I went through a set of whipsawing emotions recently. On September
20, I happily conferred the 2007 OPTIMA Award on Ballard Healthcare in
Chicago. You read their story in last month's issue ("Sailing
to Success," p. 24). The ceremony included one of the most amazing
displays of nursing home staff creativity I've ever seen--a virtual
world tour in one hour, with staffers displaying the costumes, music,
and dances of countries from a half-dozen areas of the world. This was
in keeping with their program's "virtual world tour"
theme of "Passage to Discovery." I returned from Chicago on a
bit of a high, grateful to have been part of the OPTIMA Award process
for the past 12 years.
The hammer descended on September 23--a Sunday New York Times
front-page article describing how private investment firms have been
purchasing major nursing home chains and cutting costs allegedly to the
point of serious decrements to quality and resident safety. The article
cited CMS data indicating that nursing homes acquired by such firms
before 2006 scored worse than the national nursing home rates on 12 of
14 quality indicators, including preventable pressure ulcers,
infections, and falls. Yet corporate structures had been devised to
insulate these firms against survey citations or legal prosecution for
substandard care.
The article noted that private investment firms had agreed to
purchase six of the nation's largest chains in recent years,
accounting for 141,000--or 9%--of the nation's long-term care beds.
These companies had, on average, achieved profits 41% greater than those
of the facilities they didn't own.
Although most of the firms named in the article declined to
comment, one did, under the well-known (to our field) name of Arnold
Whitman, speaking on behalf of Formation Capital, recent acquirer of
Genesis Healthcare. Whitman noted that private investment firms had in
effect rescued nursing homes from an over-litigious society that was
chintzy on financial support had, in fact, injected much-needed funding
that no one else would provide in today's market. Later on, the
trade organization for the major chains, the Alliance for Quality
Nursing Home Care, said in a release that its members were fully on
board with those recent quality initiatives that, as even the Times
article noted, were making a noticeable impact on the field overall.
But I couldn't escape the feeling that the private investment
industry's major takeover of the field--and major it is, with some
of the most stellar names in long-term care involved--was nothing other
than the logical outcome of the forces impinging on today's
long-term care: the unstable reimbursement, the legal exposure, the
regulation that often seems arbitrary and capricious. In a profit-making
field--and there's nothing wrong with profits if they're used
appropriately, as more than a few OPTIMA Award winners can attest--why
wouldn't private investors attempt to control costs to the utmost
while shielding themselves from society's negative firepower? We
may not like it--in fact, may feel disheartened altogether--but it does
seem logical.
If there was ever a signal for a more enlightened approach to
American long-term care, we just might have received it.
To send your comments on this editorial to the author and editors,
e-mail peck1007@nursinghomesmagazine.com.
BY RICHARD L. PECK, EDITOR-IN-CHIEF
COPYRIGHT 2007 Vendome Group
LLC Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.
Copyright 2007, Gale Group. All rights
reserved. Gale Group is a Thomson Corporation Company.
NOTE: All illustrations and photos have been removed from this article.