March 26, 2000, Sunday, FINAL EDITION

Florida legislators face a dicey decision on a bill some call a nursing-home bailout and others call lawsuit relief to keep thousands of elderly residents from being evicted.

The state's nursing homes and assisted-living facilities want the Legislature to change the civil litigation laws that let residents and their families sue over medical problems resulting from poor care.
State regulators call it a crisis, but it is a crisis of the industry's own making. Twenty percent of the state's nursing-home beds are being operated by national chains in bankruptcy. As many as 118 of the state's approximately 700 homes could close this summer. The proposed legislation won't solve that. - - - - - - Senate leaders hesitate, noting that some chains paid executives lavish salaries and at least one, Beverly Enterprises, defrauded Medicare of millions.
Even if legislators do act, mostly on behalf of the not-for-profits, the crisis will remain. If homes close, the Agency for Health Care Administration says it has an emergency plan. If long-term care doesn't get more attention from the Legislature and Congress soon, however, emergencies will be the norm.


State launches effort to police care homes
San Jose Mercury News March 29, 2000
ByEd Pope Mercury News Staff Writer

`Operation Guardian': Secret inspections by the attorney general will be aimed at `a social plague': abuse and neglect of the elderly.

Describing care in California's 1,500 nursing homes as ``a social plague,'' the attorney general this week launched a multiagency effort using secret inspections to ferret out and either correct or prosecute abuse and neglect of the elderly.

Dubbed ``Operation Guardian,'' the effort will get under way in the Los Angeles area immediately and will move quickly to San Diego and the Bay Area within weeks, said Deputy Attorney General Colin Wong, who heads his office's Medi-Cal fraud and patient abuse unit.

For the first time in the state's history, the crackdown will target the owners and principal officers of skilled nursing homes and nursing home chains, as well as individuals who are found to have abused or neglected their patients.

``Never in history has a California attorney general prosecuted a skilled nursing facility at the corporate level,'' Wong said. ``(Attorney General Bill) Lockyer wants to reverse that. If they engage in practices that result in abuse and neglect, they should be held responsible.''

But the main priority of the crackdown, Wong said, will be to correct shortcomings in care.

The first known criminal prosecution of the corporate officers of a nursing home chain occurred in Santa Clara County in May when the grand jury indicted Guardian Post Acute Services Inc., of Northern California, on six felony counts of neglecting elder and dependent adults. The charges were brought by the district attorney's office. The case is still pending.
A representative of the industry, however, denounced the attorney general's planned operation as ``another layer of enforcement that will do very little to improve quality of care.''
The attorney general decided a task force was needed after a congressional report released last fall found that the state had cited nearly a third of California's nursing homes for serious violations in care from 1995 to 1998.

Wong said it is vital that the state be able to guarantee that nursing home patients get adequate care since the number of people who are over 65 is expected to double to 7 million in the next 20 years. The crackdown was made possible, he said, by Lockyer, who doubled the abuse unit's budget and personnel after taking office.


Nevada nursing homes have nation's highest bankruptcy rate
The Associated Press State & Local Wire March 30, 2000

Just two days before Christmas, 95-year-old Lily Coffman had to pack up her belongings and move to a new nursing home because her old one was closing abruptly.

It had gone broke.

"It was awful, just awful," Coffman says. "We thought they were joking, you know, and they said, 'No, you've got to be out by the 23rd of December.' I had to get a new place in a hurry."

Last December's move by Coffman and about 60 fellow nursing home residents is one that's repeating itself around the nation.
"The system is crashing around us," says Michael Clark, head of the Nevada Health Care Association. "With all the bankruptcies we're facing, it's a disaster right now."
A nationwide television and print campaign was launched last week by the AHCA, which represents nearly two-thirds of the 17,000 nursing homes in the United States.
IHS is one of four corporations that together account for more than 1,400 of the homes that have come under bankruptcy court protection in recent months.

Others include Atlanta-based Mariner Post-Acute Network, with more than 400 homes; Louisville, Ky.-based Vencor, with 303 homes; and Albuquerque, N.M.-based Sun Healthcare Group, with 369 homes.


Nursing homes say lessen the liability; The financially troubled industry wants restrictions on patient lawsuits.
Sarasota Herald-Tribune April 2, 2000, Sunday, ALL EDITIONS
Dara Kam of the Capital Bureau contributed to this report.

With Florida's large elderly population, a nursing home crisis translates into a statewide crisis.
Laying out a grim scenario in which some of those financially troubled homes may soon close their doors, nursing home proponents are seeking relief from the Florida Legislature.
For instance, there's Charlotte Courson, a Tallahassee widow who put her 96-year-old mother into a nursing home after she had a stroke last year. She said she is worried about nursing homes closing.

"I alone cannot care for her needs," she said. "I very much appreciate being able to depend on the nursing home."
But there's also the case of John Lee Butler, a 65-year-old Korean War veteran who died after maltreatment in a Tampa nursing home. Last year, a jury awarded his family $ 15.2 million after hearing testimony that Butler suffered 30 falls during his stay, developed bed sores and died from malnutrition.

"What they're trying to do is strip nursing home residents of the protections that have been in (Florida) law now for 24 years," said Jim Wilkes, a Tampa lawyer who represented Butler's family.
Senate leaders say they want to take a longer look at the issue. Last week, the Senate approved a bill that will set up a long-term care study commission, which will report to the Legislature on Jan. 1.
Brown & Brown Insurance told the association that insurance rates were increasing from $ 372 a bed last October to $ 1,000 a bed in March.
The measure, following the state's medical liability laws, would prevent grown children from suing nursing homes for injuries their parents suffered.
Wilkes said the threat of a lawsuit serves as a means of protecting the state's most frail and elderly residents.

"If I shut up, who would be speaking for these residents?" he asked.

The Ledger (Lakeland, FL) April 2, 2000, Sunday

(NOTE-- This article is very similar to that above)

COMMENT:- Note the suggestion from the lawyers who deal with problems in care -- that for profits should be discouraged in Florida and incentives used to bring back the not for profit homes.

Nursing homes and society's need to face the hard facts about aging
The Tampa Tribune April 2, 2000, Sunday

For much of the past decade, a few lawmakers, lawyers and caretakers of the elderly have warned that with more and more Floridians living longer, the state must come to terms with caring for those unable to tend to themselves.

Many seniors have no family to take them in and thus live out their days alone, sadly demented, in nursing homes. The costs to the state are great - 80 percent of such people are on Medicaid. Too often, practically hidden from view, they are either mistreated or neglected.

How to pay for their care while assuring their dignity is a complex issue, largely ignored because people don't want to think about it. Generally speaking, the human attitude is that aging and mortality are realities to be faced only when the time comes.
The nursing home industry is in terrible shape, and the industry itself is largely at fault. Risky, often illegal ventures and poor business decisions by some of the largest chains
MEANWHILE, TRIAL LAWYERS have helped cripple those same companies with lawsuits that have brought punishing verdicts and unheralded settlements in cases dominated by accusations of neglect and other horrors.
It's an intense battle with leading trial lawyers like Tampa's Jim Wilkes demonizing nursing homes as institutionalized hell. And to the industry, Wilkes might as well be Satan himself.

None of this is news. People such as Jim Towey, head of the nonprofit organization Aging with Dignity, and Tribune columnist Lindsay Peterson have for years urged lawmakers to lead serious discussions about the need for a long-term care plan for the state that includes a sensible continuum of services.
Six years ago a commission headed by then-Sen. Curt Kiser spent a year searching for new, cost-effective and better ways to help Florida's elderly residents. That committee recommended the development of community-based care systems to supplement institutionalized care, but the Legislature largely ignored its findings.
It's also a fact that the nursing home industry can't keep blaming all of its troubles on lawyers or the 1997 change in Medicare reimbursement procedures that so hurt them.

Earlier this month, Beverly Enterprises, the nation's largest operator of nursing homes, agreed to pay the government $ 175 million, only a portion of the money it was accused of stealing. And the Justice Department has said it is entitled to $ 1 billion from Vencor Inc., which has filed for bankruptcy protection.
Wilkes says that in the short term the Legislature must provide more money for end-of-life care. He also would change the federal bankruptcy law so that nursing homes cannot file for bankruptcy protection.

Another lawyer, Ken Connor of Tallahassee, says lawmakers should consider incentives to encourage nonprofits and other organizations to enter the arena. He says we should not mourn the demise of companies whose financial problems are largely self-inflicted.

Connor makes the important point that the nursing home conundrum is about more than economics. It is replete with cultural, religious and philosophical overtones. Our culture, he advises, is coarsened by our lackadaisical treatment of the elderly and the loss of appreciation for the sanctity of life.
In the end, care for the elderly is important because it is an issue that most of us will one day face. That is why any solution must necessarily require the elderly to assume some responsibility for their future and their circumstances at the end of life.

COMMENT:- The next article is very sympathetic to the corporate position - the situation they find themselves in. I have followed it with a later article in the same newspaper from a citizens group. This gives the view from the other side of the fence.


'It breaks our hearts to see the attorneys come sniffing around," said Debbie Brazil, administrator of Avante at Leesburg nursing home. "We take pride in what we do. We're certainly not in this for the money."

What Brazil is lamenting is the squeeze play on nursing homes in Lake County and throughout Florida. And indirectly on seniors. The squeeze comes from three directions:

First, Florida law gives a special incentive to attorneys who sue nursing homes. - - - - - - -.

Second, the U.S. Health Care Financing Administration, which runs Medicare and Medicaid, uses 1995 costs to determine reimbursement for care today.

"In addition to frivolous lawsuits," he said, "the terrible thing is Medicare cuts take money away from providing the best services to elderly patients."
Third, liability-insurance premiums have soared. According to Ms. Brazil, the cost of that facility's insurance this year skyrocketed 900 percent.
Patient abuse and fraud have been found in some nursing homes, particularly in national chains. In recent years, hundreds of millions of dollars have been recovered by the government or in lawsuits under Florida's patients' rights law.

Steve Vancore, speaking for one of the large and vigorously litigious law firms in the area, Wilkes & McHugh, contended, "The nursing home industry is not capable of policing itself."

COMMENT:- The Coalition to Protect America's Elders explains why they are pressing the corporate chains so hard in Florida - the reasons for the many court actions. This is a response to an editorial putting the corporate position - perhaps the article above. Note this article is out of chronological order.

THE ORLANDO SENTINEL May 3, 2000 Wednesday

The Sentinel's recent editorial "Strike a balance" portrayed Florida's for-profit nursing homes as an industry in crisis. What the editorial neglected to mention, however, is that the "crisis" was created by the industry's own greed, corruption and fraud.

In 1995, the Governmental Accounting Office reported that Americans were being robbed blind by the nursing-home industry. Taxpayers were being charged for care that was never delivered, and shell companies had been set up for the sole purpose of bilking the government.

Here is just a small sample of the industry's abuses that have come to light recently:

In February, Beverly Enterprises was forced to repay $175 million of the $460 million that the government alleged it stole from taxpayers.

Also that month, Integrated Health Services filed for bankruptcy. Its own Securities and Exchange Commission reports revealed that it had forgiven principal and interest on a $4 million loan to its chief executive officer, Robert Elkins. In 1999, Forbes magazine listed Elkins as the most overpaid executive in America, earning $44 million in five years while driving the company into the ground.

Vencor, another large nursing-home chain, was forced to repay $90 million, and some of its executives went to jail. In March, the U.S. Justice Department announced that it is seeking $1.3 billion from Vencor, alleging that it had defrauded the government.

With its large population of nursing-home residents, Florida has paid a heavy price for these irresponsible actions:

The Agency for Health Care Administration (AHCA) reports that nursing-home violations increased 50 percent in a single year, from 1997 to 1998.

More than half of Florida's nursing homes have appeared on AHCA's "Watch List" with serious or repeated deficiencies. There are numerous repeat offenders, and one home has made the list 10 times since 1996.

A recent national study by the University of California shows that nursing-home care in Florida has dropped to unacceptable levels and that the state's homes had, for example, 40 percent more violations than the national average.

Rather than address these problems, however, the nursing-home chains are instead complaining about rising insurance rates. But that's only a symptom of the real problem: Care in Florida nursing homes is bad -- and it's getting worse.

Hugh Nelson of The Northern Group, one of Florida's largest nursing-home insurers, recently was quoted as saying that lawsuits against nursing homes "are not frivolous suits." He added, "They are based on things that have gone wrong in those facilities."

At the Coalition to Protect America's Elders, we believe that Florida has a responsibility to crack down on the worst nursing homes and set a new, higher standard of care in all of them. In addition, we must take the national lead in providing new alternatives such as at-home care and other services that have proven cost-effective.

In the meantime, the state should provide incentives for smaller, community and faith-based nursing homes where the quality of care takes precedence over the profit motive. Above all, we must not rob elders of the few protections they have under law.


COMMENT:- There are many claims by corporations and regulators to the effect that bankruptcies do not compromise care. Past experience indicates that this be taken with a pinch of salt. There has not been much hard data. This article reports some evidence of deteriorating care. Corporate homes had a record for poor care long before their financial fortunes turned. It is difficult to prove that it is even worse now. Common sense suggests it will be and the information coming out suggests it is.

Business Wire April 28, 2000

Since 1998, nearly a fifth of the state's nursing homes have filed for bankruptcy or closed their doors.

The economic crisis has forced about 200 fragile people to move and nearly 5,000 others to depend on stepped-up inspections by state regulators and ombudsmen to ensure that bare coffers aren't leading to skimpier meals or shorter staffs.

Not all residents of these homes have weathered the stress of the changes in the industry well.
"By the time someone like Gene gets into a nursing home . . . the only thing they have left is their room," she said. "When they can't control that any more, sometimes they feel like they have nothing left."
In Washington, about 80 percent of the bankruptcies can be attributed to the troubles of two national chains, Louisville, Ky.-based Vencor Corp. and Albuquerque, N.M.-based Sun Healthcare Group.

Both companies are under scrutiny by the Justice Department for possibly taking illegal advantage of the Medicare reimbursement system. Justice is seeking $1.3 billion for fraudulent claims from Vencor, which operates 303 nursing homes. The claim grew out of 12 suits filed in other states, mostly by employee whistle-blowers. Justice spokesman Charles Miller said the suits could uncover systemic practices that also affect Vencor's 13 Washington homes. Vencor representatives did not return repeated calls for comment.
Medicare payments mushroomed. Federal auditors later concluded that many nursing homes billed for as many services as they could, and the government paid for significant amounts of unnecessary therapy.

Driven by reports of abuse, Congress overhauled Medicare in 1998. - - - - - - - - - The lucrative business of providing contract therapists and other specialized workers in whom some national chains invested heavily virtually disappeared overnight.
State regulators and ombudsmen have been making special checks on the ailing homes to make sure residents aren't facing poor care or neglect.
But a review of the data shows that of the 51 homes against which the state took serious enforcement actions in 1998 and 1999 through fines or stop-placements, about 37 percent were in bankruptcy or closing. Because only one in 10 homes overall had the same regulatory problems, bankruptcy does seem to have increased homes' propensity toward care problems.

King County Long Term Care Ombudsman Vicki Elting, an independent consumer watchdog who monitors elder and disabled care, said "there is a definite sense of economy" inside the bankrupt homes.

Pressure from management to trim costs means many homes are short-staffed and more likely to lose administrators and nursing directors, she said.

She points to Sun's Eastside Medical and Rehabilitation Center, where the turnover rate among nursing aide staff last year was 158 percent, well above the state average of 106 percent.

COMMENT:- In the marketplace one group's collapse is another's opportunity. The scavengers are waiting. This is the care of the frail elderly we are talking about. The scavengers are interested in the pickings and not the welfare of the elderly.

Note how the patient profile in the homes is to change - because some are more profitable than others. The needs of the community have not changed.

Rebuilding from the rubble ; Start-ups seek value in financially ruined, decidedly unglamorous nursing home industry
Modern Healthcare May 1, 2000, Monday

Fran Kirley has impeccable timing. A former executive vice president at Integrated Health Services, Kirley left his job last November, soon after two national nursing home companies filed for bankruptcy protection in the wake of sweeping changes to Medicare payments for skilled nursing. A few months later, Sparks, Md.-based IHS followed suit, citing the same payment squeeze.

But by then, Kirley was hard at work on his next project. In March, he and two other ex-IHS employees founded a nursing home start-up, just in time to make the most of the sectorwide shake-up.
Kirley says he's talking to several real estate owners and regional operators that want someone to take over the operations of their nursing homes, and quickly.

Triumph Health, which operates out of Kirley's home in Sykesville, Md., doesn't own any nursing homes yet, and hasn't bagged the $25 million in venture capital it needs to get started. But things are moving fast, Kirley says. By mid-June, the financing should be in place and the firm will make a round of acquisitions toward its first-year target of 40 buildings, Kirley says.

From the ashes. Triumph is a recent addition to the small but growing number of start-ups with plans to rebuild from the rubble of the financially ruined nursing home industry.
"It has all the ingredients of an industry in turmoil. Anytime any sector is in turmoil you have contrarian people who look for value," says William Mulligan, a Milwaukee-based senior vice president at B.C. Ziegler and Co., a healthcare investment banking firm.
But Mulligan and others say there's still some money out there if you know where to look.
(NOTE-- the article reviews the exploitation of Medicare in the past to explain the present)

It was what some have called a loophole of giant proportions. (ie Medicare)

But the introduction of a prospective payment system for skilled-nursing facilities in July 1998 turned the loophole into a noose for the long-term-care chains that had exploited it.
Many of those bankruptcies were precipitated by the inability to make good on debt accumulated from acquisitions.
The most obvious evidence of the influx of new capital to the industry is the pending privatization of two publicly traded nursing home chains. Both companies escaped the heavy financial losses that have typified the public industry in the past year, but neither could avoid the industrywide erosion of stock prices.
Capital is also available to young start-ups, so long as they've got experience on their side.

"To even be in the game you have to have a credible management team, people who have done it before in other settings," Mulligan says.
Tandem Health Care, based in Moon Township, Pa., is one new firm that has won private equity backing.
Bargain hunting. Deering (from Tandem Health Care ) says that the industry's financial upheaval is creating opportunities for companies like his.
Tandem's watchword is decentralization, with three regional divisions in Ohio, Pennsylvania and Virginia. "We believe that these are very local businesses, and every facility is a stand-alone business with its own personality," he says. "You have to operate each and every facility extremely well."

Gregory Stapley is vice president and general counsel of the Ensign Group, a San Juan Capistrano, Calif.-based start-up founded in May 1999 by long-term-care veteran Roy Christensen, who also founded Beverly Enterprises.

The firm, funded by private investors, operates eight facilities in Arizona, California, Texas and Washington, - - - - - - - .
Like the other start-ups, though, Kirley says he intends to avoid creating a top-heavy corporate structure. Many functions such as human resources and computer services that the large chains typically keep in-house will be outsourced.

Kirley says his facilities will also cater to a different type of patient. "I think you are seeing people move away from the high-end acuity patients. That's what we're doing--the middle acuity."

That clinical shift comes as no surprise. Medicare reimbursement for subacute patients has fallen with the new payment system. With reimbursement rates down, new operators can be expected to use the facilities less for the subacute purposes for which many of the new ones were built, and more for the custodial purposes that were more common a decade ago, according to Advest analyst Mains.


Aid cuts create nursing home ills; Low wages, rivalry add to woes

- The mood is upbeat at the Hermitage nursing home on a sunny spring day, as employees go about their tasks dressed in baseball jerseys and residents look forward to festive activities to mark National Nursing Home Week.
But even as the Hermitage, part of a 561-unit national chain owned by Arkansas-based Beverly Enterprises, puts on a happy face, the outlook is bleak for nursing homes in Central Massachusetts and across the country.

The industry is reeling from dramatic cutbacks in Medicaid and Medicare reimbursement rates, which came after the passage of the federal Balanced Budget Act in 1997.

Several major national chains have declared bankruptcy. Other big chains, such as Genesis ElderCare of Pennsylvania -- which closed a 130-bed nursing home in Worcester last month -- have restructured, resulting in closed facilities and displacement of residents.

There's a crisis in nursing homes,'' said Stephen S. Hill, a community organizer for the Worcester chapter of the Massachusetts Senior Action Council. He pointed out that when a nursing home closes many residents are frail and don't always know what's going on. Having to move somewhere else is pretty traumatic.''

Besides the reductions in federal insurance payments, nursing homes face a severe shortage of skilled care. Some activists working to win changes in the industry say the shortage has noticeably lowered quality.

Moreover, the business is facing stiff new competition from assisted living complexes and other alternatives to traditional nursing homes.

State Rep. Harriette L. Chandler, D-Worcester, who has worked on nursing home issues as co-chairwoman of the Legislature's Joint Committee on Health Care, said low pay for certified nursing assistants has led to serious problems for residents.

Because of the deficiency in nursing home staffing,'' she said, people are suffering cleanliness problems, and waiting to be fed. Dignity and decency are lacking.''
Meanwhile, advocates for nursing home residents are concerned about the welfare of senior citizens displaced when a nursing home shuts down.
The end result of the financial crunch?

It hurts residents and families,'' Ms. Drinan-Bowes said. It ultimately affects people by causing instability in policies and procedures of nursing homes, administrative instability, and inconvenience for family members.''
And the state Senate, in its budget proposal for Fiscal 2001, included $45 million to increase Medicaid payments to certified nursing assistants in nursing homes.
The state, she said, must act now to deal with the issues affecting the places where many of its citizens will spend their final years, especially since the number of people over 65 is expected to double in the next several decades.


COMMENT:- Note that despite the failures of the corporate marketplace system and the exposure of serious problems of care in Genesis homes, it is Genesis who is talking about the latest trends in caregiving, and a financial analyst telling the meeting about new markets. As Kuttner has explained when the market fails then it is never the fault of the market. The market simply has to be restructured in another form to make it more marketlike.

The article is full of political platitudes and there is little to suggest that the panel will confront the real issues.

Maryland Lt. Gov. Kathleen Kennedy Townsend Convenes National Solutions Summit on Elder Care
U.S. Newswire May 31, 2000, Wednesday

Maryland Lt. Gov. Kathleen Kennedy Townsend held the national Elder Care Solutions Summit today, bringing together leaders and problem solvers from Maryland and across the nation to share solutions to the challenges of caregiving for our country's rapidly expanding elderly population. Advocates, researchers, caregivers, and leaders from business, government and the faith community worked enthusiastically to identify "what works," and later voted to prioritize new directions for Maryland and the nation.
Before receiving revealing data from pollster Celinda Lake, learning about the latest trends in caregiving from Maryann Timon of Genesis ElderCare, and hearing about new markets in elder care from analyst Bill Benson, Lt. Governor Townsend challenged the group of experts to "uncover and put forward the solutions that can give caregivers the support they need so that the experience does not destroy them."


COMMENT:- This next article deals with nursing home closures and patient care. It has some interesting figures showing the amount of money actually spent on care in the corporate system.

Note that no one confronts the definition of the care of the frail aged as an "industry". It is not inappropriate. The US is so conditioned to marketplace thinking that exploiting the misery of others for personal profit does not jar sensibilities.

The corporate marketplace is not seen as the problem - in fact everyone talks about the problem but no one even tries to say what it is. As a consequence the only question posed is whether government should intervene to fix the market or whether the market should be allowed to self correct. The problem resides in the ideas which lie at the root of market theory. Any measure which does not address this is simply patching the system.

The Florida Times-Union (Jacksonville, FL) June 4, 2000

Janet Rovelli of Jacksonville still feels anger over how her father was treated by Holly Point Manor.
The administrator told them everything was OK. But that very afternoon, the workers at Holly Point walked off the job after going unpaid for weeks. Holly Point began sending its residents, including the sisters' father, William Minard, to other homes.

'By 4 o'clock in the afternoon, there was chaos,' Rovelli said.

The surprise eviction frightened Minard and his family -- and became an example of what can happen when a nursing home runs out of money to operate.
The Florida Agency for Health Care Administration is monitoring 154 nursing homes because their owners are bankrupt or considered financially unstable. Ten of those homes are in Northeast Florida.

The Agency for Health Care Administration tries to keep a list of nearby nursing homes and other facilities, such as hospitals, that could take patients in the event of a closure.
Experts disagree on whether the government should take action to protect nursing homes or just let market forces work until the industry can right itself.

For families caught in the middle, it can be just plain scary.

Rovelli recalls how her father was transferred from Holly Point, without the family's permission, to a facility in Flagler County.

Rovelli can still see in her mind what he looked like after he was driven back to Jacksonville on a hot summer day in a car with no air-conditioning --
perspiring, unwashed and dressed in ragged clothes.
But lobbyists for the industry say more closures are imminent. They warned the Florida Legislature that 29 nursing homes, including two in Northeast Florida, could close as early as today because an insurance carrier was threatening to cancel their policies.
Lawmakers ultimately decided to do little. They created a task force to study the availability and affordability of long-term care and the effect of lawsuits on nursing homes' financial stability. They also approved a bill to let some nursing homes use more Medicaid funds to help pay for insurance.
The 1990s were a profitable decade for publicly traded companies that run nursing homes.

Their stock prices soared as for-profit companies expanded the number of nursing homes they operated. At the same time, they provided those homes lucrative services, such as physical therapy.
Some say the federal government should provide more funding. Others say nursing homes should have been more prudent about the costs they were paying.
The report (by General Accounting Office) concluded the real problem was the two chains (Sun and Vencor) had expanded too rapidly and taken on too much debt. Also, they sold services like physical therapy to their own nursing homes, hurting them even more when those services became less profitable under the new system.

With these financial problems in mind, the U.S. Health Care Financing Administration last year ordered all states to brace for nursing home closures.
The industry this year warned Bush, lawmakers and regulators that closures are looming for another reason: the rising number of lawsuits brought by families alleging neglect or abuse.

Insurance carriers are canceling policies. The costs of some premiums are doubling or tripling. And lobbyists say nursing homes might not be able to find insurance at all in the future.
-- The average cost to insure a bed in Florida is $ 6,200, eight times the national average.

-- And on average, a nursing home in Florida is sued three times as often as the typical nursing home in America.
'It seems obvious that there is a problem with this line of insurance,' said Don Pride, the state insurance department's director of communications. But what to do is unclear because the cause is unclear, he said.

The nursing home industry points at lawsuits, but 'insurers will say it's a problem of quality of care, of making yourself susceptible [to litigation],' Pride said.
Jim Wilkes, the Tampa attorney blamed by the nursing home industry for starting the flood of lawsuits in Florida and other states, said most of his firm's cases deal with neglect rather than medical malpractice.

He said the industry provides inadequate staffing. Though he has sued nursing homes for more than a decade, he said the industry is crying foul now because lawsuits are becoming numerous enough to force nursing homes to either improve their care or get the government to make it harder to sue.

A leading researcher on the issue echoes Wilkes' position.

On average, 36 percent of nursing home expenditures goes to direct patient care, said Charlene Harrington, a professor of sociology and nursing at the University of California-San Francisco who has researched nursing home practices for the federal government. Yet about 27 percent is devoted to administration, she said.

For-profit nursing homes tend to spend less money on staff and have more violations than not-for-profit homes, she said.
Nationwide, 65 percent of nursing homes are for-profit businesses. In Florida, 77 percent are for-profit, 'which might explain why you have some of these problems [with more lawsuits],' Harrington said.

'They're getting into trouble because they're not investing in their personnel, and they wouldn't have to fight off the lawsuits if they had adequate staff.'

A 1999 report by the U.S. Office of the Inspector General found that many problems with resident care stemmed in large part from staffing shortages and a lack of medical expertise among staff.
'I (wife of patient who developed pressure sores) was expecting them to take care of him because they had staff there, and me just being one person, I had to be with him every minute of the day,' said Reid, 85. 'All I want is justice for my husband.'

Facility records show nursing home workers recorded that they were providing him with care during a period when he actually was in the hospital, and also after he had already died at the nursing home, Jacksonville attorney Tom Edwards said.

'When you're finding the kind of stuff we're finding in these records, you don't know if any of the care and treatment was being given,' Edwards said.
As bankruptcies and lawsuits plague these facilities, the burden of uncertainty affects the patients and their families, who worry about the quality of care and the possibility of sudden closings. How did it come to this, and is anybody doing anything to fix the situation? *

(NOTE:- The final question is easy to answer but the answer is challenging to a culture whose understanding of the world is built around a commercial concept linked to the rights of individuals in a free marketplace. Corporations assume the rights of the individual. Many ask the questions but no one answers)

South Carolina

COMMENT:- The full text of the long article below rehashes the whole issue again. There is no challenge to the market as a system for providing care. The only question addressed is how to fix the market.

Colleen Fuller studied the US system and its intrusion into Canada. She pointed out that this was clearly the wrong road and we should all be looking for another. Perhaps the USA is too close to see its problems clearly.

In the first 8 years of the 1990's it was accepted that smaller companies could not compete successfully in the consolidating corporate marketplace. Could it be that the not for profit and smaller homes which have survived, did so because they were "less" marketlike and did not follow market prescriptions.

Medicare cuts hurt nursing facilities;
The Post and Courier (Charleston, SC) June 11, 2000

CHAPTER 11 PROTECTION: The Balanced Budget Act of 1997 sharply reduced reimbursements for long-term-care homes

With an aging population and baby boomers set to reach retirement age in a decade, long-term-care facilities seem to have a bright future.

They just have to get past the present first.
Ironically, the cuts with the most impact came in Medicare, the insurance program for the elderly that accounts for less than 10 percent of the nursing home beds nationwide.

In another irony, the companies having the most problems are those with billion-dollar revenues. South Carolina's 26 bankrupt nursing homes, for instance, belong to two companies - Mariner Post-Acute Network Inc. and Integrated Health Services, both among the five largest in the nation.

In fact, four of the six biggest nursing home companies have filed for Chapter 11 protection since last fall. Those that have not are struggling with dropping revenues and falling stock prices.

Meanwhile, small companies are having an easier time, but few will say they're sailing calm seas.
But critics say the industry made its own bed by defrauding government programs and taking advantage of a liberal reimbursement system.
But industry critics say nursing home companies got themselves into their own mess by expanding too rapidly. They also say the industry shot itself in the foot through fraud.
"The amount of money made in the nursing home industry over the years has been tremendous," said Judy Murphy, founder of the Association for the Protection of the Elderly. "When they did have the reins pulled in, it caused them to topple."
Murphy seems resigned to the idea that the industry will get what it wants, but she reluctantly says, "I'm not so sure I'm against this." She fears more bankruptcies and closed nursing homes if changes aren't made.

"They're holding the federal government hostage," she said.
John Schaeffler, director of congressional affairs for AHCA, agreed with Benson's assessment that smaller companies, because they are more maneuverable, have had an easier time adjusting to the changes.

West Virginia

Nursing homes struggling financially
The Associated Press State & Local Wire July 5, 2000, Wednesday, BC cycle

When the parent company of 26 West Virginia nursing homes filed for bankruptcy protection in late June, it brought to 35 the number of West Virginia nursing homes in bankruptcy.
The Legislature has requested the creation of a task force to study long-term care, said Parker Haddix, chairman of the state Health Care Authority.

"Census is down. Reimbursements are down," Haddix said. "And we're only seeing the initial impact of the Balanced Budget Act. 1999 will give us a better picture. But it won't look good for nursing homes."
The federal Health Care Finance Administration requires states to develop disaster contingency plans when nursing facilities are at risk of closing when a parent company declares bankruptcy.

"This office is indeed conducting more monitoring surveys on facilities that are in financial difficulty," Wilkinson said. "We are required to assure that the financial viability or lack of viability of an institution does not affect patient care.

Homes may be in trouble Head of care facility group says many may go bankrupt
Charleston Daily Mail July 11, 2000, Tuesday

About half the operators of West Virginia's residential board and care homes are "on the verge of bankruptcy," Jim McCormick (West Virginia Care Home Association and an owner of nursing homes) told the Legislative Oversight Commission on Health and Human Resources Accountability.
Half (survey by McCormick) said they're considering filing for bankruptcy protection because they can no longer afford to pay for state-mandated regulations for the patients they keep in their homes, McCormick said.
That revelation comes after the news last month that one-third of the state's free-standing nursing homes have filed for bankruptcy. Genesis Health Ventures, which owns 26 nursing homes in West Virginia, filed for bankruptcy protection in June.
However, Delegate Lisa Smith, R-Putnam, said she took exception to the idea that patients in residential facilities receive the same type of care they get at nursing homes.

McCormick conceded that the quality of care varies at residential care homes. But he said since most residents there pay for their own care, they're free to leave if they don't like the service.


COMMENT:- This article extensively reviews the issues of bankruptcies, lawsuits, Medicare funding etc. The panel is drawn from all groups and the article holds up little hope that common ground can be found.

State panel tackles care crisis; --- Its mission comes as state nursing homes face bankruptcy from skyrocketing liability insurance.
Sarasota Herald-Tribune July 16, 2000, Sunday, ALL EDITIONS

Nineteen people have six months to solve some of the most vexing and expensive issues facing the state of Florida.

They are on a panel that will recommend by Jan. 1 how the state should deal with long-term care for the state's burgeoning elderly population. Named the Task Force on the Availability and Affordability of Long Term Care , a creation of the state Legislature, the group meets for the first time Monday.

Its task is daunting. And the critical nature of its findings can best be defined by two events that took place within roughly a month this spring.

On May 18, an 87-year-old woman died in a North Port nursing home after having been stung 1,625 times by ants, raising new questions about the quality of care at Florida's 700 nursing homes and 2,300 assisted living facilities.

On June 23, Genesis Health Ventures, which operates 21 nursing homes and five assisted living facilities in Florida, filed for bankruptcy. It was the sixth company to declare bankruptcy, meaning about 20 percent of the 82,000 nursing home beds in the state are being operated by a potentially insolvent firm.

COMMENT:- The study below is a definitive one disproving the belief in cost cutting and staff reduction - the formula for success in the early 1990's. As one reads later corporate statements it is clear that they may have heard the words but they have not penetrated the bony barrier between the ears and the brain. Their policies were in large part responsible for the findings. They have short memories. They now claim that the problems in care are due to underfunding and low unemployment in the community. Note that this study goes back to 1992 - long before either excuse existed.

The article below INCORRECTLY suggests that HCFA recommends a new federal standard of 2.0 CNA hours per resident day. According to Marvin Feuerberg, the author of the study and other sources, this is not true. There are no specific recommendations in this Phase of the study - but there may be in Phase II. Phase I does include data indicating that below 2.13 hours bad outcomes can be expected - which is what created the confusion for the author Robert Pear.

The New York Times July 23, 2000

Federal health officials have concluded that most nursing homes are understaffed to the point that patients may be endangered. For the first time, the government is recommending strict new rules that would require thousands of the homes to hire more nurses and health aides.

In a report to Congress based on eight years of exhaustive research, the Clinton administration says that understaffing has contributed to an increase in the incidence of severe bedsores, malnutrition and abnormal weight loss among nursing home residents. Many of the patients end up hospitalized for life-threatening infections, dehydration, congestive heart failure and other problems that could probably have been prevented if the homes had more employees, the report says.

Nursing homes with a low ratio of employees to patients are "significantly more likely to have quality-of-care problems," the study says, and "substantial increases" in staff may be required to ensure that homes do not endanger the safety or health of patients. The 200,000-word report is to be sent to Congress this month.

It recommends new federal standards to guarantee, for example, that patients receive an average of two hours of care each day from nurses' aides. It says that 54 percent of nursing homes fall below this "proposed minimum standard."

The quality of care depends not only on the number of nurses' aides, the lowest-skilled workers, who help feed and bathe patients, but also on the number of registered nurses and licensed practical nurses, who supervise the aides, the study says.

Accordingly, the report says that nursing homes should have enough registered nurses to provide at least 12 minutes a day of care to each resident, on the average. But, it says, 31 percent of nursing homes do not meet that standard.

The government emphasized that the proposed levels of staff were not the optimal levels, but the minimum needed to prevent patients from being exposed to "a substantially increased risk" of poor-quality care.
Federal researchers said they found that staffing levels were much higher at nonprofit nursing homes than at for-profit homes. Large nursing home chains that had financial trouble in the last two years, including chains that filed for protection under the bankruptcy law, have cut staff to control costs, the report said.

The cuts come when nursing home residents are typically sicker than in the past, with more serious disabilities. Hospitals have reduced the length of stays, releasing patients "quicker and sicker." Many people with less severe conditions, who might have gone to nursing homes 15 years ago, now receive care at home from visiting nurses and aides.

Nursing homes said it was unrealistic for the government to specify minimum levels of staff when it was providing what they called inadequate payments under Medicaid and Medicare, the programs for low-income people and those who are elderly or disabled.

In addition, nursing home executives said it was hard to attract and retain good workers in a booming economy, when the unemployment rate is at a 30-year low and other industries offer less demanding, better-paying jobs.

The American Health Care Association, a trade group for the industry, said it could not support "minimum staffing ratios" unless the government agreed to help pay the additional cost, which could total several billion dollars a year.

About 1.6 million people receive care in 17,000 nursing homes nationwide. Ninety-five percent of the homes participate in Medicaid or Medicare and are therefore subject to federal standards. But, the report says, the federal law and regulations are "too vague" to guarantee an adequate number of employees.
"More than half of the nation's nursing homes don't meet a minimum benchmark for staffing," Mr. Grassley said. "That means residents don't get fed enough. They don't get turned to prevent bedsores. They end up in the hospital much more often than they should."

The report found that nursing homes with low staffing levels tended to have large numbers of residents with nutrition problems. Many frail elderly patients need help with meals but do not receive it, and their health declines, the study said.

When employees are in short supply, they often prod patients to eat faster, forcing "huge spoonfuls of food into their mouths," so the patients cough and choke, the report said.

Statistics compiled by the government show that 47 percent of nursing home residents need some assistance in eating, and 21 percent are totally dependent on assistance.

To prevent severe bedsores, also known as pressure ulcers, patients must be turned or moved every two hours, the report said, but this is unlikely to occur in homes with low numbers of nurses' aides. The sores can become infected and damage underlying muscle and bone.

The General Accounting Office, an investigative arm of Congress, said last year that more than one-fourth of nursing homes had deficiencies that "caused actual harm to residents or placed them at risk of death or serious injury."

Charlene A. Harrington, a professor at the School of Nursing of the University of California in San Francisco, said, "Medicare payments are calculated on the assumption that nursing homes will have certain levels of staff, but the government does not require homes to have the amount of staff they are paid for."
Inspectors are supposed to make unannounced visits to each nursing home at least once a year to assess compliance with federal standards. But, the report said, patients "report a fear of retaliation from staff or other residents" if they express concern about the staff, and employees "have also voiced the fear of losing their jobs if they discuss staffing issues with the survey team."

If the first are to be last and the meek are to inherit the earth, the post-acute-care industry may be ahead of its time.
Modern Healthcare July 24,2000 Special Report

Among respondents to MODERN HEALTHCARE's first Post-Acute-Care Survey--an unscientific sample of 105 providers of skilled-nursing and assisted-living care, continuing-care retirement communities, home healthcare, long-term acute care, outpatient services and rehabilitation therapy--the largest companies are faring the worst.

Respondents were asked to supply financial and business data for 1998 and 1999.
Of 63 respondents providing financial data for both years, the biggest companies were the least likely to post year-to-year improvements in net income. They were also the most likely to report a bottom-line loss.
Even the few publicly traded nursing home chains that experts agree aren't in danger of bankruptcy lost large sums.
Different tiers. Among the top third of the 63 respondents with full financial disclosure, six posted positive earnings and seven reported a better earnings year in 1999 than in 1998.

By contrast, 17 of the 21 respondents in the middle group made money in 1999, and just over half improved their earnings from 1998.

The smallest 21 respondents performed similarly to the largest 21, with eight reporting a positive bottom line and five reporting better results in 1999 than in 1998.
For many skilled-nursing and assisted-living companies, aggressive growth in the mid- to late 1990s ultimately set them back. Bigger, in the end, wasn't better.

At least five national nursing home chains that a few years ago were on an acquisition tear are now in bankruptcy. Four were respondents: Vencor, IHS, Sun Healthcare Group and Genesis.
Medium-size companies, such as Chicago-based Alden Management Services, tend to fare better under the new system because they never created a high-cost system of care the way their bigger competitors did. They also didn't take on debt to support massive growth, debt that could no longer be supported once payments fell below expected levels.
More troubles. Assisted-living chains that had rushed to build housing for elderly residents in 1997 and 1998 also numbered among large companies with difficulties. Many of those companies are now taking losses on facilities they can't fill.


COMMENT:- Note the response of the nursing home industry to the studies showing understaffing and deficiencies -- GARBAGE IN, GARBAGE OUT --. The claim that many inspectors are "former, fired nursing home'' workers does not ring true. For years citizens groups have claimed that many inspectors are past or prospective nursing home employees. The incestuous links between them have rendered the oversight inspections ineffective.

The Commercial Appeal (Memphis, TN) July 30, 2000

When a nurse entered Walter Holst's room at Oakville Health Care Center, she thought he was dead, so she removed his oxygen tube and covered him with a sheet, a lawsuit alleges.
The case is one of about three dozen filed in the past five years against local nursing homes. Most allege wrongful death, malpractice or gross patient neglect. Seven cases involve two county-owned care facilities.

"There is an expectation when you go into a nursing home that you will receive a standard of care,'' said plaintiff's attorney Randall Fishman. " Many nursing homes have fallen way short.''

Two of every five nursing homes and skilled nursing centers in Shelby,

Tipton, Fayette, Crittenden and DeSoto counties examined in a just-released federal study had deficiencies that state inspectors considered potentially harmful. Problems ranged from failure to provide adequate nursing care to insufficient nutrition.

The eight-year federal study said understaffing at nursing homes has increased the number of bedsores, malnutrition and other health problems that often leave residents in worse shape than when they checked in. Many end up in the hospital for serious problems that could have been prevented.

The study, with rankings of nursing homes and deficiencies, can be found on the Internet at

The report is based on state nursing home inspections and self-reported information from nursing homes.

The federal study follows closely, at least in part, the findings of a June report by the National Citizens' Coalition for Nursing Home Reform. That organization reported that about one-third of the nation's 1.6 million nursing home residents suffer from malnutrition or dehydration and that about half need help eating.

The report said that "inadequate staffing, a lack of individualized care, high nurse's aide turnover and other structural factors within the nursing home setting contribute to the problem.''

The reports add to the troubles facing the nursing home industry.

Increasingly, families are suing. At the same time, the government has limited reimbursements and slammed the industry for failure to provide proper staffing of care centers. Some of the country's largest nursing home chains have been fined for fraudulent practices. Some have filed for bankruptcy.
"There's been a public outcry for better services and, as always, the politicians are going to respond to that outcry. There is what we in the industry proclaim to be an overreaction to the regulatory process.''

Richard Sadler, executive director of the Tennessee Health Care Association, called the federal comparison survey, "Garbage in, garbage out.''

He said the state acts as "jury, judge and prosecutor'' regarding inspection findings. There is a federal appeals process, but there is a huge backlog of contested cases, he said.

"The survey system has no independent process to look at outcomes,'' said

Sadler, who alleges that many inspectors are "former, fired nursing home'' workers.

Industry critics also cite problems with the inspection process, but many believe it is skewed toward the nursing homes.

Former state legislator Pam Gaia, who waged a long battle to improve

Tennessee laws governing nursing homes, said she still feels "there is not enough enforcement or fines placed on nursing homes that have neglect and abuse. We know there are inferior nursing homes but the state is not doing enough to enforce the standards.''
"It is just not an attractive business anymore with all the litigation and regulatory environment,'' he said.
Brian Reddick - a former lawyer for Arkansas-based Beverly Enterprises, the largest nursing home chain in the country - is the local representative for

Wilkes. He has offices in downtown Memphis in Pembroke Place.

"We have 110 cases in Arkansas and we just tried a case in Little Rock where we got a $ 3 million jury judgment. It is the most significant nursing home verdict in Arkansas and one of the largest in the country,'' Reddick said.

Reddick said his firm has about 50 cases pending in Tennessee, with 27 of them in Shelby County.

Reddick summarized the thoughts of a former insider: The main priorities for the large for-profit companies that own many nursing homes are to make money for shareholders and reward executives with big salaries.

"Somewhere down there at the bottom of the list are the residents of nursing homes.''

However, nonprofit nursing homes tend to put any money they make above and beyond the cost of running the home into caregiving or hiring more staff, Reddick said.
Attorney Al Thomas, who specializes in medical malpractice cases, said the main problem he has seen is a lack of proper nursing, most often manifested when patients develop decubitus ulcers, or bedsores.

New York

COMMENT:- Taxpayers pay for the care given to those who are old and frail so can no longer look after themselves. This article describes where the money goes. This has been a recurring complaint by nurses and citizens for many years.

FAT CATS FEEDING ON NURSING HOMES Medicaid payments help foot hefty salaries, records show
Daily News (New York) July 31, 2000

Private nursing home owners throughout the city are amassing personal fortunes, with some pulling in millions each year from government programs for the poor and elderly, a Daily News investigation shows.

The owners of 100 private nursing homes reaped nearly $24 million in salaries from their businesses in 1998 alone, according to state Health Department records.

Some of the owners also put their relatives on nursing home payrolls, giving them six-figure salaries in facilities that often contain only a couple hundred beds.

Owners of five nursing homes in the city drew more than $1 million each in salary in 1998. Virtually all the owners' profits are funded by taxpayers through Medicaid, the government program for the poor.

The disclosures come as nursing home owners are under increasing scrutiny in New York - home to the highest Medicaid bill in the nation.
Owner salaries and profits have caught the attention of the Pataki administration, which last month accused owners of trying to "line their pockets" with taxpayer funds by lobbying for increases in reimbursement rates. And Albany has cited owner profits as a major reason New York's Medicaid bill is America's highest.
Nursing home advocates have joined with union leaders in urging legislators to pass measures that would force owners to spend bigger chunks of their earnings on staff; the typical nursing home resident in New York City gets less than two hours of care per day. Nurses aides - who perform most of the backbreaking, often unpleasant work - are paid an average of $11 per hour.
Records show that the owner of the 240-patient Laconia Nursing Home in the Bronx drew $1.7 million in salary in 1998.

"It's a big business,'' said administrator Barry Braunstein, listed in state records as Laconia's sole owner.
Another nursing home owner, Veena Ahuja, received a salary of $1.2 million to run the 314-bed Holliswood Care Center in Hollis, Queens.
Veena Ahuja lives with her husband in a 16-room mansion with a pool and six bathrooms on 3.9 acres of cul-de-sac property in exclusive Old Westbury, L.I. Two cars - a 1998 Toyota spotted in the family driveway and a 1997 black Mercedes - are registered to the Holliswood nursing home.
"There were years when there were no profits and when there was no salary," said Dr. Ahuja, who sees patients at Holliswood.

"We came from India looking to make a good living and we have no complaint about it," he said. "We struggled through. We didn't inherit it. The credit goes to America, where you can struggle through and make something."
At the same time, state and federal investigators have begun to raise serious questions about the quality of care provided in city nursing homes.

In recent months, a half-dozen other nursing homes have been cited or fined for deficiencies that have placed residents in "immediate jeopardy."
Government investigators found that residents were assaulted and denied proper feeding and medical care. The U.S. Health Care Financing Administration has fined the home nearly $200,000.
At the Grand Manor Nursing Home in the Bronx, where the owners received $1.5 million, an aide said she makes $12 an hour caring for scores of elderly patients who require daily bathing and diaper changes.

"They keep it all to themselves," she said. "They don't want to share it."

Top 10 profits for private nursing homes in New York City in 1998:


COMMENT:- The next article is by Wilkes, the lawyer largely responsible for corporate angst in Florida. It illustrates the US mindset well. While he clearly identifies the corporate problem his solution is not to get rid of the problem. He sees the way government funds aged care as the problem.

Wilkes wants government to readjust the strings which make the market jerk so as to make it more competitive. If the market does not work then it is always because it is mot marketlike enough. Those of us outside the USA are in a better position to see what happens. In Australia we are not constrained by the US vision of the world. We can learn from their misfortune without copying their misconceptions.

The article analyses the collapse of the corporate chains well but this is repetition and I have not included extracts.

Sun-Sentinel (Fort Lauderdale, FL) July 31, 2000

With five of the largest seven for-profit nursing home chains currently operating in Chapter 11 bankruptcy, and with virtually all nursing home stocks at an all-time low, we are witnessing the virtual collapse of an industry that has been in existence (for all practical purposes) for fewer than 20 years.

What happened? And what does it mean for Florida?
With generous Medicare reimbursements, the growth in skilled nursing facilities skyrocketed. We went from a system of non-profit and faith-based "rest homes" to large, corporate-owned nursing home chains. The General Accounting Office reports that Medicare spending for skilled nursing facilities grew from $ 578 million in 1986 to $ 13.6 billion in 1998.

Florida in particular felt this growth more dramatically than the rest of the country, as we became a retirement destination. Additionally, the for-profit chains saw the state as a profitable market and, as a result, Florida has one of the highest ratios of for-profit beds in the country, at over 85 percent.

Unfortunately, along with this incredible growth came widespread mismanagement and fraud. This endemic corruption among for-profit nursing home owners was first made public in a 1995 GAO Report titled Medicare: Tighter Rules Needed to Curtail Overcharges for Therapy in Nursing Homes. Since that report, SEC filings of the for-profit chains document widespread allegations of Medicare fraud, insider trading and securities fraud, false claims, breach of fiduciary duty, and unjust enrichment.
Which brings us to the current state of the nursing home industry.

In short, we now have an industry dominated by large for-profit chains. It relies almost exclusively on the good fortune of massive government programs, with the lion's share of revenues coming from Medicare and Medicaid. As a result, operators and owners get paid regardless of the quality of service delivered. And, of course, this all takes place in an environment that is virtually without competition. (Try getting Medicaid to pay for at-home or alternative care.)

Big government spending, payments unrelated to quality of service and no real competition -- can we be shocked that this has lead to widespread corruption and inefficiency?

Florida has a chance to stop the bleeding. The Task Force on the Availability and Affordability of Long-term Care is examining this industry, where it has come and where it is headed. This is a rare opportunity to shape the future of long-term care in this state and improve not just the quality of care but the quality of life for our most frail and vulnerable citizens.

With more competition, a wider array of choices for consumers, and a greater accountability of providers, our state can become a model for others to follow.

Jim Wilkes is a Tampa attorney whose firm represents nursing home residents.


COMMENT:- The next article is a long one rehashing the federal nursing study with embellishments and examples.

Half of nursing homes short staffed, study says
Chattanooga Times / Chattanooga Free Press August 15, 2000, Tuesday

More than half of the nation's nursing homes are so understaffed they may be endangering the welfare of their patients, according to a new federal report.
Tennessee, like most states, requires nursing homes to staff well enough to provide two hours of care for each resident daily.

The report, prepared by the Senate Special Committee on Aging, found 54 percent of the nation's nursing homes staff at levels below what it considers minimum -- two hours.
"There was a bill introduced this year to up that standard, but it didn't go anywhere," Ms. Eads said. "It would have increased the minimum to 3.0 with an RN on duty around the clock."

It's a politically charged issue, she acknowledged. The majority of patients in nursing homes are covered by Medicaid, a state-administered financial assistance program.
A second planned part of the federal study will assess the potential costs of raising standards.

"Obviously when you increase staffing, it's going to increase costs," Ms. Eads said. "Then Medicaid would have to come up with money. That could be one of the reasons the bill died in committee. As you well know, money was a big issue in this past legislative session."


COMMENT:- Nursing home critics say that when chains complain about lawsuits and oversights it is a sure sign that they are forcing chains to divert more money from profit to care.

Pa.'s nursing homes more regulated than a nuke plant
SUNDAY NEWS (LANCASTER, PA.) August 20, 2000, Sunday

Nursing home and other health care administrators say their industry already is the most regulated in the nation.
As a result of resident abuse, negligence and other problems that have been found at nursing homes over the years, Pennsylvania's legislature already has enacted several laws.

The laws deal with resident abuse protection, criminal background checks of job applicants, whistle-blower protection for those who report problems, a nursing home resident's bill of rights and ombudsmen to serve as resident advocates.

Pennsylvania also has minimum staffing and skilled nursing care requirements. The state mandates that at least one nurse staff member serve up to 20 residents, and that at least 2.7 hours of care be provided to each patient per day.
"Mr. Casey (State Atorney General) got that experience firsthand when his father (the late Gov.

Robert P. Casey) was in a home," said Casey spokeswoman Karen Walsh.
In March 1998, Casey released "Residents in Jeopardy," documenting problems with state Department of Health procedures regarding complaints about nursing homes.
Federal law requires nurse aides to receive 75 hours of training and testing for competency within four months of employment, and 12 hours of in-service training each year.

In contrast, barbers and cosmetologists in Pennsylvania must have 1,250 hours of training, Walsh said.

"The myth is that they're unskilled labor," she said of the aides. "For many people, it's a calling. They don't do it for the money. What gets (to) them over time is not being appreciated, either by the administrators, the residents or the residents' families."
"Working short, or having a lack of staff, is the No. 1 gripe of nursing care workers," Walsh said.
Putting hiring concerns aside, Thompson (industry spokesperson) said she doesn't think having more people would solve all the quality-of-care problems at nursing homes.

"The number of bodies providing care doesn't translate into a better quality of care," she said. "You bring good people in and you give them support."


COMMENT:- Note that the chains defend their conduct by claiming that they are simply puppets on a string. They were "playing by the rules set out by the government". Is this why they lost their focus on care?

Note the view that the first thing to do is to "protect the nursing home industry." Surely the first thing is to turn it into a community mission rather than an industry and develop a process for phasing out corporate ownership.

The Stuart News/Port St. Lucie News (Stuart,FL) September 3, 2000

WASHINGTON - One of every four people who live in nursing homes in Florida is being cared for by a company in bankruptcy proceedings.
It's also a big deal in Washington, where the Senate Special Committee on Aging will conduct a hearing Tuesday to examine why five of the nation's top 10 nursing home chains have filed for Chapter 11 bankruptcy protection since September 1999.

"It's important to get answers before Congress considers giving more money to nursing homes.
Tuesday's hearing will explore whether states have plans to deal with displaced nursing home residents if chains declare a more drastic form of bankruptcy under Chapter 7 of the federal statute, which would force the companies to sell assets.
Most of the hearing's discussion, however, will be focused on why the big chains are carrying so much debt that they have to resort to Chapter 11 in the first place.
The policies were enacted after a scathing report from the General Accounting Office revealed in 1995 that nursing homes were dramatically padding their claims for Medicare reimbursement.

The report found that homes routinely marked up the claims they submitted for reimbursement, charged for services and therapy that wasn't necessary, and got repaid for services that were never performed. As a result, Medicare spending more than doubled from $4.8 billion in 1990 to $10.4 billion in 1993.
"Congress will realize that the 1997 cuts were far, far too deep, and if you're going to have nursing homes, you need to fund them adequately," said Towey, of the Florida Health Care Association.

Federal auditors have a different theory on why the industry is suffering.

In a report on the impact of the new Medicare payment policies, the GAO said in December that the Medicare cuts did not cause the bankruptcies.

Instead, the agency said the huge debt burden was mostly because of capital costs, such as rent and mortgage payments on nursing home buildings and payments on heavy equipment.
Government attorneys prosecuting Medicare fraud cases against nursing homes attribute the buying spree to swollen bank accounts filled by ill-gotten Medicare funds.

Civil attorneys are also suing nursing homes for neglect and abuse. They cite the industry's greed for Medicare money in the early 1990s as the reason the chains strayed from their original mission - caring for the elderly.
Nursing homes defend their position, saying they merely played by the rules set out by the government. The changes in the Medicare rules went too far, too fast.
On top of that problem, the inspector general of the U.S. Department of Health and Human Services concluded last year that more recently, nursing homes are being cited more often for deficiencies in quality of care.

The deficiencies include a lack of supervision to prevent accidents, improper care for bed sores, and lack of care to help residents with everyday needs such as eating and bathing.

The situation is causing people to question the future of nursing home care as a viable option for loved ones.
He (Wilkes) says the system should be reformed to a point where care of the elderly remains in the community, at "adult family homes" with no more than five residents
"The first thing we need to do is to make sure we protect the nursing home industry," said Gema Hernandez, secretary of the state Department of Elder Affairs and a member of the task force (in Florida).

But, she added, "my goal is to get money into community-based alternatives. That's it. I really would like to expand the dialogue. The dialogue right now is insurance companies, lawsuits and nursing homes. That's long-term care. My biggest challenge is to make sure (task force) members begin to define long care in a more open fashion."

Nursing home bankruptcies prompt call for aid; Critics say big chains
Austin American-Statesman September 4, 2000, Monday

WASHINGTON -- The nation's ailing nursing home industry is pressing for a new infusion of federal money as Congress returns to work this next week.

With one of every 10 facilities now in bankruptcy proceedings, Congress is expected to deliver $2 billion in higher Medicare payments -- the second boost in as many years -- to help the industry.
Even so, calls for more federal money have prompted questions about why the industry,- - - - - - - , soared on huge profits during the 1990s and then crashed last year. Eight of the major chains have sought bankruptcy protection.

The troubled companies blame budget-cutting by the federal government, which three years ago turned down the spigot on Medicare reimbursements.

The nursing home industry has run a $1 million public relations campaign to make its case that Medicare spending for skilled nursing facilities has fallen lower -- by $15.8 billion over seven years -- than Congress intended.
However, critics fault the big nursing home chains for creating their own crisis by overextending themselves and overcharging the government, even as they kept staffing so low that, according to a federal study, 54 percent of the homes fail to offer adequate care.

These conflicting views will be aired Tuesday when Sen. Charles Grassley, R-Iowa, holds a hearing of his Senate Special Committee on Aging to examine the cause of the nursing home crisis.
The General Accounting Office, the investigative arm of Congress, warned in 1995 of widespread overcharges by nursing homes. The accounting office cited a speech therapist whose pay was only $12 to $25 an hour but whose company billed Medicare for $600 or more per session.

Nursing home chains also have been investigated for billing the government for unnecessary blood tests, for double billing and for seeking payment for services that were never delivered.
Even critics of the industry are hard-pressed to reject the plea for more money. "We don't want these facilities to close because it would be a nightmare to move these residents," said Joshua Wiener, an expert on long-term care with the Urban Institute, a Washington research group. "They basically hold older people hostage because they're living in the facility."

James Wilkes, whose Tampa, Fla., law firm has filed 1,000 lawsuits against nursing homes alleging shoddy care, offers a harsh assessment of the industry.

"They've created their own crisis, and they're now playing on fears" by pressuring Congress for more aid, he said. "So far, the blackmail's working."

COMMENT:- The industry sees itself as the victim and makes dire predictions should they collapse. Many would consider this a blessing. The obvious solution seems to be that imposed on Vencor's Mount Carmel nursing home. Vencor were forced to bring in a non profit to run it and eventually buy it.

Nursing home industry appeals for restored funding
The Associated Press September 5, 2000

Government efforts to trim the growth of Medicare payments are wreaking financial havoc on the nation's nursing homes, industry leaders said Tuesday.

Already, five of the nation's 10 largest nursing home chains have filed bankruptcy, nursing home advocates said.

"Bankruptcies among skilled nursing facilities have reached an alarming figure," Dr. Charles Roadman II, president of the American Health Care Association, told the Senate Special Committee on Aging. "This is just the tip of the iceberg. Our long term care community is facing a squeeze with the real potential for absolute collapse."

Industry leaders are lobbying the government to increase the Medicare payments homes receive for patient care.
"The nursing home industry blames the government for its financial problems and wants more money," Grassley said. American taxpayers contribute $39 billion annually in federal money to nursing homes through Medicare and Medicaid, Grassley said.

Some nursing home companies are suffering from bad business decisions based on past practices where many Medicare reimbursements from the government were essentially unlimited, Grassley said.

"Their investors and bankers gambled on a vision of ever-growing government largesse," Grassley said. "They got hurt because this vision wasn't based on reality."

Laura Dummit, associate director of health financing and public health issues for the General Accounting Office, said her agency's study found that the new payment plan provides "sufficient - and in some cases, even generous - compensation for services furnished to Medicare beneficiaries."

Nursing home industry appeals for restored funding
Modern Healthcare The Associated Press State & Local Wire September 6, 2000
By JANELLE CARTER, Associated Press Writer

(NOTE:- This is identical to the article above but can be obtained from Modern Healthcare www site)

COMMENT:- The testimony below is a good review of the events already documented. It can be accessed on the wwww - -- its main features are discussed in articles later.

Federal News Service September 5, 2000, Tuesday


My name is John Ransom. Thank you for the privilege of speaking today.

I am currently employed by Raymond James & Associates as the Director of Healthcare Research. Formerly, I spent 10 years at First Union National Bank, the last eight of which I spent financing health care companies, including many hospital and nursing home companies.
I have volunteered to testify today to give the financial community's perspective on the developments in the industry. I hope the committee will appreciate that I have very little financial stake in the current status of the industry, which, hopefully, will lend some credence to my commentary.

Below, I have outlined a condensed "take" on the industry's evolution:

(Note that this can be obtained from the www address above. It is also commented on in subsequent articles)

COMMENT:- The next testimony is a long one. It can be obtained from the web address given and is summarised in press reports which follow.

he00192tGAO NURS HM 2000.pdf
Federal News Service September 5, 2000, Tuesday

Mr. Chairman and Members of the Committee:

I am pleased to be here today as you discuss the causes of the bankruptcies of large corporations owning nursing homes, particularly whether recent Medicare payment reforms affected the bankruptcies, and implications for nursing home residents.
In brief, our analysis indicates that aggregate Medicare payments for covered nursing home services likely cover the cost of care needed by beneficiaries, although some refinements to the payment system are needed
The problems experienced by some providers of nursing home and ancillary services are therefore the result of business decisions made during a period when Medicare exercised too little control over its payments.
We believe that Medicare SNF payments are likely to provide sufficient--and in some cases, even generous--compensation for services furnished to Medicare beneficiaries.
Even with the reduction in average payments per day under PPS, we see no evidence that beneficiary access to SNF care has been compromised.
Bankruptcy protection under Chapter 11 is designed to allow a company to continue operating, so a nursing home in bankruptcy can continue to care for its residents. However, a nursing home chain that does not emerge from a Chapter 11 proceeding will convert to a proceeding under Chapter 7, in which case residents of the chain's nursing homes would not be protected under federal law, because there are no provisions to do so. In a Chapter 7 bankruptcy, a company is dissolved and its assets are sold to pay its debts.
Many states have trusteeship (or receivership) laws that allow the state to intercede in a Chapter 7 bankruptcy proceeding involving a health care provider, delaying asset liquidation to protect patients. In such a case, a state court-appointed trustee continues to operate the facility until a buyer is found or until alternative care arrangements can be made for residents.
Although industry analysts and government officials expect that most public chains currently operating in bankruptcy will recover, it is important for states to be prepared to address nursing home closures, particularly in states where large numbers of nursing homes are operating in bankruptcy.

COMMENT:- This is a long article which reports the senate hearing and then discusses widely with many examples and corporate statements. It is sympathetic to the corporate position - this is an industry news magazine and has little to do with "care" as most of us think of it!

Nursing homes ask Hill for funds
Modern Healthcare --- The Washington Times
September 06, 2000, Wednesday, Final Edition
Kristina Stefanova; THE WASHINGTON TIMES

The nursing-home industry needs more funding to survive, health care industry leaders told a Senate panel yesterday.
The "long chain of chronic, systematic failures" is the result of federal government policies, Charles Roadman II, president of the American Health Care Association, told the Senate Special Committee on Aging.

"This is just the tip of the iceberg. Our long-term care community is facing a squeeze with the real potential for absolute collapse," he said.

But government officials insist that Medicare cuts are not to blame. Medicare is a federal program that pays for health care for the elderly.

The nursing homes' troubles are "a result of business decisions made during a period when Medicare exercised too little control over its payments," said Laura Dummit, associate director of health financing and public health issues for the General Accounting Office.
Sen. Charles E. Grassley, Iowa Republican and committee chairman, said there is little evidence Medicare reforms have jeopardized patient care.
But it seems the problem is that "their investors and bankers gambled on a vision of ever-growing government largesse," he added. "They got hurt because this vision wasn't based on reality."


Out on a limb
The Tampa Tribune September 17, 2000

The "crisis" for some of Florida's largest nursing home chains began with aggressive acquisitions fueled by expectations of quick profits.

They went down one by one. And each announcement brought headlines.
Bankruptcy is one of those words that get attention. Added to a list of nursing home troubles, including mounting lawsuits and rising liability insurance costs, it fueled a sense of panic about the industry.

In an April newsletter, Beverly Enterprises - which is not in Chapter 11 - quoted the head of Florida's health care agency saying nursing homes were in a state of "disintegration."

The newsletter went on to say: "Under-funding and over-suing have finally taken their toll on the state's 700 nursing homes. ... Florida officials are bracing for a potential wave of nursing home closures as early as this summer."

But summer has come and gone with no wave of closures.
But there's another question to be answered along with this one.

If the industry is disintegrating, why are so many nursing home companies not in bankruptcy?

A string of witnesses who appeared before a U.S. Senate committee helped answer both questions Sept. 5. They didn't all agree, but their comments made it clear the six major companies in Chapter 11 operated in a fundamentally different way from the rest.

THROUGHOUT THE EARLY and mid-1990s, the six built multimillion-dollar operations with money they received from Medicare and sold stock to the public with assurances the money would continue to flow.
The U.S. General Accounting Office first alerted Congress to signs of exploitation in 1995. Medicare payments to nursing home companies had tripled between 1990 and 1993 to $ 3 billion. "We found widespread examples of overcharges to Medicare for therapy services delivered to nursing home patients," the GAO reported.

It would take a while for Congress to get the message. Meanwhile, the companies continued to grow. Between 1990 and 1998, Medicare nursing home expenditures went up by an average of 25 percent per year, the GAO's Laura Dummit told the Select Committee on Aging, led by Sen. Charles Grassley, R-Iowa.

John Ransom, health care research director at Raymond James & Associates in St. Petersburg, laid it out to the senators step by step.

It started more than 10 years ago, he said, when the government cut back Medicare payments to hospitals, which, in turn, began discharging patients who still needed rehabilitation.

A group of "entrepreneurial" nursing home executives saw the opportunity to grow, Ransom explained, and began building special units for people who needed nursing and therapy services after surgery, strokes or other long-recovery conditions.

These new Medicare patients brought in $ 300 to $ 400 per day, Ransom said, compared with the $70 to $100 per day paid by Medicaid.
The big companies began acquiring the smaller ones. Genesis Health spent $ 1.4 billion for a company called Multicare. Vencor spent $ 2 billion for nursing home, therapy and short-term hospital companies. Integrated spent billions more on a collection of rehabilitation and home health companies. Most paid with cash, largely borrowed.

"In the mid-'90s," Ransom said, "there was a sentiment in the financial community ... that, you know, generous financing from the federal government would continue, even under a cost-based system."

The companies miscalculated.
Dummit told Grassley's committee they did it to themselves.

"The nursing home chains that have filed for bankruptcy in recent months have blamed the Medicare (prospective payment system) for their financial difficulties," she testified. "Yet our work indicates that the problems experienced by these corporations can be traced to strategic business decisions made during the period when Medicare was exercising too little control over its payments."

CHARLES ROADMAN, head of the American Health Care Association, a nursing home trade group, told the committee these companies were driven to bankruptcy court through no fault of their own.

They made "good-faith business decisions" through the high-payment years, then saw their revenues unfairly slashed, he said.

Not everybody, said Sen. Jack Reed, a Rhode Island Democrat on the committee. Not the smaller nursing home companies that were not publicly traded.

"Independent nursing homes seem to have fared better with respect to bankruptcy than some larger chains," Reed said.

The larger chains "had expectations of significant profits in a very quick time period," he said. "They're not getting it, and they're making a very conscious business decision that bankruptcy is the way to cut their losses."

Indeed, they're cutting their losses. Witnesses told the committee they're working out plans to repay primary lenders probably at about 50 cents on the dollar. And they'll probably sell many of their homes to smaller operators, if those operators can find banks to lend them money.
But it's time to turn off the hype and move on to the deeper problems.

New Jersey

The Record (Bergen County, NJ) September 22, 2000

Nursing home employees are crying foul over being forced to work overtime because so many of their co-workers have quit for better-paying jobs. Their bosses are begging politicians for more funds. And Congress is debating whether a receptionist or office worker should be allowed to help spoon-feed patients when there aren't enough nurse's aides to go around.

In Trenton and in Washington, it's clear that the issue of nursing home staffing shortages is coming to a head, with politicians being asked to attack the problem on numerous fronts.

On Thursday, Governor Whitman upset unions and patient advocacy groups by conditionally vetoing a measure that would have prohibited nursing homes and hospitals from forcing employees to work overtime, a practice that unions say has become routine at nursing homes plagued by job vacancies.
The union, which represents 100,000 nursing home workers nationwide, also takes issue with nursing home owners claims that they are unable to pay high enough wages because of Medicare cuts and chronic Medicaid underfunding.

McDonald pointed to recent congressional testimony from the General Accounting Office and Inspector General's Office, which laid the blame for the bankruptcies on the nursing homes business practices rather than on Medicare cuts, an assertion the industry disputes.
Though this bill only indirectly addressed the nursing home staffing issue, the state already has responded to the problem by approving an additional $ 20 million in Medicaid funding this fiscal year to pay nurses salaries, said Bill Conroy, deputy director of the state's senior services divisions.


Press Journal (Vero Beach, FL) September 27, 2000

TALLAHASSEE - Insurance companies are not just bailing out of Florida, but canceling nursing home policies nationwide as part of a mass exodus from the market, a survey released last week by state insurance regulators indicates.

Of the 23 insurance companies that are no longer writing insurance policies for Florida nursing homes, all are canceling similar policies nationwide. The flight of insurers from the business leaves only 17 companies insuring Florida nursing homes, according to a telephone survey conducted by the Florida Department of Insurance.
Its what we've always said. The losses come because of the poor quality of care, said Barbara Hengstebeck, director of the Coalition to Protect Americas Elders, a vocal critic of nursing home care. Their insurance premiums have gone up because of the lawsuits. Its a vicious cycle, but they are not leaving Florida because of the litigious climate, theyre leaving nationally.
State insurance officials shied away from linking the drop in insurance coverage to any single source, but suggested in a letter accompanying the report that quality of care issues need to be addressed.
According to the survey, 23 companies that have written insurance for nursing homes in the past three years have chosen not to do so this year. Seventeen companies are writing nursing home insurance policies.

Of those that no longer write insurance in Florida, all said they were leaving the market nationally. Such a wholesale exit, nursing home critics say, is an indication the nursing homes are facing tough times not just in Florida, but across the country.

Patients rights advocates say the survey findings validate their assertions that nursing homes are using high litigation costs as a red herring to secure liability protections from state lawmakers.

The Florida Health Care Association has been lying to state lawmakers and the press for two years, said Steve Vancore, an associate with the law firm of Wilkes & McHugh, which represents nursing home patients. They have said the problem is unique to Florida. This study shows it is not.

Elderly patients caught in long-term battle
The Tampa Tribune October 1, 2000

TAMPA - A fundamental fight between trial lawyers and nursing homes threatens to stall elder care reform efforts.

For three years running, the nursing home lawsuit debate has trapped state legislators between two powerful forces.

On one side are nursing home executives, who say lawyers are driving them out of business. On the other are lawyers, who say suing is the only recourse when people are hurt.

Facing calls for a special legislative session this year, the politicians instead created a task force to grapple with the central issue, known as tort reform.
"We can't let the focus be the litigation issue," agreed fellow task force member Ed Boyer, an elder-law lawyer in Sarasota. "We need more input from people not married to the nursing homes or the lawyers."

But demands for tort reform are squelching all other pleas. And decisions such as the $ 20 million judgment against a Pinellas County nursing home last week only make them louder.

"Tort reform is the elephant that sits in the middle of the room, and everything else is around it," said Larry Sherberg, a task force member who owns an assisted living facility in South Florida.

Once mostly political, tort reform talk now is driven by panicked, outraged owners of nursing homes and assisted living facilities who face massive increases in liability insurance premiums.

RATES ARE SOARING even for facilities that haven't been sued. Small family homes are having to pay as much as five times more. So are retirement communities that combine independent and assisted living with nursing care.
"There's bad facilities out there that should shut their doors," he said, "and we're all being punished because of it."

Dave Grofic, a task force member who runs a group of retirement communities in South Florida, said it's a matter of economics.

"Do I think (insurers) are charging more than they should? Yes," Grofic said. "Can I stop them? No. This is the system. It's the free-market system."

"We're in a profit business," said Raymond Thomas of Bunker Hill Insurance, a Texas company that underwrites insurance for nursing homes across the country.

"When a company has a lot of claims, it spreads the cost around," Thomas said. And there are a lot of claims in Florida.

"I'm not saying there aren't legitimate claims," he said. "Some homes deserve to be sued. But $ 20 million? Somebody's got to pay for that."
"You can't force a company to do something that's uneconomic," he said. "They'll just leave the market."
Florida Insurance Commissioner Bill Nelson polled the industry in May for details of the situation. But when his agency released results two weeks ago, it left more questions than it answered.

The report showed nearly two dozen insurers had left the state in the past three years, citing high losses in lawsuits. But a dozen or so still were writing or renewing policies. The report also showed those that left were giving up business nationwide, not just in Florida.

Nursing homes may see more Medicare funds
Reuters Sunday October 8
By William Borden

NEW YORK, Oct 8 () - U.S. nursing home operators, who have been left reeling because of cuts in government support and overly aggressive expansion, may see some relief -- more dollars from Washington.
Sen. Chuck Grassley (R-Iowa), who is chairman of the Special Committee on Ageing, wants to link the additional funds to improved care and an amelioration of a nursing shortage.

The current plan being negotiated in Congress would increase nursing home funding by $2 billion over the next five years. Taxpayers contribute about $39 billion a year in federal money to nursing homes through Medicare and Medicaid.


New rules guide senior care Rating system changes for nursing homes in Florida
The Florida Times-Union (Jacksonville, FL) October 11, 2000

Connie Bend said she felt terrible when the North Jacksonville nursing home she runs made Florida's most recent 'watch list' of homes with substandard inspections.

'It indicates something in our system broke down,' said Bend, administrator of Beverly Health & Rehab Center-Paradise Pines.

State complaint investigators in March found 9.5 percent of Paradise Pines' 167 residents developed bed sores. One man was hospitalized with a severe bed sore in March, and there was no evidence that staff had treated or even the sore until shortly before his hospitalization.
According to a new Florida system for rating nursing homes, where scores ranged from a perfect score of zero to the worst at more than 700, Paradise Pines isn't doing as badly as many of its counterparts. It scored a 98 -- only slightly worse than the state median score of 95.

Gov. Jeb Bush announced last week the state was using the new system, based on the last two years' worth of inspections, to crack down on poor-performing homes.

Officials started by canceling Medicaid contracts with six facilities that scored higher than 400.
Homes got points based on the frequency, amount and type of problems that inspectors found.


COMMENT:- The next article is Assisted Living where there have also been many problems. The rest of the article goes on to describe the owners history - the sort of people who see profit in aged care and chase after it.

Assisted living facilities in trouble
The Capital (Annapolis, MD)
Copyright 2000 Capital-Gazette Communications, Inc.
By NOI MAHONEY Business Writer

An Odenton company that operates four assisted-living centers in the county faces foreclosure next week on its Annapolis facility and is under state scrutiny for its patient care after a flurry of lawsuits.
The auction is the latest setback for the company and Mr. Wentz. In the last 16 months, they have been slapped with more than $800,000 in lawsuits.

Over the same period, the Maryland Department of Health and Mental Hygiene said it has received complaints against Colonial Manor Homes and Mr. Wentz.

"We received a number of complaints about the care of patients and it raised concerns for the care and safety of the residents at his facilities," said Carol Benner, director of licensing and certification for the state Office of Healthcare Quality.

"We're closely monitoring Mr. Wentz and his facilities to make sure patients receive proper care and service."



One-third of Colorado's nursing home residents are living in facilities run by bankrupt companies.

Residents include people who cannot speak up for themselves because of Alzheimer's or dementia, who can die of thirst because they cannot take a sip of water without help.

Yet the state's most frail citizens are relying for care on corporations facing huge debt loads, federal investigations for Medicare fraud and executives negotiating massive severance packages.
In Colorado, complaints about nursing homes to a network of ombudsmen leaped by a third last year to 12,812. State ombudsman Virginia Fraser blamed short staffing for many of the problems.
Not all the problem nursing homes in Colorado are bankrupt, but half the 58 bankrupt homes have been cited in the past two years for harming patients, according to state records:
While patients suffer, executives treated themselves to corporate jets, private gyms and, in one case, $40 million to a CEO who was running the company into the ground.

Even when the Justice Department or regulators can prove fraud or shoddy care, they are reluctant to crack down too hard for fear of closing too many nursing homes.

"We've tried to not force them out of business and not put people out on the street," explained Justice Department spokesman Charles Miller.

Does that mean bad nursing homes are getting away with it?

"Absolutely," says ombudsman Fraser.
Medicare payments to nursing homes jumped 30 percent every year from 1990 to 1997, according to witnesses at a September Senate hearing. Nursing homes collected up to $300 to $400 a day per Medicare patient, compared with $70-$100 for patients on Medicaid, the federal health care program for the poor.
But they built their empires on borrowed money.
Then Congress caught on, and in 1998 cut Medicare payments - - - - -
Now, the Justice Department is demanding hundreds of millions of dollars in refunds for mistaken overpayments and outright fraud.
But the $1.3 billion claim amounted to most of Vencor's assets of $1.7 billion. So federal prosecutors recently backed off, settling the claim with Vencor and an affiliate for $200 million rather than risk putting thousands of patients out on the street.
Another of the bankrupt chains, Mariner Post -Acute Network, is facing federal demands for $159 million to cover overpayments, fraud and penalties, the Justice Department said. Negotiations on a settlement are under way.
Sun Healthcare built a $77 million corporate headquarters in Albuquerque before losing $1 billion in 1999. The company has admitted in securities filings that it is the subject of a government investigation and a whistleblower lawsuit alleging fraud. It says it expects to repay at least $83 million in Medicare funds.

IHS also admitted in securities filings that it is being investigated by the government for possible Medicare overbilling and fraud.

Connecticut investigators found Sun improperly billed the government for luxury condos, a corporate jet and a $74,000 trip to Italy for staff.
Regulators and patient advocates agree with the industry that the main cause of nursing home horror stories is understaffing.

Quality of care drops dramatically when residents receive less than three hours of nurse and nurse's aide time per day, a recent federal study found. But that's the case at about 54 percent of the nation's homes.


COMMENT:- Buying political influence is big business in the USA. Not surprisingly politicians in Florida are making a killing. How different are we in Australia?


The government Medicaid program pumps more than $1.4 billion yearly into Florida nursing homes, most of them owned by private corporations.
There's big money involved in the upcoming legislative session, when Florida lawmakers have vowed they will tackle the "long-term care crisis."

So it's not surprising the two groups with the most to lose -- trial lawyers and the nursing-home industry -- already are preparing for the fight as they fine-tune arguments and give money to candidates.
Wilkes said he is putting as much as $1 million of his own money into the political process and pet projects related to nursing-home reform.

Two political action committees with an interest in nursing-home legislation, the Florida Lawyers Action Group Trust and the Florida Health Care Association, have spent $1.7 million on campaigns since the start of 1999.

At the same time, corporate nursing-home chains are funneling cash into campaigns, as well as through Florida Health Care's political action committee. Seven of the state's largest for-profit care providers have spent a total of $181,654 in the 2000 election cycle.

Yet three of these seven -- Integrated Health Services, Mariner and Vencor -- have filed for bankruptcy during this same period, claiming lawsuits coupled with limited Medicaid reimbursements are driving them out of business. Another one, Extendicare, has been liquidating most of its Florida homes this year.
Hugh Gladwin, director of the Institute for Public Opinion Research at Florida International University in Miami, says Florida voters are unhappy but not surprised when they learn the amount of money the nursing-home industry pours into Florida campaigns.

"People think that this money does buy votes and there is a great deal of cynicism about that," Gladwin said. "The public's focus in regards to the nursing-home interests may end up not being all on tort reform. Maybe some of it will be on campaign reform."

COMMENT:- Many chains lease facilities. Some have formed REITs to own the facilities they run and then lease them back. When the chains are in trouble then the REITs are threatened too.

Changes in Government Policy Take a Toll on Health Care Properties
National Mortgage News October 30, 2000

The healthcare real estate sector has been hard hit by bankruptcies among healthcare providers and operators, partly as a consequence of changes in government policy relating to healthcare reimbursement with the introduction of the Prospective Payment System (PPS).

A number of healthcare REITs have also seen their credit ratings lowered by the rating agencies this year.

Moody's Investors Service, for one, has taken recent negative rating action -either revising the outlook for debt, or outright downgrading of debt ratings - on healthcare REITs such as Nationwide Health Properties, LTC Properties, Omega Healthcare Investors, National Health Investors and Healthcare Realty Trust.

Is Staffing the Key to New Dollars?
Nursing Homes November 1, 2000

"We will provide adequate staffing if you give us the money" could become the new industry argument for more Medicare and Medicaid dollars--a welcome option, since Medicare problems caused by the hated 1997 Balanced Budget Act (BBA) have been painfully obvious for the past three years. In recent weeks lawmakers from both sides of the political aisle, from Senator Charles Grassley (R-IA) to Congressman Henry Waxman (D-CA), have suggested tying additional reimbursement to hiring of staff to deliver better resident care. Of course, the question will always remain: Are sufficient personnel available?

Not to be "outstaffed" by Congress, President Clinton got into the act, and in the process reversed his earlier emphasis on more frequent inspections and stiffer civil money penalties.

In his weekly radio address to the nation on September 16, broadcast from The Washington Home, a nonprofit facility in the nation's capital, Clinton launched a new program.
* Create $ 1 billion in competitive grants over five years to boost staffing levels.
* Impose immediate penalties on nursing facilities placing residents at risk and reinvest these funds in the new grant program. Also, to enhance consumer awareness, Clinton would require facilities to provide the Health Care Financing Administration (HCFA) with detailed information on their current staffing levels, - - - - - - -
Although at loggerheads with the Clinton administration over its July 1998 Nursing Home Initiative, which emphasized enforcement, the industry reacted to the president's newest initiative with guarded optimism.
Leap-frogging HCFA on the staffing issue, Clinton's plan came as a surprise.
More money would be pumped into the Medicare system under the Skilled Nursing Facility Care Act of 2000 (S3050) introduced by Senators Orrin Hatch (R-UT), Judiciary Committee chairman, and Pete Domenici (R-NM), Budget Committee chairman.
Despite the fact that the congressional General Accounting Office (GAO) has continued its "no need to worry" mantra, Hatch, in introducing his bill, noted that 7 of the 93 nursing homes in Utah are operated by Vencor and have filed for Chapter 11 protection. He said, "Clearly, we need to be concerned about the prospect of these nursing homes going out of business, and the consequences that such action would have on all residents--no matter who pays the bill." Added Domenici, "In my home state of New Mexico, the number is nothing short of alarming. Nearly 50% of the nursing facilities are in bankruptcy."

While the GAO might say that bankruptcies aren't a problem nationally, in certain areas of the country, some very powerful members of Congress would disagree.

COMMENT:- The next article is mostly about stocks and shares - which are still worth buying --- No comment made about the huge payouts to the CEOs, or the fact that these companies have been found guilty of fraud. Just a view from the markets. It assumes that investors have no interest in these matters. This approach discourages investors from stepping outside the market world and looking in. Talking about human suffering, ethics and fraud might encourage them to become socially conscious in their investments. I have not included extracts as it is repetition.

Nursing Homes, Stung by Politics
New York Times November 5, 2000

Hospitals to gain regardless of U.S. election outcome
Reuters November 5, 2000
By William Borden

NEW YORK () - Hospitals and nursing homes, after suffering from federal budget cuts over the past two years, are expected to get more money from Washington no matter who wins Tuesday's presidential elections, analysts said.

"I don't think it really matters for the hospitals who wins the presidential election," Lehman Brothers analyst Adam Feinstein said.

Vice President Al Gore and Texas Gov. George W. Bush have focused much of the political debate on reforming Medicare and extending its coverage for pharmaceuticals.
"Everybody wants to give money back to providers, it's just other issues that get in the way," said Nancy Weaver, analyst at Stephens Inc.
Weaver said a win for Bush, the Republican nominee, means less money from Washington compared with Democrats. But Bush would be expected to maintain a Republican tradition of fewer regulations.

Democrat Gore would provide hospitals and nursing homes more funds than a Republican administration, but with regulatory strings attached, she said.

Insurance bills pinch nursing homes ::: Care-center residents and taxpayers will feel the effects, the industry insists.
The Des Moines Register November 6, 2000, Monday

Iowa's nursing homes say that skyrocketing insurance rates threaten the quality of care they provide for residents.

Liability insurance for nursing homes throughout the nation is increasing as much as 500 percent. Iowa homes that two years ago paid annual premiums of $ 125 per bed are now faced with premiums of up to $ 500 per bed.

Ken Opp, the administrator at the Abbey, a Des Moines nursing home, learned last week that his insurance costs will soon triple, from $ 30,000 annually to $ 90,000. "I expected some sort of an increase," Opp said, "but when the broker told me today what the new rate is, I just about came out of my chair."
Steve Ackerson of the Iowa Health Care Association said it's too early to say what sort of legislation his members will push for. "We're still gathering information," he said. "This is an issue that has cropped up just in the past six months."
WHY: Critics say fraud and corruption by some nursing homes is to blame. Nursing homes say it's because of big lawsuits against them.

Bankrupt, and without a plan; As nursing home industry continues to founder, most ailing chains still seek funding
Modern Healthcare November 6, 2000, Monday

It's been more than a year since the first of five of the country's largest for-profit nursing home chains filed for bankruptcy protection, but only one has come up with a plan to right its financial ship.
The key for the bankrupt nursing home providers will be how much of their collective $12 billion in debt their creditors will forgive and how soon, according to the S&P analysis.

And S&P is not alone in that assessment. "The view overall is negative, and it's not really as a result of (the Balanced Budget Act of 1997). It's a result of staffing and labor pressures," said Robert Wetzler, a long-term-care analyst for the Fitch credit-rating agency in New York.
The litigation and labor issues both relate to the same point--quality of care concerns are driving up costs, said S&P's Kaplan.
Lower selling prices for distressed Florida homes could be a boon to smaller providers looking to expand, but they better not count on any bank loans.
Of the five chains that have filed for bankruptcy, only Louisville, Ky.-based Vencor has submitted a reorganization plan to bankruptcy court.

COMMENT:- The relationship between regulators are nursing homes are often very close. In Oklahoma the senior regulator is in prison for taking bribes from a nursing home chain. Here is another example in Colorado. Notice that the present regulator replaced one who was fired for being too stringent. One wonders if the corporate lobby had anything to do with this.

This is a long article which gives many examples of poor care and regulatory failure.

DENVER ROCKY MOUNTAIN NEWS November 19, 2000, Sunday

Colorado has not shut down a nursing home since 1988.

Instead of closing problem homes, the state Health Facilities Division has used temporary managers and threats of closure to insist they clean up.

Even when the division has found violations causing death, it has not pulled a license since Paul Daraghy became director in 1990.

Daraghy and his deputy, Janell Little, were suspended last week after they reported that they were under federal investigation. They have not returned calls for comment. The FBI has asked former employees of the division about possible bribery in exchange for improved inspection reports.

Daraghy replaced Mildred Simmons, who was hired by Gov. Roy Romer to crack down on problems and was then ousted, Simmons said, for being too stringent.

"They hired me to put in a strict enforcement program, so nursing homes would be in compliance," Simmons said. "Protection of the elderly was our prime purpose."

Daraghy was Simmons' deputy when she arrived in 1987, but he soon transferred to another state department. "He thought I was too enforcement- minded," Simmons said. "He was hopeful that I wouldn't last long."

He was right. She lasted three years. Daraghy replaced her and promptly changed policy.

Stockpickers Move Back To Senior Housing
Business Week November 20, 2000

After a serious downturn, the sector is perking up

The graying of America ought to mean great prospects for the elder-care industry. But the two main areas -- assisted-living communities and nursing homes -- have been in the doldrums for two years. Now, a turnaround may be in the making.

One sign is that shares of Sunrise Assisted Living, the Rolls Royce of the assisted-living group, shot up 33% in four days, to $ 28.38, after the company disclosed improved profits on Nov. 1. Earnings could soon turn up for nursing-home stocks, as well. Last month, Merrill Lynch gave Manor Care, one of only two nursing-home operators still solvent, a buy recommendation.

COMMENT:- The next article challenges the claims that financial problems are not compromising care. The last two paragraphs describe some of the reasons why not for profit facilities are so much better than for profit.

Nursing home crisis escalating; Families decry conditions; industry fights to improve
The Dallas Morning News December 3, 2000, Sunday THIRD EDITION

Carolyn Mitschke says she's glad that Texas and federal officials are working to end neglect and abuse in the state's nursing homes. But she's not cheering yet.
"If the state had done enough, my mother wouldn't have gone through what she did," said Ms. Mitschke of Cedar Hill. "My mother had bedsores down to her bones - that's not enough of a change. There is no way it's enough."

Despite a campaign of intense scrutiny and stronger regulation of the nursing-home industry, workers, regulators and residents' families say horror stories still are unfolding in Texas nursing homes, which care for an estimated 94,000 people.
* More than half of Texas nursing homes were found, in state inspections over the last 2 1/2 years, to have harmed residents through abuse or neglect, or placed their lives or health in jeopardy. An Oct. 31 report by the minority staff of the U.S. House Committee on Government Reform showed that only 16 percent of Texas nursing homes were in full or substantial compliance with federal regulations, based on recent inspections.

* Complaints to nursing home ombudsmen increased by about 67 percent in the last two years; about 86 percent of the complaints were substantiated by state surveyors, according to the Texas Department on Aging, which runs the ombudsman program.

* A strong economy and low Medicaid reimbursement rates are pushing staff shortages to dangerous levels.

* Civil judgments - including multimillion-dollar awards to patients and their families - continue to pile up. Some nursing home companies have cited judgment costs in their decisions to quit doing business in Texas.

* Most insurance companies have quit writing liability policies for Texas nursing homes. Premiums have increased at least tenfold in the last few years. Some homes are now going without liability coverage, meaning that one substantial lawsuit judgment could shut them down.

* Since January 1999, at least 18 nursing home companies, which own or operate 22 percent of the state's 1,138 homes, have filed for bankruptcy. They include some of the largest operators in the state. Before 1999, officials could recall only one bankruptcy of a relatively small company.

* If the bankrupt companies cannot reorganize to stay afloat, the Department of Human Services would have to temporarily take over dozens of homes. Mr. Lehrman says there's a chance of at least one major company going under. Because the state "is not in the business of running nursing homes," he said, his agency would close as many as it could, as quickly as possible.

* More than half the members of a Texas nonprofit nursing home association said in a survey released last week that they may have to shut their doors within the next five years. - - - - - - -

* Resident advocates and regulators say that management spending by larger nursing home companies, including those in bankruptcy, worsens other financial problems.
Still, "it's real frustrating," he said. "In the last three years, we have initiated more punitive actions than ever before in the history of this program. We have moved to revoke more licenses, made more referrals to the attorney general than ever before. But we periodically go out and find people with big bedsores, people who are malnourished or have been sexually abused.
Among the conditions investigators saw between March 1998 and August 2000 in 680 homes were untreated pressure sores, accidents that had caused an injury and cases of poor nutrition or serious dehydration. In most of those homes, which make up 55 percent of the state's total, more than one resident had been harmed or put in jeopardy by such conditions.
One goal of Texas' 1997 legislation was to put bad operators out of business rather than continue the "yo-yo" effect of operators repeatedly fixing problems then lapsing back into noncompliance. In the last five years, 91 Texas facilities have been recommended at least five times for cutoff of Medicare and Medicaid funding.
"Regulation has never been the answer to quality of care and never will be," said David Marks, a Houston lawyer who has taken nursing homes to court as a prosecutor, assistant attorney general and, for the last 20 years, as a plaintiffs' attorney. "The fines are regarded as a cost of doing business to a habitual violator."
But residents' advocates, nursing home workers and plaintiffs' attorneys say the real tragedy may be how few cases of abuse and neglect - including fatal ones - are detected.
Social worker Carolyne Gray has dealt with nursing home patients and their families, in hospitals and other acute-care facilities, for more than 30 years. She says the situation is getting worse.

"There is no social worker that is still being an advocate for the elderly who is not saying this is a nightmare," Ms. Gray said. "And it's happening in rich America."
"If we're going to demand a high standard of care for residents of nursing homes, then it is incumbent on the state to reimburse care at a commensurate level," he said.
But patient advocates say that although low Medicaid rates and staff shortages are real, they aren't the whole problem. Management spending, including high executive salaries, is another problem, they said.

"No matter what happens, the big executives always end up with a lot of money," said Beth Ferris, legislative representative for Texas Advocates for Nursing Home Residents. "And the public is unaware of where the money goes."
A nurse aide at one of the company's Dallas homes said she is often short of basic supplies.

Recently, the worker at Professional Care Center said, "I went to every floor to find soap, and I ended up having to use one resident's shampoo to wash people." She asked that her name not be used because she fears losing her job.
But Mr. Lehrman of the Department of Human Services said that, with more and more homes owned by large chains,

multiple layers of management tend to eat up dollars that could be going for care.
Nursing-home officials said low reimbursements and lawsuit costs, not excessive management costs, are reducing money for direct care.

"It's been like the Holy Grail in the health-care industry to suggest that nursing homes or hospitals shouldn't make profits," said Mr. Longo, the chairman of the Texas Health Care Association. "To fill the need that nonprofits haven't [filled], for-profits are in the business. And for them to buy or build the nursing home, they need to attract capital and show a return to shareholders."

(NOTE:- What a remarkable statement - Not for profits were filling the need. It was the advent of Medicare and Medicaid funding which attracted corporate chains and precipitated a shift from meeting need to competing for profit. They forced not for profits to divert money and staff from the business of care to the business of market competition. In the market which they created they had to do so to survive.)

According to the 1998 Texas Medicaid Cost Report - the latest available - daily per-patient spending by for-profit homes on direct care and food trailed that of their nonprofit counterparts. Nonprofits, on average, spend almost twice as much on employee benefits and have 28 percent lower staff turnover.

Mr. Longo said tax breaks and charitable endowments for nonprofits help explain those differences.

Mr. Latimer, president of the nonprofit nursing home group, said nonprofits, many of which are run by religious groups, foster "an attitude in the employees that you do what you have to do to take care of the residents.

COMMENT:- Citizens groups concerned for the welfare of the aging had examined Bush's track record in Texas. This is why they supported Gore - as the lesser evil.

Hospitals to get less scrutiny under Bush-analysts
Reuters Friday December 15
By William Borden

NEW YORK, Dec 15 (Reuters) - U.S. hospitals should see less government scrutiny in the next four years than they did in the last eight, securities analysts said.

When President-elect George W. Bush takes office in January, Banc of America Securities analyst Gary Taylor said, the regulatory environment should be more favorable to hospitals than it has under U.S. President Bill Clinton.

Merrill Lynch analyst A.J. Rice said the Clinton administration took a very ``confrontational'' approach to hospitals.

``I don't see the scrutiny going away,'' he said, ``but I see the tone changing of how the investigations are conducted.''

Marking the end of what they called the Clinton administration's aggressive oversight of the hospital business, analysts said, was HCA Healthcare Corp.'s $95 million settlement of criminal charges with the Department of Justice, in addition to $745 million in a previously announced deal to resolve several civil charges.

HCA's Columbia Management Cos. and Columbia Homecare pleaded guilty to several charges related to Medicare billing and the company's outpatient laboratory and home health operations under the settlement.
Under the Bush administration, the health-care industry will still have to contend with ``whistleblower'' lawsuits that allege violations. The government has the option to participate in those suits, if they are deemed to have enough merit.


Nursing home hopes fade on liability
The Florida Times-Union (Jacksonville, FL) December 19, 2000

The nursing home industry saw its hope for lawsuit relief dim yesterday, when a state task force reviewing the issue couldn't agree on what to suggest the Legislature do.

'The problem we see is if they didn't have the political will to do it . . . it would be difficult for the Legislature as well,' said Karen Torgesen, president of the Florida Association of Homes for the Aged, which represents non-profit facilities.
Task force members particularly disagreed on what to recommend about nursing home litigation.

So the task force agreed to simply send the report, without its approval, to the Legislature, along with their individual recommendations.
Ken Conner, a Tampa lawyer and task force member appointed by the attorney general, said the nursing home industry ruined its own chance at reform. The industry pushed for the report to include language preventing punitive damages from nursing home litigation, Conner said.

'I think the industry was guilty of the worst kind of overreaching, and in so doing caused the process to fail,' he said.

Bad news for post-acute-care
Modern Healthcare January 1, 2001, Monday
Vince Galloro

Louisville, Ky.-based Vencor could be the first of the downtrodden to emerge from Chapter 11 later this month.

How the bankruptcy court treats Vencor, and how much of a discount off its crushing debt creditors will give the company in return for its equity will set standards for the other Chapter 11 providers: Genesis Health Ventures, Kennett Square, Pa.; Integrated Health Services, Sparks, Md.; Mariner Post-Acute Network, Atlanta; and Sun Healthcare Group, Albuquerque. If Vencor can become a going concern again, the stage could be set for the others.
Nursing home operators will find themselves under increasing pressure from two sources to raise staffing levels.

The first will be talk of federal minimum staffing standards.
The other source of staffing pressure will be the patient liability lawsuits that are plaguing nursing homes, particularly in California, Florida and Texas. Plaintiffs' attorneys are targeting staffing levels as an indicator of quality. Along with raising the cost of liability insurance, expect the litigation to compel some homes to add staff.

But then there's the other bad news: There are hardly any nurses to be had, anyway.


Fla. Ct. Says Wrongful Death Act Does Not Limit Damages in Nursing Home Cases
Nursing Home Legal Insider January 2001

Ruling on a divisive issue among the Florida courts, the Third District Florida Court of Appeal has determined that damages for the pain and suffering experienced by a nursing home resident prior to his death are recoverable by the resident's estate under the state nursing home statute. The ruling represents a significant victory for the plaintiffs' bar because such claims are excluded under the state's Wrongful Death Act.

Surveys fail to Protect Nursing Home Residents from Abuse
by Gary R. Ilminen, RN January 2001
Author of "Consumer Guide to Long-term Care" (University of Wisconsin Press)

Note:- This article provides figures to document the failure of regulation and oversight to effectively address problems in care at nursing homes. It urges relatives to act to protect family members and describes the options available to them. Many elderly do not have family members on hand. Do we want an aged care system in Australia where citizens have to be warned to protect their families from being neglected by those entrusted with their care?

CLICK HERE to read the article

Healthy Earnings Seen for Hospitals
REUTERS January 3, 2001

NEW YORK (Reuters) - For-profit hospital and nursing home operators are likely to see better profits due to higher admissions and funding levels from health maintenance organizations (HMOs) and the federal government, analysts say.

``Fundamentally, these companies are very strong,'' said Oliver Marti, health care portfolio manager at Columbus Circle Investors. Marti is concerned about the valuation of the stocks, but said the environment for hospitals has improved from 1999.

``The key is really that these hospitals have improved their technology and their facilities,'' said Vivian Liu, analyst at Iridian Asset Management.

This has been an essential part of improving admissions, she said.
Beverly Enterprises Inc and Manor Care Inc, the two remaining publicly traded nursing home operators that are not in bankruptcy, are also expected to show profit gains as the Medicare funding climate improved over a year ago.

Analysts blamed a drop in reimbursement rates for pushing many nursing homes into bankruptcy.

COMMENT:- A number of states were obtaining federal funding for Medicaid and then not using that funding for the care of citizens.

HHS Issues Upper Payment Limit Regulation
U.S. Newswire 5 January 20001

WASHINGTON, Jan. 5 / / -- The U.S. Department of Health and Human Services today finalized a rule closing a loophole in Medicaid regulations costing federal taxpayers billions of dollars without commensurate increases in coverage or improvements in the care provided to Medicaid beneficiaries.

The final regulation revises Medicaid's "upper payment limit" rules, ending certain accounting techniques to inappropriately obtain extra federal Medicaid matching funds that are not necessarily spent on health-care services for Medicaid beneficiaries.


COMMENT:- The next article explores the whole issue of lawsuits.

Note the use of "charting parties" to doctor medical notes. Tenet/NME was the first company shown to hold "charting parties" for doctors to alter notes so that they could charge more. The US Securities and Exchange Commission took out injunctions prohibiting the practice. This sort of thing is difficult to prove and we can only guess at the extent of the practice.

Note the very interesting comment by a lawyer (Carruthers) which accepts as undisputed that political decisions go to those who can spend the most money influencing politicians - the wealthy. This is the world's leading democracy! The large numbers of lobbyists who have unobtrusively polpulated the corridors in Canberra suggests that we do the same in Australia - a little less brazenly.

Nursing home fight

Last March, Florida's powerful nursing home industry was on the warpath. Nursing home operators were lobbying the Legislature fiercely for restrictions on lawsuits - - - - -
Republican legislative leaders were torn between giving business groups what they wanted and not offending elderly voters.

During the meetings, insults were traded. At one point, Wilkes stormed out of the room, but Thrasher ran out and persuaded him to return. The two sides managed to reach tentative agreement on limiting legal fees. But the talks broke down over damage caps and other lawsuit restrictions, and Wilkes & McHugh walked out again. The all-out political battle resumed. The Legislature ended up taking no action.
The nursing home industry and its allies have renewed their drive to restrict abuse and neglect suits, which they say jeopardize the survival of the states 746 nursing homes, serving 84,000 residents.
If we allow these outrageous suits to continue, there wont be any nursing homes left that can afford insurance, says Andrew McCumber, a prominent nursing home defense attorney and partner at the six-attorney Quintairos McCumber Prieto in Tampa. Putting caregivers out of business is not the way you improve care.

But Elma Holder, founder of the National Citizens Coalition for Nursing Home Reform in Washington, D.C., says lawsuits play an important role in protecting vulnerable residents. They create a deterrent for nursing homes that think they can get away with abuse and neglect, she says.
The 65-year-old McCorkle, a retired trucker diagnosed with Alzheimers disease, suffered from starvation, dehydration and gangrenous bed sores during his stay from 1997 to 1998, and died soon after. His familys attorneys presented evidence that the nursing home lacked enough nursing aides and that the facility altered its records to make it look like it had provided care that actually was never delivered.

The jury hammered the owner, Milwaukee-based Extendicare, with the largest nursing abuse and neglect verdict in Florida history -- $3 million in compensatory damages and $17 million in punitive damages. The extreme verdict will have helped even if just one patient receives better care as a result, a juror told the St. Petersburg Times after the verdict. Extendicare, which operates 282 homes in the U.S. and Canada, plans to appeal.
This type of outrageous behavior isn't unusual at many, many nursing homes, Wilkes says. If this kind of thing were taking place in someone's private home, they would be arrested.
Wilkes & McHugh currently has nearly 1,000 suits pending against nursing homes on behalf of residents allegedly killed or injured by negligent nursing home care. Half have been filed in Florida. It also has sued facilities in Arkansas, Alabama, Tennessee, Texas, Georgia and Mississippi.

Wilkes, who teamed up with McHugh after they graduated from Stetson University law school in 1983, initially concentrated on general civil litigation and medical malpractice. But in 1989, he accepted a case involving an 89-year-old woman who had died in a nursing home, her body riddled with large bedsores.
The resident bill of rights was enacted in 1976 in the wake of a grand jury investigation that documented horrifying quality problems in Miami-Dade County nursing homes. Twenty-one other states, including California and New York, have similar statutes. The Florida law has become key to abuse and neglect litigation -- and the target of industry wrath.

The law established rights to privacy, freedom from abuse, and dignified treatment. Four years after its passage, the Legislature gave residents and their families additional rights to sue facilities which infringe on any of the original rights, and to recover legal fees over and above damage awards.

Wilkes & McHugh relies on both the resident bill of rights and negligence law in its abuse and neglect suits. One of its top guns is Kenneth Connor, who was hired as of counsel attorney in 1997. Connor has been suing nursing homes successfully since the early 80s.

Two years ago, Connor represented the family of a 65-year-old man who died from malnourishment, dehydration and infected bed sores after living in the Brian Center Nursing Care Facility in Tampa.
Connor demonstrated that the Brian Center nursing director had warned the owner that there weren't enough staffers to provide proper care. Connor also showed that when staffers learned that state inspectors were coming, they would gather for charting parties, during which medical records were altered to make it appear that professional standards of care were being met. Connor found this out when he subpoenaed staff time cards and noticed that some staffers supposedly updated medical charts on their off days.

High-profile victories like this have resulted in Connor and Wilkes being invited regularly to speak before congressional and state legislative committees addressing nursing home issues. Their standard message: To boost profits, nursing home companies are endangering residents by short-staffing facilities.

[Corporate owners] are more interested in the bed than the patient, says Connor, who in September was named president of the politically conservative, Washington, D.C.-based Family Research Council. Since his appointment, Connor has reduced his caseload at Wilkes & McHugh. A bed means a revenue stream. What they forget is that these are human beings.
But some studies suggest that nursing homes generally have themselves to blame for climbing liability costs. Last July, the U.S. Health Care Financing Administration reported that more than half of the nations 17,000 nursing homes were dangerously understaffed. The study linked understaffing to premature deaths among the nations 1.6 million nursing home residents.

Another study released last January showed that Florida nursing homes receive more state citations for certain quality problems than facilities in other states. Researchers at the University of California at San Francisco found that Florida homes received an average of 13.9 violations for insufficient staffing in 1998, compared with a national average of 4.6 violations. Florida facilities also received an average of 7.2 violations for failing to meet standards on food and sanitation, accidents, pressure sore care and respect for residents dignity. That compares with 5.2 violations per facility nationally.
Despite the evidence of quality problems, the nursing home industry and its allies argue that the solution to the industry's woes is to restrict abuse and neglect lawsuits.

(NOTE:- They want the actions to be taken under medical malpractice law which is much more restrictive.)
But plaintiff attorneys argue that abuse and neglect cases don't fit under malpractice law because nursing home care is custodial rather than medical. Its apples and oranges, says Scott Carruthers, executive director of the Academy of Florida Trial Lawyers.
Yet officials in the Jeb Bush administration have proposed a $25 million Medicaid reduction. In addition, McKay, whos now the senate president, and other key lawmakers want to shift Medicaid funds away from nursing homes and toward home- and community-based care. That draws howls from nursing home operators. Nursing homes need more dollars from the state, period, Shebel says. Well be fighting for that.

The plaintiff bar doubts that it can entirely stop the drive for limiting nursing home suits, given the money and clout behind the campaign. The trial lawyers main allies are consumer and senior groups, which lack large war chests. Some kind of tort reform is going to pass, Carruthers says. The only question is how bad its going to be.
Nursing home residents, however, may not fare as well. If you take away residents and their families access to the court, Wilkes says, the nursing home industry will have a green light to continue ignoring the neglect and abuse they commit and the deaths they cause.


COMMENT:- The not for profit groups are caught in the middle. Failures in care do occur with the best of intentions and they know it. The backlash and the intense scrutiny impinges on them. They understandably feel threatened, undervalued and ambivalent. They are forced into a position where they side with the corporate chains. The next article reflects this.

David R. Bailey
David R. Bailey is president of McLean, a charitable trust in Simsbury that runs the McLean Health Center, Visiting Nurses and McLean Village.

I get very discouraged when I read about nursing homes. Editorials denounce them as understaffed and indifferent. Legislators call for tougher standards while failing to provide public dollars to meet those standards.

This has been going on for years. In 1976, a blue ribbon commission was appointed by the legislature to investigate the nursing home industry in Connecticut. Twenty-five years later, nursing homes are still under suspicion.

It is clear that the public and the government don't like nursing homes and what they represent. The best proof is the recent explosion in a new care model called "assisted living." Adult children with parents requiring care feel much less guilty moving their parents into an assisted-living facility than a nursing home.

Yet nursing homes do fulfill an important role, whether we like them or not. Many assisted-living patients will use nursing homes when their needs outpace the ability of these places to care for them. And in many cases, when these patients have used up their private funds and must go on state assistance, the nursing home gets them.

So editorialists and lawmakers, on the one hand, regularly say they distrust or disapprove of nursing homes. On the other hand, the public desperately needs, regularly uses and begrudgingly pays for nursing home care.
These workers are expected to be perfect in their professional performances, attitudes, interpersonal skills -- or else the state public health department, the patient's family, the family's lawyer, the federal government or an ombudsman will make them mincemeat.

Would you do this? Does your job offer your clients anonymous hot lines to report your performance? Could you be fined, lose your job or be publicly chastised for making a mistake? As a New York Times news story stated on Dec. 25, "The entire profession suffers from a major public relations problem, with certain jobs in health care often perceived as thankless occupations rather than labors of love."
Every society faces daunting challenges in caring for its seniors -- acute suffering and loss, complicated medical scenarios, mental health concerns and the struggle for simple dignity in the face of morbidity and mortality.

This requires a culture of caring for seniors that Americans clearly lack. Look at the many services for poor and sick children in this country -- children's hospitals, school clinics, preschool programs. No such soft spot exists for seniors.

So, absent creative, constructive dialogue on how we really want to care for our seniors, the status quo remains -- tinkering with staffing hours and staff compensation.

The time is long overdue for good, caring people to step forward and begin a local, statewide and national effort to do away with nursing homes, or franchise them, or link every one of them to a hospital, or make them all nonprofit, or any number of new initiatives that lawmakers and taxpayers are ignoring.

The point is, people will age. People in record numbers are aging. And we need new ways of dealing with them. But nobody's willing to deal with nursing homes.


COMMENT:- The following article looks at the use of untrained people to help in understaffed nursing homes. I have not included all the points of view expressed - simply the thrust of the material.

Capital Times (Madison, WI.) January 10, 2001

A plan to phase out some uncertified workers at Wisconsin's nursing homes could lead to admissions cuts, says an industry representative, but a union lobbyist called the move the right one.

The federal government ordered the state last year to draft a plan to phase out ''single-task workers'' often used to feed or transport nursing home residents. The state Department of Health and Family Services submitted a plan on Dec. 29 to phase out the workers over the course of a year.
Seniors entering nursing homes now are much more frail than those entering homes just a few years ago, Kraig (Union Rep.) said, because they now tend to stay in their own homes longer.
The reason they are necessary, said John Sauer, director of the Wisconsin Association of Homes and Services for the Aging, is because the state has a severe labor shortage. Single-task workers aren't the final answer, he added, because they don't count against mandated staffing requirements, but they are a valuable supplement.
Assuming Senate confirmation, the new head of the Department of Health and Human Services will be Wisconsin Gov. Tommy Thompson, whose administration has embraced single-task workers in the state.
But Kraig said the main reason nursing homes have a shortage of workers was because they pay ''McDonald's level wages'' for very demanding work. He added that inadequate staffing at homes made for poor working conditions and therefore higher turnover.

COMMENT:- There is much more about how this group recruits members without their knowing etc.

"The Fraud of "Citizens for Better Medicare""
Hightower's Common Sense Commentary: Thursday, January 11, 2001

How many legs does a dog have if you count its tail as a leg? Four. Calling a tail a leg doesn't make it one.

Neither can "Citizens for Better Medicare" be counted as a grassroots group just because its organizers call it one. This outfit has already spent $38 million on television ads proposing federal funding of prescription drugs for seniors. Sounds good, but who exactly are these "Citizens" for Better Medicare? The organization turns out to be a front group for the large drug companies. The Wall Street Journal reports that CBM is funded by the drug giants, and it's headed by the former marketing director of the industry's lobbying arm.

While CBM wants Medicare to cover prescriptions, it's also adamant that the government should do nothing to hold down the prices that the companies charge for these prescriptions. What a deal!


Supreme Court asked to resolve conflicting rulings in nursing home death cases

When a nursing home patient dies as a result of negligence, can his heirs collect damages for his pain and suffering?

Two Florida appellate courts are at loggerheads on the issue. And now, the 3rd District Court of Appeal in Miami has asked the Florida Supreme Court to settle the difference of opinion.
Eaton argues that the purpose of the Nursing Home Bill of Rights was to improve the quality of care and that without the threat of lawsuits by neglected and abused residents, nursing homes would have no incentive to improve care.

The 4th District has effectively gutted [Chapter 400] and rendered it meaningless, wrote Eaton in his brief. In the 4th District, when a nursing home resident is killed by a nursing homes failure to diagnose or treat a medical condition, there will be no remedy, and thus, no justice.


COMMENT:- This article describes the frequency of substandard care and how it is being addressed in Pennsylvania. The articles describe a large number of instances and what was done. I have not included these.

Nursing facilities being watched more closely
Philadelphia Business Journal January 12, 2001

Assistant U.S. Attorney David Hoffman is on the front lines in the battle to improve the quality of care at Pennsylvania nursing homes.

Hoffman, who is assigned to the Eastern District of Pennsylvania, helps investigate and prosecute the operators of nursing homes that provide substandard care or fail to properly maintain their facilities.

Since 1996, when Hoffman brought his first case against an area nursing home, a total of six area nursing homes have been fined for problems ranging from providing inadequate nutrition to failing to provide necessary care for residents who suffer from chronic diseases.
In Pennsylvania, nursinghome complaints nearly doubled in 1998 after the state passed a law requiring nursing-home employees to report incidents of suspected neglect and abuse. In 1998, the first full year of the reporting requirement, 2,019 complaints were filed with the state, up 1,000 from 1997.
"Some of these homes provided health care so poorly it is tantamount to no care at all," said Hoffman, noting that many nursing facilities receive federal subsidies in the form or Medicare or Medicaid.
Sometimes those complaints are filed by hospitals that have treated nursing home residents. In other cases, family members or attorneys who represent families file complaints.
"There is a huge difference in the care being rendered at these facilities," Hoffman said. "The level of care has improved immensely. That is the best result in all this. People are being treated better."

New York

Protecting The Elderly; Pataki offers a plan to fight abuse, neglect in nursing homes
Newsday (New York, NY) January 15, 2001

Gov. George Pataki, who was faulted in his first years in office for urging deep cuts in health care for the elderly, proposed aggressive measures yesterday to protect aged residents of nursing homes from abuse and neglect.

Pataki announced that he would ask the Legislature to fund 10 more nursing home surveyors for the State Health Department on top of the 72 investigators being hired for the department's regional offices, as well as 25 more auditors to look for Medicaid fraud. He said the measure would bring the number of regional inspectors to the highest level in state history.
Pataki also said he would propose new rules to make it easier for the state to remove negligent nursing home operators.
Officials in the Pataki administration said state inspectors found that nursing home conditions have been getting worse recently. The health department last year cited 28 nursing homes for the most serious category of deficiencies. It also issued more than $235,000 in fines to 45 nursing homes.

Pataki said that at the same time, nursing homes' profits have thrived.

"The trend is going in the wrong direction," State Health Commissioner Antonia Novello said in a statement released yesterday by Pataki's office. "It's clear that despite the record profits nursing homes have realized over the

last five years, some have not taken the necessary steps to reinvest those profits into the homes to ensure the residents' care meets state and federal standards."


Legislators clash over plans to aid nursing homes, Improving standards uniting principle; bed tax, tobacco funds debated as means
The Arkansas Democrat-Gazette January 15, 2001, Monday

A plan to raise $ 80 million annually to improve nursing homes in Arkansas will be offered to the state Legislature. Sharp disagreements exist over how to come up with the money.

There's also tension over whether new regulations should be imposed on the homes and over industry officials' desire for legislation to limit the homes' liability costs.

Key legislators who are grappling with the issue of how to finance and care for the elderly say they want to quell growing contention over the level of care at nursing homes in the state and lay the groundwork for handling an impending boom in the population of the aged.

The issue is arising in the Legislature following a spate of lawsuits over the deaths of nursing home residents. The suits alleged everything from residents being burned by sponge-baths with a floor cleaner and deaths from improper medications to residents wandering off and into the paths of vehicles.
Underlying the skirmishing is a consensus that nursing homes need help and the quality of care should be improved.
Minimum staffing was to increase even further, and the state was to pay $ 1.96 more per resident per day, under legislation passed in 1999. But those rules were never instituted because the state Department of Human Services didn't have the money to pay the extra incentive.
Others are wary of giving any money to nursing homes without forcing the industry to meet increased standards. They point out that last year Beverly pleaded guilty to Medicare fraud charges, agreeing to pay $ 175 million to settle civil and criminal charges.
The association he heads has set up three political action committees to make sure nursing home interests get attention at the Capitol. Those PACs funneled some $ 34,500 in campaign donations to legislators from January 2000 through the end of September. The association also has hired Ernest Cunningham, a former speaker of the House, to spearhead its lobbying effort.

Alarmed over the recent opening of an Arkansas office of the Tampa, Fla.-based Wilkes &amp; McHugh law firm that specializes in lawsuits against nursing homes, nursing home officials plan to push legislation that would control litigation costs.
"My sense is that the primary problem is not that the nursing homes get sued," Pryor said. "But the problem is that we're not paying our nursing home personnel enough and don't have enough personnel."


Surveying the landscape; State of Oklahoma using 'score card' to quantify nursing home quality
Modern Healthcare January 15, 2001

The Oklahoma Health Department is taking the direct approach to measure the quality of the state's nursing homes.

A two-page survey was mailed at the end of December to the 27,000 residents, or the guardians of residents, of state-licensed nursing homes, says Darren Burgess, assistant deputy commissioner of the health department. Each survey includes 28 questions about the quality of life, quality of care and quality of service for residents and residents' overall satisfaction. It includes a comment section.

A sheet instructing residents and their families on what to look for in a nursing home accompanied the surveys.
Brinkley (Oklahoma Association of Homes and Services for the Aging) says the survey is needed because the health department grew too cozy with providers. The worst example of that relationship came in May 2000, when former Deputy Health Commissioner Brent VanMeter and nursing home owner Jim Smart were convicted of bribery. A federal judge last month sentenced each man to three years in prison and ordered each man to pay a fine of $50,000.

Since the scandal broke with VanMeter's arrest on May 2, Oklahoma has revoked the Medicaid licenses of six long-term-care facilities, and at least five of those homes have closed since the revocation.
Elma Holder, founder of the Washington-based National Citizens' Coalition for Nursing Home Reform, applauds the survey and wishes more states conducted surveys. ''They're not common, so it's a good place to begin,'' she says.
Holder's organization has designed a postcard-quality survey and asked HCFA to require nursing homes that receive Medicare or Medicaid payments to make the cards available to residents and their families at all times so regulators can receive feedback on a continual basis. HCFA has tested the cards in a handful of nursing homes but has not committed to requiring them, Holder says.

Prices Skyrocketing On LTC Liability Exposures; long-term care liability
National Underwriter Property & Casualty-Risk & Benefits Management January 15, 2001

When it comes to long-term care liability there's good news and there's bad news. The good news is that coverage is still available in most states. The bad news is that the industry is in the middle of a very hard market and the only people profiting in some states are lawyers.

"The losses have certainly outpaced the premiums that have been charged for the past three to five years," said Chuck Colburn, vice president for Chicago-based CNA. "The reason most insurers are...raising rates is strictly profitability, and losses are certainly being driven by some of the large verdicts that are taking place in this industry."
Texas is one of the few states that pays all facilities a flat rate, which means that payments are determined by a statewide average. The Texas Association of Homes and Services for the Aging recommends tort reform measures that will:


Legislator addresses nursing home worker shortage, salaries; Industry officials say idea is not realistic
Waukesha-Lake County Freeman January 17, 2001

CNAs are at the heart of a new debate in Wisconsin on nursing home care. State Rep. Peggy Krusick, a Milwaukee Democrat, announced Tuesday she will introduce legislation in the next two weeks that would require nursing home facilities to provide higher staffing levels.

"With hospitals discharging patients more quickly, many nursing homes just don't have enough nurses and aides to attend to the increasingly complex medical needs of the population they serve," Krusick said.

Krusick has the support of the Service Employees International Union, the state's largest organization of nursing home health care workers, including CNAs.

"The staffing levels have dropped so low in many facilities that it's a physical danger to residents," the union's political director, Robert Kraig, said. "We have members saying they can't provide care at these current staffing levels."

COMMENT:- the next article is a long one dealing with staffing issues. I have included only a few snippets.

New York

Health Care Worker Shortage Is Felt Islandwide
The New York Times January 21, 2001

SERIOUS staffing shortages at the Island's hospitals, nursing homes and home care agencies put patient safety and care at risk, industry executives and union officials say.
Donna Hughes of Center Moriches has often mused about jumping ship. After nearly a decade as a staff nurse at Central Suffolk Hospital in Riverhead, she says she is fed up with the chronic understaffing, heavy workload and mandatory overtime that have become standard in the industry.

"What's the point of quitting to work at another hospital?" said Ms. Hughes, 46. "It's not better anywhere else."

Michael Chacon, a representative for Long Island at the New York Nurses' Association, worries that as nurses are stretched thin by increased workload demands like additional paperwork generated by managed care and caring for sicker patients with complex medical problems, the volume of errors will rise.
But while demand for nursing services continues to climb, nursing school enrollments in baccalaureate programs have declined in schools in the Northeast by 7.4 percent, according to the American Association of Colleges of Nursing.
Jay Sackman, executive vice president for the nursing home division of Local 1199 of the Service Employees International Union, which serves the metropolitan area including Long Island, argues that overburdened workers frequently cannot keep up with the personal care needs of their residents, let alone social interaction. He noted instances where residents who needed to be walked to the bathroom ended up soiling their beds because workers were unavailable. "We have workers complaining that they just can't do the right thing by their residents," Mr. Sackman said.
To reduce the shortage, some in the industry, including the New York State Nurses' Association and other advocacy groups and unions, support legislation for mandated staffing levels. Two bills, one in the state Senate sponsored by Carl Marcellino of Syosset and another in the Assembly introduced by Richard Gottfried of Manhattan, establish minimum staffing levels in hospitals and nursing homes, respectively.
But a mandatory staffing level won't automatically produce more health care workers.


American Health Line January 23, 2001

Hoping to help quell Maryland's "extreme" nursing shortage, state Sen. Leonard Teitelbaum (D) last Thursday introduced legislation that would provide a $100-a-month income tax cut for the state's long term care nurses, the Baltimore Business Journal reports.

COMMENT:- This long article describes the steps taken by the Clinton administration to detect and prosecute health care fraud. When the actual sums recovered are set against the various billion dollar estimates cost of health care fraud the success rate looks far less impressive - just the cost of doing business. The two figures are never quoted together.

Justice Dept. Finds Success Chasing Health Care Fraud
The New York Times January 23, 2001

While drug lords and organized-crime bosses may have been the more high-profile targets of the Department of Justice in recent years, among the most hotly pursued culprits have been those who commit health care fraud.
The figure for civil cases is similar. From 1997 to 2000, recovery in civil fraud cases grew by more than 50 percent, and last year, of the $1.5 billion recovered by the federal government from fraud cases generally, $840 million was from those involving health care, the department said.
Some trade groups and lawyers have begun to make inquiries into whether President Bush, whose choice of John Ashcroft for attorney general has not yet been approved by the Senate, will continue the fight against health care fraud. The answer is not quite clear.
"But there is no sense that it is going to be as big a priority," he said. "We think it is going to be somewhere in between. It depends a lot on who the U.S. attorneys are."
Beyond the vastly increased financial resources and a new federal statute devoted to health care fraud, prosecution of these cases has also been aided by relatively fresh cooperation among government prosecutors, private insurers, which once pursued fraud cases all alone, and a newly sophisticated group of whistle-blowers who alert the authorities to instances of fraud.

COMMENT:- The next article describes a large number of instances of neglect at many different homes in the state. I have devoted other pages to neglect and poor treatment at homes owned by most of the large corporations standards. I have not included extracts here. There is a large volume of graphic material describing the horrors of neglect.


CARE CRISIS; State cites neglect, abuse at nursing homes
The Boston Herald January 25, 2001 Thursday ALL EDITIONS

Elderly residents of some Massachusetts nursing homes routinely suffer neglect and abuse due to staff shortages and incompetence - risking injury or even death as they live out their final years, state inspectors claim.

COMMENT:- There is a replay of the Florida dispute in Arkansas where the giant Beverly Enterprises dominates. It has a particularly poor record for care. The arguments made by both sides are the same and I have not included most of them.


Nursing home liability caps debated
The Arkansas Democrat-Gazette January 25, 2001, Thursday

Trial lawyers and nursing home owners denounced one another Wednesday over proposed legislation to limit nursing homes' liability and make it harder to win lawsuits against them. Nursing home industry leaders called for passage of a bill that would cap damage awards against nursing homes and restrict when evidence of misconduct could be used against them.

"We're in a crisis probably like none that I've ever seen in my 30 years," said David Banks, chairman of Fort Smith-based Beverly Enterprises, the largest nursing home operator in the nation. Unless liability judgments are controlled and more public aid is generated, Banks said, Arkansas nursing homes will close and liability insurance costs will soar beyond reach of the remaining facilities.

Later, a trial lawyer who specializes in suing nursing homes charged the nursing home industry is misleading the public and shirking the care of the most disadvantaged.

James L. Wilkes II, a Florida lawyer who has opened a branch office in Little Rock, said nursing home operators are fleecing the state, funneling money to management at the expense of residents.

"If you did to your mother or your grandmother the things nursing homes in Arkansas are doing to their residents, you would be prosecuted," Wilkes said in an interview with the Arkansas Democrat-Gazette.


Families recount indignities to shift nursing home issue :: A Tallahassee news conference is designed to shift the focus from lawsuit reform.
© St. Petersburg Times, published January 25, 2001

TALLAHASSEE -- Patricia McTier has seen the worst of Florida nursing homes, inside and out.
Half a dozen family members, all with horror stories like McTier's, packed a news conference Wednesday in Tallahassee designed to shift the debate over the state's nursing home industry from lawsuit reform to improving nursing home quality.
"If a dog was treated that way at a kennel, it would be closed down," McTier, 51, said of the care her brother received.
Industry critics say nursing homes must hire more employees, provide better training and pay them more to increase the quality of care at Florida's 746 nursing homes. Such improvements will lead to better care, they say, reducing the need for lawsuits. Certified nursing assistants, who earn an average of $6.94 an hour, care for 80 percent of the state's 80,000 nursing home residents, said Barbara Hengstebeck of the Coalition to Protect America's Elders.

Federal standards suggest two hours of nursing assistant care per day per resident, or the patient is at risk of dying, Hengstebeck said. In Florida, the average patient receives 1.7 hours of care per day, she said.
"You cannot provide good care if all your funds are being drained through litigation," argued Freddie Franklin, a Tallahassee nursing home administrator and past president of the Florida Health Care Association, which represents about 90 percent of the state's nursing homes.

Last year, lawmakers assigned a task force the job of solving the debate, but the group failed to agree on any recommendations.

A shortage of caregivers
Journal of Business January 25, 2001

At lunch time recently in a Spokane Valley nursing home, nursing assistant Amy Anderson distributed plates of food, fastened terrycloth bibs around residents' necks, and cut their chicken parmigiana into bite-sized pieces.
"There's a shortage nationwide of the people who provide hands-on care," says Monique Kolonko, manager of Mission Ridge Assisted Living, in Spokane.
Kolonko says wages for nursing assistants at Spokane assistedliving facilities start at about $7 an hour. Nursing homes here usually pay slightly higher wages, typically $8 to $9 an hour, and hospitals pay $10 to $11 an hour for the same job functions, she says.
Easier jobs in retail or food service pay roughly the same amount, says Pricilla Knapp, director of nursing at The Gardens.
Stores and restaurants also have more appealing work schedules because-unlike nursing homes - they usually aren't staffed 24 hours a day, every day of the year, Knapp says.

"Certified nursing assistants don't work for the money," she says. "They do it for the love of the elderly."


Wisconsin State Journal January 26, 2001, Friday, ALL EDITIONS

Wisconsin nursing homes have a year to retrain or fire uncertified staff members hired to feed residents or push their wheelchairs, federal officials said Thursday.

"This could affect delivery of care and interaction with residents in virtually every nursing home in the state," Tom Moore, executive director of the Wisconsin Health Care Association, said Thursday.

For the last seven years, Wisconsin, faced with a severe staff shortage, has allowed individuals who are not designated as certified nursing assistants to perform a single task for nursing home residents, usually feeding or transporting.

But, last April, the Health Care Financing Administra- tion decided Wisconsin nursing homes could no longer use " single-task workers" to fill in. The Social Security Act requires a higher level of training for such employees.
Sue Schroeder, director of the state Bureau of Quality Assurance, said Thursday the state would begin encouraging single-task workers to take the 75-hour CNA training classes.


Pryor prods nursing homes with fines
The Arkansas Democrat-Gazette January 31, 2001

The state attorney general's office, assuming a more aggressive stance against nursing homes accused of neglect and abuse, is using a little-known state statute to seek faster legal remedies against the industry and potentially prompt better care of the state's elderly.

Attorney General Mark Pryor's Medicaid fraud control unit, under a 1993 law, has reached civil settlements of between $ 150,000 and $ 200,000 in a handful of cases of neglect and abuse since October, according to Brent Moss, the office's senior Medicaid fraud counsel.
"It's a tool that's been available to the office for a long time, but for whatever reason, it has not been used by this office," Pryor said. Pryor has made nursing-home abuse a high priority and rotated job assignments in the Medicaid fraud control unit to have more investigators delving into complaints. But the unit has focused on civil remedies in many instances because criminal cases are hard to prove and take a long time to prosecute. The office is now juggling 163 open cases of neglect and abuse in nursing homes, as well as 45 Medicaid fraud cases.
The attorney general's office has an interest in prosecuting and pursuing only the most chronic offenders, Moss said. "We're swamped; we're going full guns," said Joe Childers, director of the Medicaid fraud control unit, which receives 25 percent of its financing from the state and 75 percent from the federal government.
The types of cases the attorney general's office sees regularly include nursing home residents with pressure sores on their feet, hips, ears and shoulders; unexplained fractures for which the nursing home provides no concrete evidence for how the fracture occurred; inadequate or falsified resident records; fractures or pressure sores for which residents receive no pain medication; and strangulations caused by inadequate supervision of restraints.
Short staffing is the primary cause of neglect and abuse in the nursing-home industry, Moss said. "It impacts the quality of care," he said. "If we can put more money into staffing and front-line caregivers, we'd have less civil penalties and less private lawsuits."


THE ORLANDO SENTINEL February 2, 2001 Friday, METRO

The "My Word" Tuesday, "Common sense about nursing homes," demands a rebuttal: It is true that Florida needs to improve quality of care in nursing homes and protect elderly residents, but taking away their rights to seek redress in court is not the solution. Solutions have to do with the nursing-home industry cleaning up its act and getting its finances in order.

The U.S. General Accounting Office recently studied these issues and conclusively determined that nursing-home bankruptcies were not caused by the government reimbursement system, nor by litigation, but by bad business decisions.

All credible studies have concluded that staffing levels have the greatest effect on quality of care at nursing homes. The federal government recommends minimum standards of two hours of nursing care each day. Florida law requires a minimum of only 1.7 hours. This 1.7-hour minimum has been the law since 1962, despite the fact that the sickness levels of patients in nursing homes have drastically increased during that 38-year period.

A government study concluded that Florida has 300 percent more staffing violations than the national average. Considering this, these corporations should not be surprised that Florida insurance rates are higher. Poor staffing leads to poor care, injuries and death, which lead to lawsuits and, ultimately, higher insurance premiums.

For example, look at the recent problems of three corporations that run more than 100 homes in Florida: Beverly Enterprises Inc. pleaded guilty to fraud and agreed to pay the government $175 million after it was charged with stealing more than $460 million from Medicare.

Integrated Health Systems was $3 billion in debt before declaring bankruptcy this year. Its chief executive earned more than $44 million in the past five years and was cited by Forbes Magazine as the most overpaid executive in 1999.

Vencor was forced to repay $90 million to the government, and several of its top executives were jailed. Last year, the Justice Department announced a $1.3 billion suit against Vencor on charges of "intentionally defrauding the government."
Insurance companies group all nursing homes together into one risk pool. So the worst nursing homes run by large corporations are in the same risk pool with small, non-profit homes.

COMMENT:- The chains are clamoring for more money to pay nurses. This is what happened in Wisconsin and also in California when they were given money for this purpose.


Audit says nursing homes didn't pass through wage increases
Milwaukee Business Journal February 2, 2001

A new state audit has concluded that 61 nursing homes in Wisconsin did not pass through any of the state dollars they received to boost wages for nursing home workers.

The preliminary audit by the state's Division of Health Care Financing reveals that $1.9 million of state money, out of an available $8.3 million, was not used by nursing homes for its intended purpose of increasing the wages of certified nurse's aides (CNAs). The nursing home industry had requested assistance to pay higher wages to recruit and retain workers in a tight labor force.


Nursing home workers didn't get raises, audit says
Sacramento Bee February 2, 2001

More than $1.6 million in wage increases approved by the California Legislature for care workers in nursing homes never made it to their paychecks, according to a state audit.

Diana Ducay, deputy director of audits and investigations for the Department of Health Services, said the ongoing audit so far has found that 49 nursing homes failed to pass along wage increases intended to attract and keep more highly qualified careworkers and thereby improve the quality of care.

Ducay said indications are that as many as 30 percent of the state's 1,356 homes may not have passed along the wage increases.

The California Association of Health Facilities, which represents nursing home owners, has criticized the way the audits were conducted. The association claims pay hikes were granted.


Storm of century turns toward us
Arkansas Democrat-Gazette 4 Feb 2001

The storm of the century you might not have noticed gathering on the Arkansas horizon is the result of rapidly losing the workforce that cares for the elderly and the disabled in our nursing homes.

Believe me, the winds in this one are carrying plenty of guilt and misery, especially considering that most of today's complaints about Arkansas' nursing homes already stem from inadequate staffing.

If our state lawmakers and others involved in the critical long-term care industry do not act now to establish and fund effective training programs for nurses and nursing assistants, as well as to upgrade both status, compensation and working conditions for such valuable employees, our state's depleted nursing home workforce will continue to shrink.

Today's population also is aging quickly as this vital labor pool is evaporating. Yet the state still lacks an effective education program to replenish the vacancies. As we have more older and sicker people who require increasing levels of care, Arkansas simply is not providing what's necessary to attract, train and keep enough vital front-line caregivers.
Vollmer (former professor of nursing), who lives in Little Rock, is among an increasing number of Arkansans now deeply concerned about the diminishing workforce in our nursing homes, as well as the shockingly bad medical care and poor quality of treatment in a significant number of elderly care facilities. The whole mess paints a sad and alarming picture.
  Mike Masterson is director of communications at American Freightways and a veteran Arkansas journalist. His column appears on Sunday.

New York

Daily News (New York) February 5, 2001

City nursing home owners have shelled out nearly $1 million in political contributions during the past five years, forging alliances in Albany and Washington that have saved their businesses millions.

In the past two years, the political arms of the state's nursing home industry have spent another $3 million lobbying lawmakers to protect their members' interests, according to a Daily News analysis of city, state and federal campaign contributions.
Nursing home owners will need all the help they can get in coming months.
After a December Daily News series documenting widespread staff shortages and neglect at area nursing homes, Pataki unveiled the Nursing Home Quality Improvement Act, which would double fines for homes that provide poor care, require criminal background checks of workers and make it easier for the state to take over badly run homes.

At the top of the list of industry political contributors is Jack Friedman, one of the wealthiest nursing home owners in the state. His three New York City homes tallied nearly $8 million in owners' salaries and profits in 1999.

Friedman has donated more than $130,000 in campaign contributions since 1996, according to The News' analysis. Two of his partners at the Union-Plaza Nursing Home in Flushing, Simon Pelman and Steve Zakheim, have given more than $90,000 since 1995.
Pataki, not surprisingly, is the leading recipient of largesse from city nursing home owners, with at least $70,000 in contributions since 1995, The News' analysis shows.
"We all thought there was a deal, no more cuts for three years," said Morris Tenenbaum, who owns three homes in New York City and had given Pataki $2,000. "He reneged, and I still give him another contribution."

Health care industry faces labor crisis
The Times Union (Albany, NY) February 7, 2001

With nine out of 10 New York hospitals reporting vacant nursing positions, and an endless array of recruiting techniques and gimmicks still coming up short, the officials announced the formation of the Workforce Investment Now Coalition.

The statewide, eight-group organization will ask New York legislators to consider several issues that may ease the crunch, from changing Medicaid payments to more closely reflect labor costs, to creating incentives for people to join the health care work force.
It was about two years ago that industry types saw the number of health care jobs outstripping the number of people willing to take them. Part of that is about wages; part is about people being able to find easier, cleaner work elsewhere that does not require them to pull double shifts or work strange hours; part is about women, the traditional nursing base, having additional options.
''I think most New Yorkers are completely unaware of the staffing crisis,'' he said. ''I think there is a lot of recognition within the Legislature as to the problem, and we're going to have to confront it on a pretty short time frame.''


COMMENT:- Corporate downsizing, understaffing and persecution of whistle blowers have driven nurses into unions. Bitter battles between unions and corporations like Beverly and Sun Healthcare have hardened attitudes and resolve. Unions are now powerful and well organised. They have repeatedly warned of the problems for care resulting from corporate policies. With record employment and a funding crisis they are in a position to insist that decent wages are paid and that they can give patients the care they need.


Amid all the talk about the state's pumping new money into mental health care, community correction programs and other initiatives, a silent problem has been looming in the background: nursing homes.

With contracts set to expire at more than 50 homes on March 15, the state's largest union of health care workers is once again in a strong position to press its demands. A strike by about 6,000 nurses, aides and maintenance workers would touch thousands of nursing home residents across the state.

But meeting the union's demands may prove unpalatable to Gov. John G. Rowland, who presents his budget to the General Assembly today. The union's demands could cost nursing homes, which are funded largely by the state, an additional $50 million a year.

That prospect could interfere with Rowland's spending priorities -- and may well put the governor and union leader Jerry Brown, his longtime nemesis, on a collision course.
Lisa Salamon, a spokeswoman for Genesis Health Ventures, which owns four unionized nursing homes in Connecticut, called the union's demands outrageous. Given the union's opening position, she said she was not optimistic about the prospect of a settlement before the March 15 deadline.
State lawmakers may be loath to meet the union's demands in a year when "budget cap" is the most popular phrase at the General Assembly -- but not doing so could be risky. District 1199's workers have shown in the past they are willing to strike, and a massive walkout could be hard for the industry to handle, especially in a tight labor market.

"The odds [of satisfying the union] are slim to none if there is not a reasonable increase in Medicaid reimbursement," said Toni Fatone, executive vice president of the Connecticut Association of Health Care facilities, a nursing home trade group.


Va. Nursing Home Bill Sparks Fight; Proposal Would Allow Hiring of Some Former Violent Felons
The Washington Post February 08, 2001

Advocates for nursing home residents vowed yesterday to fight a bill approved by the Virginia House of Delegates that would allow some felons convicted of assault to work in nursing homes, provided they pass a screening by the state Health Department.

The measure, which sailed through the House 82 to 12 Tuesday and is before the Senate, would allow a nursing home to hire someone convicted of "not more than one felony relating to assaults and bodily woundings [involving] a domestic dispute."
The measure,- - - - is an attempt to respond to what the industry says is a shrinking pool of applicants for health aide and other jobs in nursing homes.
A Springfield-based advocacy group for nursing home residents, TLC 4 Long Term Care, yesterday called the measure "dangerous and misguided."
The Service Employees International Union, which represents more than 100,000 nursing home workers across the country, says the answer to the staffing crisis is to improve the safety and working conditions for jobs that it says rank among America's most dangerous.

According to Henshaw, the problem is not a shortage of available employees but a turnover rate close to 100 percent annually because of inadequate staffing and resulting heavy workloads. Her group supports a bill that would establish minimum staffing levels.

New York

The Profiteers of Elder Care
The New York Times February 12, 2000

For Lawrence Friedman, the Parkshore owner, it was wonderful indeed. By 1999, blooming like a money vine, the Parkshore centers were running three shifts a day, for which Medicaid billings rose to $47 million annually, or more than $52,000 for each of the 900 aged clients being served for a few hours each day. With the permission of senior officials in the New York State Health Parkshore expanded until it accounted for one-quarter of all state adult day-care billings, capitalizing on a formula that allowed nursing homes to open day-care centers offsite, and be reimbursed at 65 percent of the local daily nursing-home rate.
Two months ago the State Attorney General, Eliot Spitzer, charged Mr. Friedman with defrauding Medicaid of $62 million, the largest such case in the state's history.
But employees told investigators that services deteriorated to little more than social activities, as a report in The Times this week by Dan Barry and Katherine Finkelstein suggests. Investigators will now need to determine why State Health Department officials approved the Parkshore expansion against the recommendation of lower-level Health Department staff, and bring charges against senior officials if warranted.

The case in Brooklyn is part of a national pattern of exploiting programs intended to care for the old. In 1998 the Inspector General of the Federal Health and Human Services Department said that 90 percent of the nation's community mental-health centers were improperly billing for acute care while in fact merely providing recreation for mostly healthy patients. The practice of bilking Medicaid and Medicare programs has been sadly commonplace. The Justice Department announced just last week that Beverly Enterprises, the nation's largest nursing-home chain, had agreed to pay $175 million and relinquish 10 of its homes for defrauding Medicare, the biggest such settlement ever. This pattern of waste and greed devours money badly needed for the care of older Americans.


Nursing home workers donate extra hours to emphasize staff needs
The Associated Press State & Local Wire February 14, 2001

Health care workers across the state volunteered to work extra hours Wednesday to lobby for higher staffing levels at nursing homes.

More than 100 workers were hoping to garner support for legislation that would raise staff-to-patient ratios. Nurses, nurses aides, laundry, dietary and housekeeping workers at nine nursing homes worked two hours over their regular shifts.
The workers hoped they could show what a difference added staff would make, said Deborah Chernoff, a spokeswoman for District 1199 of the New England Health Care Employees Union.

Chernoff said the workers believe that low staffing levels contribute to malnutrition, dehydration and other problems among nursing home patients because workers do not have time to give the patients the individualized attention they need.

"At a minimum, it means that aides and nurses don't have time to pay individual attention and do the little things that make a big difference, like taking time to sit and hold someone's hand when they're feeling frightened or depressed, helping with grooming, writing letters or playing games," Chernoff said.

Three bills aimed at raising staff-to-patient ratios are pending before the Legislature. Similar bills failed to win approval during the past two years.
State Attorney General Richard Blumenthal spoke to nursing home patients and caregivers at a news conference at Mediplex in Darien.

Blumenthal said one of the most frequent complaints received by his staff concerns the quality of care at state nursing homes.

"What really needs to be changed is the entire system," Blumenthal said.

THE HARTFORD COURANT February 15, 2001

The nation's shortage of nurses may get worse before it gets better.

New government figures released Wednesday showed the number of registered nurses increased by 137,666, to 2.7 million, over the four-year period ending last year. But the 5.4 percent increase was the slowest in the quarter-century that the numbers have been collected and brought warnings of a nationwide crisis if the trend continues.
The new statistics, compiled by the federal Health Resources and Services Administration, showed the average age of the nation's nurses -- 45.2 years --increased by nearly a year during the latest study period. Experts are concerned that the increase could foreshadow a period of serious shortages because the number of students entering nursing schools is flat or declining.
In addition to what they see as low pay -- the national average is $46,782 a year -- nurses at the hearing complained about being forced to work overtime, facing staffing shortages and feeling a lack of respect for their work.

New York

Daily News (New York) February 15, 2001

More New Yorkers are dying in city nursing homes than ever.

The number of deaths in city nursing homes has jumped to 6,475 in 1999 from 3,891 in 1990, a 66% increase over the past decade, according to statistics recently released by the City Health Department.

Several economic factors are fueling the trend, according to experts.

"The hospitals want them out," said John Toner, an associate professor of geriatrics at Columbia University. "They force them out as soon as they can get them out."

Long hospital stays for chronic patients were once common, doctors say. But with hospital bills rising, many of those patients are now going to nursing homes. And fewer people seem to be willing to take care of their dying relatives at home.


Nursing homes run out of options for insurance; The Florida homes put the blame on trial lawyers and liability lawsuits.
Sarasota Herald-Tribune February 19, 2001, Monday, ALL EDITIONS

Florida nursing homes face a shrinking liability insurance market.

In September, 17 insurance companies provided coverage, although six of those insurers wrote only two new policies in 2000, state regulators reported. Twenty-three other companies had abandoned the state.

Since then, the market has only worsened, with the last regulated insurer expected to stop renewing policies this year.

That leaves the nursing home industry with a handful of unregulated insurers -- known as excess and surplus lines companies -- providing coverage. And that translates into skyrocketing rates and deductibles for the nursing homes, which care for about 80,000 elderly and disabled Floridians each year.

COMMENT:- Reports during 2001 uncover a massive crisis in nursing home funding, in staffing and in care in state after state across the USA. A massive injection of funds is needed but in a political system based on downsizing government and reducing taxes it is not a political option. Politicians by their rhetoric have created a situation where it is impossible for them to go to the electorate with a policy of increasing taxes to fund social services. There is of course no other solution and if they do increase taxes the corporate sector will take a disproportionate slice for themselves. None are prepared to confront the fundamental problems created by marketplace solutions for health care.


COMMENT:- This is a long article looking at what has happened in Florida and comparing for profit corporate care with not for profit. I have taken representative fragments.

Nursing home quality declines Facing a tide of lawsuits and horror stories, the industry says it is working to improve, but the Florida Legislature may not wait
The Florida Times-Union (Jacksonville, FL) April 1, 2001
Marcia Mattson, Times-Union staff writer

In the past several years, while lawsuits against Florida nursing homes were piling up, some disturbing trends emerged.

The percentage of Florida homes caught violating the state's minimum staffing requirements more than doubled from 1993 to 1999, according to a federal study. Violations of several other nursing home regulations increased.

And nursing home residents grew sicker and more dependent on help with things like eating or using the bathroom.

'It's like The Perfect Storm,' said Jacksonville lawyer William Harrell, who sues nursing homes for abuse and neglect. 'What you have here are the perfect conditions for catastrophe. It's inevitable catastrophe would happen.'

Researchers, advocates for the elderly and even the insurance industry have joined trial lawyers in saying the quality of care in nursing homes must improve to help solve their legal problems.
But on March 15, the (Florida Health Care) association acknowledged its members' role in the mess by announcing they would have to start following a code of ethics developed in the past two years

Years of study have proven that the level of staffing affects how well a resident is treated.
'The research evidence shows a strong relationship between staffing and poor quality as measured by deficiencies,' said Charlene Harrington, a University of California researcher who co-authored the federal study on the nation's nursing homes. The study was released last fall.
The state agency that regulates nursing homes got complaints last year that 18 of the 49 nursing homes in Baker, Clay, Duval, Nassau and St. Johns counties had violated staffing requirements. All but one were owned by chains. Agency investigators confirmed four of the complaints.

But regulators in Florida and other states have been criticized for years by trial lawyers and elder advocates for giving homes with problem inspections time to come into compliance, rather than punishing them for having violated requirements. A 1998 report by the U.S. General Accounting Office found that in 99 percent of cases nationwide, nursing homes that violated standards got a chance to improve rather than face a fine or penalty.
Increasing staff won't be cheap for Florida's Medicaid program, which pays the bill for most nursing home residents. One state report estimates the cost for more aides alone -- no new nurses -- at $ 203 million. Throw in the nurses, and the cost rises to $ 307 million, according to the Florida Health Care Association.
State officials are especially afraid of losing non-profit homes, which on the whole have more staffing, better inspections and fewer lawsuits. Florida already has the nation's fourth-highest percent of for-profit homes, with 77 percent. The national average is 65 percent.

Beyond raising staffing levels, Florida can improve its nursing homes by also encouraging more locally owned homes whose goal isn't to make a profit, according to administrators of non-profit homes.

'Quality grows out of a culture of caring -- not just out of following the regulations,' said Elliott Palevsky, chief executive officer for River Garden Holding Co., the non-profit organization that owns River Garden Hebrew Home.

'That culture of caring does not easily occur when elder care is seen as a business,' he said.
The percentage of Florida nursing homes found in inspections to be providing deficient services increased during the 1990s, during the same period in which the percentage of homes violating staffing requirements doubled.


Nursing home violations rise; Life-threatening problems at some long- term centers worry state officials
Milwaukee Journal Sentinel April 8, 2001
STEVEN WALTERS of the Journal Sentinel staff

Madison -- Despite a steady drop in Wisconsin's nursing home population since 1996, the number of complaints and violations at facilities statewide has dramatically increased over that period. Officials say that is a sign that quality of care at a few homes has dangerously worsened.

Most troubling is the rise in life-threatening "immediate jeopardy" violations, cases so serious that nursing home inspectors are not allowed to leave the premises until they are resolved.

Nine such cases occurred in the first three months of this year, putting the state on pace to eclipse the record of 28 set in 2000. These violations are filed only when a resident is in danger or being hurt or killed, or has already been hurt or killed.

In Stevens Point, for example, four residents of a nursing home died over a five-week period, and inspectors faulted resident care in each case.
Marge Mattia of Menomonee Falls recalls finding her late mother overdosed from two narcotic pain patches she was mistakenly given in a Milwaukee-area nursing home, and visiting her mother another time to find a "huge egg" on her forehead from a fall.
Since 1996, the number of people in Wisconsin nursing homes fell by nearly 8%. Yet, the number of citations issued for state violations rose from 334 in 1996 to 504 in 2000, a 51% increase, state figures show. Citations for federal violations dropped by 8.3% over the same period, however.

The number of citizen complaints filed against nursing homes jumped 88% from 1996 to 2000, according to the state Board on Aging and Long Term Care.
George F. Potaracke, executive director of the board, says care in Wisconsin's most problem-plagued homes has never been worse in the 19 years he has been on the job.
"The severity of the deficiencies that we're finding in some Wisconsin homes concerns us," said Schroeder, director of the state Health and Family Services Department's Bureau of Quality Assurance. Under federal rules, homes with the worst violations can be fined hundreds of thousands of dollars, although specific complaints can take several months or years of negotiations to resolve.
According to reports, River Pines staff members did not call physicians for days, despite major changes in patients' vital signs and health warnings. They also let skin problems on the feet of a diabetic resident get so bad it led to amputation below his knee 11 days before his death. A podiatrist who finally saw the man said a toe bone was exposed.

Alleged care lapses at that home were "sobering," Schroeder said. "I am not aware, in talking with the staff, that there had ever been a case like this before."

River Pines is owned by Genesis Health Ventures, which owns several Wisconsin nursing homes, including two in Madison. The chain's homes are part of the estimated 14% of nursing homes in the state that are operating under bankruptcy protections.
Robson said the combination of paying nursing assistants fast-food industry wages while asking them to do "backbreaking, hard work" has resulted in care in some homes that threatens to kill patients.

Also, the national buying and selling of nursing homes "like pork bellies" has staggered the industry financially, she said.


Nursing home violations revealed
TULSA WORLD April 8, 2001

WASHINGTON -- A first-of-its kind congressional investigation reveals tales of horror inside Oklahoma's nursing homes.

Patients are described screaming in pain as they go weeks without the medication ordered by their doctors.

In another incident, a 99-year-old is hit by a staff member, but the laceration goes unreported and uninvestigated.

In another, diabetics never have their blood sugar levels checked and even when that basic medical care is provided, the improper amount of insulin is injected.

The study concludes that the state has a ''poor" record of complying with a decade-old law intended to stop abuses of residents and ensure they get appropriate care.
More than one out of every six nursing homes in Oklahoma during the 22-month period covered by the report had violations that either harmed residents or placed them at risk of death or serious injury.

Only 49 of 393 nursing homes in the state met all federal health and safety standards. Another seven were in "substantial" compliance.

At least one "serious" deficiency with the potential to "cause more than minimal harm to residents or worse" was found at 337 -- 86 percent -- of the state's facilities.
Other examples cited in the report covered cases of dehydration, lack of hygiene, problems with nutrition and failure to protect residents from abuse by other residents.
He had campaigned on the issue and in his request he cited the year-long scandal surrounding the Oklahoma State Department of Health, which regulates nursing homes, as well as a Tulsa World story showing that nearly 1,000 residents died in Oklahoma nursing homes since 1990 from largely preventable causes.
Still, the results of the analysis of both the annual inspections and the complaint databases led to the same conclusion that "many" facilities are failing to provide the care required by law and expected by families.
According to the report, an underlying reason for the "poor care" provided by some Oklahoma nursing homes is inadequate staffing and training.

? California

COMMENT:- This is an example of the sort of cases that so anger juries and result in massive punitive damages. This sick patient was dumped once her Medicare funding expired.

Nursing home to pay $5m Clovis center patient died after repeated complaints.
The Fresno Bee April 5, 2001
Michael Baker THE FRESNO BEE

A jury awarded $5.2 million Wednesday to a family whose mother died after a stay in a Clovis health-care center, where the family says the 65-year-old woman's illness went untreated.

"It's a case of a corporation worried more about their bottom line than an elderly person," said Stephen M. Garcia, the lawyer for the family of Margaret Muccianti. "They ignored her pains and her symptoms."

The lawyer said he wants the jury's large award, handed down in Fresno County Superior Court, to send a message to similar care companies.
The nine women and three men on the jury found that Willow Creek Health Care Center and its two parent companies -- Fountain View Inc. and Summit Care Corp. -- were negligent in their treatment of Muccianti during 1998.

Although the jury found that the entities did not cause Muccianti's death, jurors determined that the companies' willful misconduct caused physical injury and emotional distress.
Garcia (plaintiffs' lawyer) said it was not the actual caregivers who were at fault, but the companies that understaff and refuse to pay more than a minimum wage.
The pain was ignored as it progressively worsened, Garcia said.

"They neglected her needs for water, food," Garcia said. "She lost 31 pounds."

Muccianti became so ill she could not participate in the physical therapy for which she had come to the health-care center in the first place, Chandler said. When she stopped the rehabilitation program, Medicare stopped the payments that were specifically earmarked for the physical therapy, Chandler said.

Once the Medicare payments ceased, the amount Muccianti could afford to pay went from more than $600 to less than $100, Garcia said.

"They threw her out in a day" because they wanted to free up bed space for somebody who could pay, Garcia said.

On March 8, 1998, Muccianti left the health-care center. She died four days later, on March 12.


COMMENT:- In these web pages I have concentrated on the role of the for profit corporations in creating the health and aged care crisis. Government has however played its part. A philosophy of smaller government combined with selfish political opportunism has contributed. Politicians have played on citizens self interest by promising tax cuts and ignoring the consequences. The corporate lobby dishonestly promised that they could do more with less by increasing efficiency. Their claims fell on fertile political soil. As a consequence aged care funding has been cut and has not kept up with the needs of the community. Now that a crisis has developed politicians find that there is a massive shortfall. They do not have the funds to address the problem. It would be political suicide for them to renege on their promises and put up taxes.

We have exactly the same situation in Australia at present. Politicians deny the crisis in health and aged care and both major parties enter an election in 2001 promising not to increase taxes.

Funding cuts impact on those groups that genuinely try to staff their homes properly and provide good care - mostly not for profit groups. Those that cannot bring themselves to compromise care are forced to sell or close.

The Boston Globe April 7, 2001
By Anne Barnard, GLOBE STAFF

Three more Massachusetts nursing homes announced this week that they plan to close their doors, bringing to 53 the number of facilities shuttered since the beginning of 1999 and spotlighting the industry's distress over high operating costs and government reimbursements that do not cover expenses.
It's not that the home is poorly managed, he said. "The bills are paid. The staff is paid. But the owners have been putting hundreds of thousands of dollars into it every year just to keep the place open," he said. "It's crazy."
And as fewer homes shoulder larger burdens, patients may be in danger, the Governor's Health Care Task Force said last summer.
Nursing homes have been squeezed for several reasons. Labor costs, which make up 75 percent of their budgets, have soared as the economy booms and nurses, frustrated with increased workloads, demand higher pay or look elsewhere.
But the biggest problem, nursing home executives say, is Medicaid. The state-run health insurance plan for the poor pays only an average of $130 a day per patient, about $20 per patient per day below costs, said Scott Plumb, executive vice president of the Massachusetts Extended Care Federation, which represents most of the state's homes.
"But we don't sense the political will, in a state that just rolled income taxes back, to do that," Plumb said of the Lynch plan.

Two homes for elderly set to close; Low Medicaid rates are blamed for losses
TELEGRAM & GAZETTE April 06, 2001

Citing ridiculously low'' state Medicaid reimbursements, two Worcester nursing homes plan to close, forcing nearly 190 elderly residents to find new living quarters, and 220 employees to find new jobs.
This is a problem right through the nursing home industry,'' she said. We've been fortunate before now, but with these two homes closing, we have more people who need beds than there are available beds.''

Both nursing homes attributed the closings to severe losses caused by insufficient state Medicaid reimbursements. Seventy percent of the people living in nursing homes in Massachusetts rely on Medicaid to pay for their care, making Medicaid the largest source of revenue for most nursing homes, according to the Massachusetts Extended Care Federation.
The rate of payment for Medicaid from the state of Massachusetts is so ridiculously low that we cannot remain in business,'' said Mr. Flanagan. We went to the Department of Public Health and told them that, but those discussions did not yield any results. This is not something we wished to do. We have owned and operated this facility for 22 happy years.''
The past two years we have lost about 50 nursing homes and close to 4,000 beds in this state,'' he said. The first and foremost culprit is the inadequate Medicaid reimbursement rate.''
The system is broken, and it's unfortunate,'' Mr. Flanagan said. Massachusetts Medicaid is just not paying enough for the type of round-the-clock care that is necessary. This is a sad day.''


Report notes deficiencies in Tennessee nursing home system
Associated Press April 9, 2001, Monday, BC cycle
By TOM SHARP, Associated Press Writer

A report on Tennessee's $759 million nursing home industry recommends the Legislature change state law to target more of the money to care that directly affects patients.

It also urges quicker and more forceful action against nursing homes that fail to meet standards.
While many of the report's findings are critical, few are surprising. Problems within the industry and the state's oversight of it have been widely recognized for several years.
"The report validates the concerns we have raised about problems with nursing home quality of care," said AARP spokesman Brian McGuire. "It clearly talks about the need for reforming the way we pay nursing homes. The $800 million we spend in Tennessee could be better spent."
The report recommends that the state take a harder line in dealing with nursing home deficiencies.

"Sometimes the correction of a deficiency becomes less important to a nursing facility than defending itself against a monetary sanction," the report says.


Nursing Home Company Sued by Family of Dead San Pablo, Calif., Man
Contra Costa Times April 10, 2001, Tuesday
By Thomas Peele

The family of a man who died after breaking his hip in a San Pablo nursing home alleges in a lawsuit that the facility's corporate parent -- one of California's largest nursing home owners -- purposely under staffs nursing shifts to drive up profits.
The suit alleges that Lenox employs its "under staffing plan" throughout its California facilities and "purposely designed and established (it) for the purpose of reducing labor costs and increasing profits." The company keeps its homes staff "below the minimum levels and standards required by applicable federal and state laws."
Eric Carlson, an attorney with the National Senior Citizen Law Center in Los Angles, said that lawsuits such as the Pontier case underscore the root problems of the staffing crisis in California nursing homes. "Cases like this are random" he said.
Records show that during the home's last inspection -- on May 5, 2000 -- DHS cited it for 19 violations of federal nursing home law, including five involving "actual harm" to residents and one for creating "immediate jeopardy to resident health" involving patients' food. DHS inspectors enforce both federal and state laws.


Will care of the old improve? Nursing home money passes; doubts persist
The Arkansas Democrat-Gazette April 17, 2001, Tuesday

When he filled out the application for employment at the nursing home, he reported he had been fired or discharged from a previous job but said nothing about why.
Yet (
despite disturbing behaviour described) his employment continued until the nursing home received reports of the sexual abuse of not just one but three of its residents, including the rape of a 92-year-old patient, according to state surveys. Eventually, John Kelly, the nursing home employee, was convicted and sentenced to 35 years in prison for the rape.

Wrongdoing such as that in 1997, at what was then known as the Grant County Nursing Home in Sheridan, and scores of other allegations against nursing homes across the state pushed the standard of care at nursing homes to the top of the agenda this legislative session.

This legislative session pitted nursing home executives like Birkett against trial lawyers and advocates for nursing home residents as legislators grappled with the need to raise more money for the state's nursing home industry. Fierce debates flared over whether the industry should have caps on their liability costs and over whether enough was being done to make sure the state's nursing homes beef up staffing.
Legislators balked at a push from the nursing home industry to restrict the type of evidence that can be used in lawsuits against nursing homes and to limit the damages nursing homes might have to pay when sued.
Wilkes says that eventually the standard of care will start to slip as the nursing homes start looking for ways to bolster profits when the public isn't paying attention.
The elderly would be better off getting a motel room and ordering a daily pizza and hiring a nurse to check on them for two hours than checking into a nursing home, Wilkes maintained. And the cost, he said, would be less.
Ed Hogan, the administrator for Diversicare, was fired after the rape of the 92-year-old patient. He maintained in sworn testimony that he was made a scapegoat for rampant problems among Diversicare homes.


Nursing homes forge new way; Florida measure would cap awards, increase staffing and boost Medicaid
Modern Healthcare May 14, 2001, Monday
Vince Galloro

Florida's nursing home industry would get some relief from the resident-liability lawsuits that it claims are putting nursing homes across the state perilously close to bankruptcy under a bill approved earlier this month by the Republican-dominated state Legislature.

The comprehensive bill would set some caps on resident-liability lawsuit awards and boost staffing requirements, but it also would provide Medicaid reimbursements to pay for some of the staffing increases.

Gov. Jeb Bush, a Republican, is widely expected to sign the bill into law.
The bill also would boost staffing requirements, and the state Agency for Health Care Administration would increase its scrutiny of both nursing and assisted-living facilities.


Hard winter, Nursing homes run short of comfort and care for residents in their final season of life.
Newsleader Sunday, May 20, 2001
By Kristie DiSalvo

A woman living at the former District Home in Waynesboro used to keep a towel in reach at all times.

"Why?" asked an inspector in April 1998.

To soak up urine, she said.

"If I have to go, they don't answer my call light for 45 minutes."

But that's not all.
The District Home closed in October 1999. But across the county and throughout the Valley, inspection reports obtained through the Freedom of Information Act detail similar tales of poor care and overworked staffers.
With all of those people to change, feed, bring to the bathroom and bathe, many residents were neglected, they said.

"We can't give them the care they need; we can't talk to them," one unnamed assistant said in Oak Hill's state inspection report.

Of the seven nursing homes in The News Leader's coverage area (five in Augusta County, Staunton or Waynesboro; and two in Rockbridge County):

  • Five were cited last year for failing to report abuse or for hiring people with a history of abuse.
  • Two did not treat or prevent all bed sores.
  • Two did not employ enough staff.
  • Two did not prevent accidents or falls by some residents.
  • Four did not develop care plans for residents.
  • Five did not properly assess changes in residents' conditions.

Shenandoah Valley Health Care Center of Buena Vista is the only nursing home that met all state regulations in their most recent two inspections filed as of early April.

All others have had at least one summary inspection finding of "not in compliance" during the past 12 months.

Last year in the state, Adult Protective Services investigated 1,492 abuse or neglect complaints in Virginia's 286 nursing homes.

And more than half of the complaints made to the state's ombudsman office are related to staffing problems, according to Mark Miller, the department's former director.
(Comment:- After failing to notify her doctor of a patients changed condition she stopped breathing and went blue)
Not one of the 10 staffers on duty that day administered CPR. And no one stayed with her until the rescue squad arrived. The situation that EMTs found when they walked in angered one rescue worker so much that he reported the home to state officials.

Yet the only threat of punishment for the District Home was the denial of Medicaid payments for new admissions, and only if the facility did not try to correct violations within three months.
Toby Edelman, staff attorney for the Center for Medicare Advocacy, said nursing homes with documented problems must make corrections, but they avoid punishment in 99 percent of cases.

"That's not exactly a tough system; it's one that tolerates poor care," she said.
What their affiliates in the Virginia Department of Health often have found in Augusta County, Rockbridge County, Waynesboro and Staunton are residents left sitting in urine, pressure sores on residents who are not turned and feces and wet diapers on bathroom floors.

But the Health Care Financing Administration instructs investigators to limit fines in almost all cases, according to Edelman.
Despite a multitude of registered infractions of all severities -- none of the nursing homes in The News Leader's coverage area have been fined during the past two years, according to Carol Messick, spokesperson for the Health Care Finance Administration, which oversees nursing home regulations.
Government provides a majority of the funds to run hundreds of facilities, but how closely it monitors care, and the lack of safeguards in Virginia particularly, has been disputed.
"The real cause of the problem is that it's a for-profit industry that shouldn't be. That's very clear," said Laura Katz Olson, a professor at Lehigh University in Pennsylvania and an expert on elderly issues.

"The government is pouring money into a sector that's profiting and nothing else."


Nursing homes seek staff flexibility bill
Mick Hinton, Capitol Bureau

Oklahoma's powerful nursing home industry is making a last-minute effort to junk staffing requirements for nursing home shifts in a move an official said will weaken a reform law passed in the wake of last year's nursing home scandal.

Nursing home ombudsman Esther Hauser said Thursday she recently learned of the attempt, and questioned why nursing home lobbyists were rushing to get a bill passed without any public discussion in the last days of the 2001 legislative session.

Kelly Hardin of Enid, president of the Oklahoma Nursing Home Association, said the industry needs more staffing flexibility.
Cain said the industry last year agreed to the staffing requirements per shift on the heels of a Health Department scandal involving nursing homes. In return, the nursing homes were granted a huge daily rate increase - from $ 67 to $ 90, he said.

"They didn't have any problem with the requirements a year ago," Cain said.

Nurse admits falsifying records
The Associated Press State & Local Wire May 24, 2001

A former nurse at a Bethlehem nursing home pleaded guilty in federal court to falsifying medical records to cover up a medication error in a patient who later died.
Taibi changed the medical records to show she had decreased the dosage, and forged the initials of several nurses on the documents, according to court papers.
"But for the complaint from the family and their own investigation, this wouldn't have come to light," Hoffman said.


Nursing homes still protesting state's wage pass-through calculations
The Business Journal May 18, 2001

A final audit of state funds allocated for increasing wages of workers in nursing homes shows $3.1 million out of $19.4 million budgeted has not been passed along in the form of wage increases.

As a result, any nursing homes that did not use the allocated money for wage increases will have to pay that money back to the state.

The audit found 91 homes out of 418 that did not administer any wage increase, or administered only a partial increase, in fiscal 2000. In fiscal 2001, the state projects that 76 homes will fall into either of those two categories.
To address the severe worker shortage in the nursing home industry, money was included in the 1999-2001 state budget to help raise wages as a way to retain and attract more workers.
A preliminary audit on the wage passthrough funding was conducted by the Department of Health & Family Services late last year after nursing home workers complained to legislators about not receiving the 5 percent wage increase mandated in the budget.
That audit showed $1.9 million out of the $8.3 million allocated for fiscal 2000 was not used for wage increases.

Representatives of the nursing home industry questioned the methodology used in the audit to determine whether wage increases were implemented or not.


Page I contains extracts from articles published between 1996 and 1999  


This page contains extracts from articles published between June 2001 and August 2003

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This page created March 2001, last updated and revised Aug 2001 by Michael Wynne