REVIEW REFERENCCES CONTINUED
CORPORATE NURSING HOME CHAINS
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.

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.

HEALTH-CARE INDUSTRY TOPS LOBBYING'S BIG SPENDERS; TECHNOLOGY, FINANCE INDUSTRIES ALSO CITED AS MAJOR INFLUENCES
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.
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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.
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Mariner, like the other two, cited cuts in Medicare payments as part of its financial troubles.
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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.
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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.

Maryland

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.
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"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."
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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.
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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.
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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.
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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.
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"If we don't fix this system soon, it will be really broken," Ms. Richmond said.
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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.
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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.
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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. "
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Through U.S. Strategies Corp., the industry took issue with what it called "particularly outrageous GAO statements."
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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.
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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.
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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:
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The judges all said they were worried about a phenomenon called "transfer trauma."
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"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.
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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.
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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.
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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."
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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.
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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."
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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.
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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.
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Across the country, 10 percent of all nursing facilities are under bankruptcy proceedings.
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How did this happen?

"A FURY TO BUY"

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.
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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.

LABOR, LABOR

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),
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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.
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DEFICIENCY REPORTS

Reviewing the deficiency reports (which are available online for all NH nursing homes at www.HCFA.gov) 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.

BACK TO LABOR

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.
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"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.
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"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.
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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.
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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.
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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.
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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
<http://www.kiplinger.com/retreport/archives/2000/March/rethome.htm>

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.
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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.
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"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.
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"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."
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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.
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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.

50 NURSING HOMES SUE OVER MEDICAID CUTS; --- PATIENT CARE TO FALL BELOW WHAT LAW REQUIRES, THEY SAY
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.
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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.
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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.

NURSING HOMES WANT SUIT LIMITS; LOBBYISTS: BANKRUPTCIES SHOW NEED FOR TIGHTER 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.
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Seven chains that operate in Florida - four of them locally - have filed for Chapter 11 bankruptcy protection from creditors in the past six months.
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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.
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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.
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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.
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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.

Florida

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

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."

Colorado

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.

Florida

NURSING HOMES; DO THEY HAVE ONE FOOT IN THE GRAVE?; MANY FACILITIES CLAIM SKYROCKETING INSURANCE COSTS ARE DRIVING THEM UNDER;
THE ORLANDO SENTINEL March 26, 2000 Sunday, METRO

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."

NURSING-HOME 'CRISIS' GOES BEYOND LAWSUITS
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.

California

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

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.

Florida

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.

LAWMAKERS LOOK FOR SOLUTIONS; NURSING HOMES IN FLORIDA
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.

NURSING HOMES FACING SQUEEZE
THE ORLANDO SENTINEL April 9, 2000 Sunday, CENTRAL FLORIDA

'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.

FOR-PROFIT NURSING HOMES: REAL CRISIS IS RESIDENT CARE
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.

Washington

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.

BANKRUPTCIES HURT CARE
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.
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(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.
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Many of those bankruptcies were precipitated by the inability to make good on debt accumulated from acquisitions.
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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.
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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.
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Tandem Health Care, based in Moon Township, Pa., is one new firm that has won private equity backing.
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Bargain hunting. Deering (from Tandem Health Care ) says that the industry's financial upheaval is creating opportunities for companies like his.
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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, - - - - - - - .
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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.

Massachusetts

Aid cuts create nursing home ills; Low wages, rivalry add to woes
TELEGRAM & GAZETTE May 19, 2000

- 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.
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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.''
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Meanwhile, advocates for nursing home residents are concerned about the welfare of senior citizens displaced when a nursing home shuts down.
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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.''
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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.
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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.

Maryland

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.
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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."

Florida

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.

NURSING HOMES IN CRISIS
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.
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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.
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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.
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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.
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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.
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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.
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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.
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Some say the federal government should provide more funding. Others say nursing homes should have been more prudent about the costs they were paying.
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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.
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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.
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-- 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.
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'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.
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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.
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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.
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'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.
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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.
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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.
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But critics say the industry made its own bed by defrauding government programs and taking advantage of a liberal reimbursement system.
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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.
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"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."
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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.
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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.
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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."
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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.
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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.
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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.
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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.

Florida

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