Millions of Americans entrust nursing homes with the health and safety of our loved ones. Do they deserve this trust?
If there’s one thing that TheLawFirm.com readers know, it’s that when the profit motive reigns supreme, it means consumers beware. In our latest in-depth look at issues impacting the health and safety of you and your loved ones, TheLawFirm.com examines the rapidly expanding—and increasingly profit-driven—nursing home industry, and the rising level of concern many observers are expressing over a declining level of care.
What is a nursing home?
It might seem like a basic question, but with the recent profusion of long-term care options for seniors, it is important to consider their differences when evaluating which one is most suitable for your loved one. So, what is a nursing home, and how does one differ from other long-term care facilities?
One way to distinguish among long-term care providers is by the location in which the services are provided. For example, the United States Centers for Disease Control and Prevention (CDC) characterize adult day services centers as providing care in the community; home health agencies as providing care in the home; assisted living facilities as providing care in a residential care community; and nursing homes and hospices as providing care in an institution. The appropriate location varies on a case-by-case basis and is determined by such factors as the degree of independence the individual possesses, the severity of a patient’s condition, and the need for special care or facilities.
TheLawFirm.com Fact: How Much Does the Federal Government Pay on Nursing Homes?
The massive federal programs Medicaid and Medicare combined pay over $80 billion annually on nursing home care alone.
(That dripping sound you hear is nursing home owners salivating.)
A different yet related way to categorize long-term care facilities is by the severity of the individual’s condition. For individuals who retain a great deal of independence and do not require constant monitoring or supervision, an adult service center may be the best option. For those requiring more complicated or specialized care but who retain some degree of independence and are able to continue living at home, home health agencies are probably a strong choice. And so on with residential care facilities, nursing homes, and hospices each dealing with patients requiring progressively greater levels of care and monitoring.
Even among nursing homes, facilities vary widely in terms of their feel and the intensity of care provided. Some nursing homes may be designed to feel more like a residence, while others contain features more reminiscent of a hospital. While people most often associate nursing homes with the elderly, they also serve a variety of other individuals requiring 24-hour care. Nursing homes are required by law and regulation to provide a higher standard of care than residential care facilities.
TheLawFirm.com Sidebar: Long-Term Care Facilities
As the American population ages, options for long-term care facilities have expanded. The Centers for Disease Control and Prevention (CDC), for example, distinguish among adult day services centers, home health agencies, assisted living facilities, nursing homes, and hospices. Here is a quick primer on each.
Adult Day Service Centers
According to the CDC, in 2014, approximately 4,800 adult day service centers served an average of about 280,000 patients per day. These community-based centers serve patients who do not require constant care or supervision but who may need regular healthcare attention.
Home Health Agencies
As their name implies, home health agencies provide a wide variety of patient care within the home. This allows patients to stay close to loved ones in a familiar environment while still receiving the medical attention they need. However, some conditions require specialized services that cannot be delivered in the home, and in-home services can be quite expensive.
Residential Care Facilities
Residential care facilities such as assisted living centers vary widely in the level of services and medical care provided. At one end of the spectrum, residential care facilities might resemble something closer to a full-service senior community, while others offer services such as special care units for patients suffering from dementia.
According to the National Library of Medicine, a nursing home is “a place for people who don’t need to be in a hospital but can’t be cared for at home. Most nursing homes have nursing aides and skilled nurses on hand 24 hours a day.”
Hospice care is “end-of-life care” typically reserved for patients expected to survive no longer than 6 months. It is focused on providing “medical, psychological, and spiritual support” with the aim of granting “peace, comfort, and dignity” to patients in their final days.
Nursing Home Care: An Industry on the Rise as a Population Ages
It has been no secret over recent years that, as a matter of demographics, the population of the United States—along with most rich, developed countries—is aging (See “TheLawFirm.com Sidebar: America’s Aging Population”). The historically large Baby Boomer generation increasingly is retiring and requiring the kinds of additional assistance that comes with advanced age. With more and more families relying on multiple incomes to make ends meet, fewer family members are able to remain at home to provide the kind of dedicated, in-home care and supervision elderly loved ones require. As a result, families increasingly have been turning to nursing homes as a means of obtaining the long-term care and attention their relatives need.
TheLawFirm.com Sidebar: America’s Aging Population
According to U.S. Census Bureau Data, the so-called “Boomer Generation Effect” will continue to heavily impact American age demographics in coming years, much as it has for decades. The 2010 Census recorded over 40 million Americans aged 65 or older, accounting for approximately 13% of the national population. Both were record highs likely to be outdone by the 2020 figures.
Based on current trends, it is estimated that by 2050, the population of Americans aged 65 or older will have nearly doubled, to over 80 million. The same trend is observed in the oldest age category, those aged 85 or older, which is expected to expand from 5.9 million in 2012 to 8.9 million in 2030 and 18 million in 2050.
In the most recent data available from the Centers for Disease Control and Prevention (CDC), researchers found that in 2014 “about 67,000 paid, regulated long-term care services providers served about nine million people in the United States.” These long-term care service providers included approximately 15,600 nursing homes caring for about 1.4 million residents. It is estimated that figures have only increased since that time. For example, the Health in Aging Foundation calculates that there are presently about 1.6 million nursing home residents in the United States.
Why do people seek nursing home care?
The reasons for seeking nursing home care vary somewhat from individual to individual, but what almost all residents share is a need for assistance with what are known as “activities of daily living” (ADLs). ADLs include everything from eating to bathing to dressing to using the bathroom, the quotidian habits so many of us take for granted every day. According to the Health in Aging Foundation, 80% of nursing home residents require assistance with at least 3 different ADLs, assistance that quality nursing homes are able to provide.
The physical ailments requiring such assistance vary somewhat, but again there are some commonalities. Health In Aging reports that:
• 90% of nursing home residents who are able to walk require assistance or supervision when doing so
• More than 50% of nursing home residents suffer from bowel or bladder incontinence
• Over 33% have impaired sight and/or hearing
Many individuals require nursing home care for mental health reasons, as well. In fact, dementia is the most common issue afflicting nursing home residents, impacting between half and three-quarters of the total population. Over 75% percent of nursing home residents suffer from decision-making issues, and about two thirds exhibit memory loss or trouble knowing where they are.
These conditions clearly require a competent, motivated staff on the job 24 hours a day, 7 days a week, and some nursing homes do provide such care. These well-performing institutions and their staffs deserve to be lauded for their good and important work. Unfortunately, however, far too many unscrupulous owners and operators have entered the nursing home industry with the motivation not of providing quality care, but of amassing great wealth. (For example, see the story of billionaire Brius Healthcare CEO Shlomo Rechnitz in “TheLawFirm.com Case Study: Brius Healthcare”, below.)
If you or a loved one has suffered harm as a result of nursing home negligence or neglect, contact the experienced team of attorneys at TheLawFirm.com now for a free consultation.
TheLawFirm.com Sidebar: Risk Factors for Nursing Home Admission
According to the Health in Aging Foundation, the following represent the major risk factors for being admitted into a nursing home:
• Age (1.1% of individuals aged 65-74 live in nursing homes, as compared to 15% of people aged 85 or over)
• Income (Low income individuals are more likely to find themselves in a nursing home, a main reason why Medicare and Medicaid payments are such a cash cow for nursing home operators)
• Lack of Family Support (Individuals without a spouse and/or children are more likely to end up in a nursing home)
• Limited Social Engagement with Others
• Physical or mental impairments
Choosing a Quality Nursing Home
Choosing a nursing home to care for a loved one can be a daunting and overwhelming task. Just reaching the decision that a nursing home is needed can be difficult enough, then comes the step of choosing the right one. There are so many important factors to consider—from quality of care to location to cost—all with the health and well-being of a beloved individual in the balance.Do Your Homework
The single most important thing one can do to help ensure a quality choice of nursing home is gather as much quality information as possible. Thanks to the internet, this information is more widely and easily available than ever. For example, the Centers for Medicare and Medicaid Services collect nursing home data across a variety of parameters and then make the information publicly available to consumers via their Medicare.gov Nursing Home Compare tool. Also, check to see if your state or municipality’s department of health provides publicly available information about nursing home complaints, violations, and penalties. If you have access to the internet—which you do if you’re reading this—much of the information you need is right at your fingertips.Do Your Legwork
However, when it comes to the health and safety of a loved one, nothing beats good, old-fashioned legwork. One should try to visit as many different nursing homes as possible to get a feel for the various facilities, their staffs, the services provided, and the overall ambiance. Unlike so many industries today, nursing homes remain a highly person-to-person, patient-care oriented business. The friendliness, passion, and dedication of individual staff members will have a direct impact on your loved one, so it is important not to rely too much on the raw data in reaching a decision.Be Prepared to Defend the Resident’s Rights Vigorously
While some laws do exist that protect nursing home residents, and while there are passionate, knowledgeable attorneys like those at TheLawFirm.com willing to take up the cause when called upon, ultimately it comes down to the individual and his or her loved ones to ensure that a nursing home resident’s rights are being respected and that he or she is receiving the appropriate level of care. If you have questions about the care you or your loved one is receiving from a nursing home, contact the expert attorneys at TheLawFirm.com today for a free legal consultation.
TheLawFirm.com Sidebar: The Signs of Quality Nursing Home Care
The Health In Aging Foundation, a non-profit founded by the American Geriatrics Society, encourages family members to form a “partnership relationship” with nursing home staff to help ensure proper and attentive care for their loved one. Health In Aging also suggests paying close attention to the following factors in selecting a nursing home and monitoring the quality of care once a loved one has entered the home:
Licenses, Certifications, and Qualifications
• Is the nursing home properly licensed?
• Does the nursing home qualify for Medicaid / Medicare?
• Has the nursing home been subject to any disciplinary action from regulatory authorities?
• What is the reputation of the nursing home’s owner/operator? Does it own other facilities?
• What is their reputation?
• Does the nursing home offer:
• On-site physical therapy services?
• A special unit for adults with dementia and/or memory loss?
• Wound management for residents who develop bed sores?
Quality of Staff
• Does the staff seem:
• Friendly and open to the input and involvement of family members?
• Easily available for regular communication?
• Prepared to engage in a partner relationship with family members?
• Health In Aging also urges family members to meet the nursing home administrator and nursing director, the two central leadership positions responsible for overall quality of care at the facility
Cleanliness & Attention to Safety of Residents
• Does the nursing home:
• Appear clean and sanitized? Attention to detail matters
• Seem sufficiently staffed during all shifts?
• Have emergency plans in place and clear emergency demarcations?
Warning Signs of Abuse and Neglect at Nursing Homes
As much as one would hope that everyone involved in the nursing home industry from the owners on down nurses and orderlies would approach their work with a passion for quality care, unfortunately TheLawFirm.com readers known this is not how large, highly profitable industries tend to work. Throw in billions of dollars pumped into the system by susceptible public programs such as Medicare, Medicaid, and MediCal, and the nursing home industry is ripe for exploitation by unscrupulous profiteers. So how is a family member or guardian to ensure that his or her loved one receives the best care possible?
The signs of abuse and neglect are largely what one might expect: Are residents wearing dingy or dirty clothes? Is their skin dirty? Are residents developing a high number of bed sores? Do they look malnourished? Do residents have unexplained bruises? Are bed guardrails kept in an elevated position? (This can be a health issue for elderly residents.)
TheLawFirm.com Sidebar: What do you do if you notice signs of neglect or abuse at a nursing home?
According to the Health in Aging Foundation, if one identifies signs of neglect and/or abuse in any resident at a nursing home (not just his or her loved one), he or she should:
• Report the concern to a member of the nursing staff
•If this does not resolve the matter to the individual’s satisfaction, report the matter to an ombudsman, who is responsible for handling possible violations
•If the matter still is not resolved to satisfaction, contact the state or local department of health
Payments to Related Businesses: The New Nursing Home Profit Model
As profiteers increasingly have targeted nursing homes as an easily exploitable industry—largely due to the enormous sums paid out by government programs—one of the strategies they have used to maximize their profits while minimizing their legal exposure for poor quality of care is create a web of related but separate businesses, which the nursing home owner then hires to provide goods and services.
For example, a nursing home owner might create one limited liability company (LLC) that performs nursing care, another that provides janitorial services, another that executes managerial duties, and so on. Some nursing homes even lease their premises from a related entity that owns the property. The practice is so prevalent that a study by Kaiser Health News found that almost 75% of nursing homes in the United States engage in some manner of what it terms “related party transactions”.
These arrangements, though legally and administratively complex, offer numerous potential benefits to nursing home owners. First, by engaging with related companies rather than third parties, the nursing home owners are able to avoid arm’s-length negotiations that result in a portion of their profits being paid to somebody else. This opens the potential for the nursing homes to overpay—or in some instances, underpay—for such services, and for the owners—who ultimately own all of the companies involved—to reap the benefits. Second, these webs of related businesses are able to shuffle money around in creative ways so as to achieve maximum tax benefits, again helping to line the owner’s pockets. (When exploiting government programs for personal profit, why ruin a good thing by paying back one’s fair share in taxes?) Finally, these complex arrangements make it more difficult for patients to hold nursing home owners legally accountable, as they must navigate a maze of potential defendants to get to the deep pockets, and even then getting to the money may prove impossible, as it may already have been siphoned away to other entities.
These practices have real consequences on the well-being of nursing home residents. According to the Kaiser Health News Study, compared to independent nursing homes, homes that outsource the provision of goods and services to related companies, on average: employed 8% fewer nurses and aides; totaled 53 substantiated complaints per 1,000 beds (as compared to 32 for independent nursing homes); and were fined 22% more often for serious health violations. Still trust that big corporate brand name nursing home more than the smaller, independent operation? You might want to think again.
TheLawFirm.com Case Study: Brius Healthcare
Brius Healthcare, with around 80 for-profit nursing homes throughout California, is a perfect case study in the modern nursing home industry. The National Union of Healthcare Workers (NUHW) has released a comprehensive report exposing the company’s network of insider transactions, which the report’s authors contend has allowed Brius CEO Shlomo Rechnitz, his relatives, and associates to profit improperly by overcharging on a range of goods and services. These practices not only amount to stealing money from taxpayers and patients, they have a real impact on health and safety, limiting the resources available for proper patient care. Among the NUHW’s findings:
• Brius Healthcare makes in the neighborhood of 80% of its profits off government payments, namely from Medicare and Medicaid—channeled via MediCal in the state of California. In 2015, this amounted to over $500 million from taxpayer-funded programs alone.
• Brius CEO Schlomo Rechnitz and his relatives control over 65 different entities that do business with Brius nursing homes, which Brius paid over $67 million for goods and services over a single year (2015).
• Approximately 2 out of every 3 dollars that Brius pays to a related company goes to entities serving as landlords to its nursing home operations.
• On a county-by-county basis, Brius paid over one-third more per nursing home bed that other nursing homes. NUHW estimates that “insider” companies earned as much as $12 million extra off these inflated payments in 2015 alone.
• These additional expenses have hardly resulted in improved care: The California Department of Public Health has denied at least 5 of Brius’ attempts to take over additional nursing homes, citing among other evidence Brius’ nearly 400 documented serious patient care violations over just a three-year span.
• As further evidence of Brius’ substandard care, an investigation by the Sacremento Bee revealed that in 2014, state authorities cited Brius for 3 times as many serious deficiencies per 1,000 beds than the statewide average.
• Publicly available data revealed that in 2015 companies related to CEO Rechnitz held more than $23 million in debt owed by Brius nursing homes, though state rules do not require the companies to report on interest rates and other lending expenses, or on whether they are commensurate with market rates.
• In one of CEO Rechnitz’s more “creative” (or egregious) maneuvers, he created a financial services company to whom Brius nursing homes paid over $3.5 million dollars for financial advice and accounting statement review.
• Some of the Rechnitz-related entities appear to exist on paper only, acting merely as conduits for rents that in some cases the NUHW identified to be up to 50% above market. In some cases identified by the NUHW, Rechnitz himself signed the lease agreement as both landlord and tenant.
Brius Healthcare and its CEO Schlomo Rechnitz—a billionaire living comfortably in Southern California—are a quintessential example of what has gone wrong with our nation’s nursing home industry. Unscrupulous profiteers have invaded the marketplace, snatching up as many nursing homes as they can as they expand their empires without regard for the well-being of patients or even their own employees.
That’s why it is more important now than ever to do your homework when choosing a nursing home or other extended-care facility for your loved one. And, when you or someone you know suffers from substandard care, it is important to be vigilant in defending your rights. The expert attorneys at TheLawFirm.com are standing by now for a free consultation.
On This Page
What is a nursing home?
Nursing home care
Choosing a quality nursing home
Warning signs of nursing home neglect
Nursing home profit model
Articles Related To: Nursing Home Neglect
Free Case Review
Sources: National Institutes of Health (NIH) U.S. National Library of Medicine “Nursing Homes” National Center on Elder Abuse (NCEA) Research: Statistics/Data United States Centers for Disease Control and Prevention (CDC) “Long-Term Care Providers and Services Users in the United States: Data from the National Study of Long-Term Care Providers, 2013-2014” The Health In Aging Foundation “Aging & Health A to Z: Nursing Homes” Health In Aging Foundation “Ensuring Quality Nursing Home Care: Before you choose a nursing home” Health In Aging Foundation “Ensuring Quality Nursing Home Care: Before you choose a nursing home”