Skilled Nursing News reported that a federal bankruptcy judge approved HCR ManorCare’s prepackaged Chapter 11 plan to emerge from bankruptcy under the ownership of its landlord, Quality Care Properties (QCP). QCP will lose its status as a real estate investment trust (REIT). The action means ManorCare is the largest long-term care chain which operates 295 skilled nursing and assisted living facilities to go through the process over the last decade, according to Reuters.
CNBC reported that Wall Street titans Goldman Sachs asked the incredible and amoral question: “Is curing patients a sustainable business model?” Goldman Sachs addressed biotech companies, especially those involved in the pioneering “gene therapy” treatment and wondered if cures could be bad for business in the long run.
“Is curing patients a sustainable business model?” analysts ask in an April 10 report entitled “The Genome Revolution.”
“The potential to deliver ‘one shot cures’ is one of the most attractive aspects of gene therapy, genetically-engineered cell therapy and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies,” analyst Salveen Richter wrote in the note to clients. “While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow.”
Richter cited Gilead Sciences’ treatments for hepatitis C, which achieved cure rates of more than 90 percent. The company’s U.S. sales for these hepatitis C treatments peaked at $12.5 billion in 2015, but have been falling ever since. Goldman estimates the U.S. sales for these treatments will be less than $4 billion this year, according to a table in the report.
“GILD is a case in point, where the success of its hepatitis C franchise has gradually exhausted the available pool of treatable patients,” the analyst wrote. “In the case of infectious diseases such as hepatitis C, curing existing patients also decreases the number of carriers able to transmit the virus to new patients, thus the incident pool also declines … Where an incident pool remains stable (eg, in cancer) the potential for a cure poses less risk to the sustainability of a franchise.”
The report suggested three potential solutions for biotech firms:
“Solution 1: Address large markets: Hemophilia is a $9-10bn WW market (hemophilia A, B), growing at ~6-7% annually.”
“Solution 2: Address disorders with high incidence: Spinal muscular atrophy (SMA) affects the cells (neurons) in the spinal cord, impacting the ability to walk, eat, or breathe.”
“Solution 3: Constant innovation and portfolio expansion: There are hundreds of inherited retinal diseases (genetics forms of blindness) … Pace of innovation will also play a role as future programs can offset the declining revenue trajectory of prior assets.”
McKnight’s had an interesting article about the changing demographics in nursing homes throughout the United States. Younger residents are using facilities more often — bringing with them fewer physical demands and more behavioral health diagnoses. Across the country, the under-65 proportion of residents climbed steadily from 16.5% of residents in 2011 to 17.4% in 2015. The rate jumped most for those between 55 and 64, up from 9.8 % to 11.1% in 2015.
“We’ve typically had this image of a nursing home of being (for) older adults, and now they are middle older adults,” said Ian Matt Nelson, a research scholar at Miami University’s Scripps Gerontology Center. Nelson recently co-authored a report on this new generation of nursing home residents for the state of Ohio, where 20% of Medicaid long-stay residents were under 65 in 2015. That puts it 11th in the nation.
Co-author John Bowblis told McKnight’s that unpublished data from the study shows Utah leads the nation in the prevalence of young long-term care Medicaid patients, followed by Illinois, Nevada, Missouri and Arizona.
Almost half of the young Ohio residents had a diagnosis of severe mental illness — including bipolar disorder or schizophrenia — and nearly a quarter had paralysis. Those numbers compared to one-quarter and one-tenth, respectively, among seniors.
Meanwhile, younger residents are less likely to need help with activities of daily living that nursing home workers are typically trained to handle. In 2015, 28% of Ohio’s under-65 population had one or fewer ADLs.
Katherine Judge, a professor of psychology at Cleveland State University, told Crain’s Cleveland that younger adults will present a challenge for nursing homes.
“I think the implications are what are we doing on the community side and on the nursing home side to address the needs?” Judge asked. “It’s not clear for example what community services would best meet the needs of these individuals, or at this point how nursing homes might be able to offer different services to address their needs.”
The Kansas City Star had an interesting article about Skyline Healthcare–whose headquarters are above a pizza parlor in New Jersey. Last month, the Kansas Department for Aging and Disability Services petitioned the courts to take control of Skyline’s 15 nursing homes across Kansas, saying Skyline was on the brink of financial collapse and 845 nursing home residents were at risk. Nebraska officials had taken similar action about a week earlier with 21 facilities owned by a subsidiary of Skyline.
Formed in 2008, Skyline grew exponentially as its owners took over operations of 110 nursing homes in six states between 2015 and 2017. In two years, Skyline — through dozens of subsidiary LLCs — took control of dozens of homes in Massachusetts, Florida, Arkansas, Nebraska, Kansas and South Dakota.
William Murray III, an attorney who has filed malpractice and neglect suits against Skyline nursing homes in several states, said the numerous LLCs associated with Skyline — like Dorothy Healthcare Management — are gimmicks.
“Oftentimes in the change of ownership process, new operators will create companies that have no track record and no history, even though the people behind them do, in order to escape any scrutiny about whether they’re qualified to take over the facilities,” Murray said.
“Where are all the people who supposedly work on the second floor of a New Jersey pizza parlor? The people who are supposedly working for Dorothy Healthcare Management, taking care of all these frail, elderly Kansans?”
When Skyline took over the ownership and operation of the nursing homes, vendors didn’t get paid and staff paychecks would be direct deposited, taken back and then re-issued days later on paper checks.
“I really think there needs to be a more intensive financial review for them coming in,” said Cindy Luxem, the executive director of the Kansas Health Care Association. “Because I honestly don’t believe the Skyline people had a year’s worth of working capital.” “The people that own Skyline, they’re not health care providers,” Luxem said. “They’re merely people looking for an investment. Unfortunately, there’s a lot of that in our industry right now, but I wish the state of Kansas had a little bit better checks and balances on people coming into our state.”
The company was owned by a single family, the Schwartzes (Joseph, Rosie, Michael and Louis). Stephen Monroe, a partner at a research firm called Irving Levin Associates that specializes in the senior housing and health care investment markets, said nursing home industry watchers used to joke about their office above the pizza joint in Wood-Ridge, N.J.
“It’s a group of good ol’ boys from the East Coast buying up a whole bunch of nursing homes in the Midwest because we’re the cheaper ones,” said Carol Tsiames, a former administrator at the Kaw River Care & Rehabilitation Center in Edwardsville, who left about eight months after Skyline took over. “They abuse the system. Encourage you to use local vendors, and then they don’t pay. … It puts an administrator in a bad position.”
Lauren Weiler for CheatSheets wrote about the dark secrets nursing homes do not want the public to know.
1. Some contracts don’t allow you to sue if something goes wrong:
Knapp & Roberts notes you should review all of the print in your paperwork, and keep a watchful eye out for anything noting “binding arbitration agreements.” Essentially, this agreement means you must settle your differences outside of court, removing your right to sue. If anything serious happens, you certainly don’t want to be bound by this clause.
2. Residents don’t always have as much freedom as they want:
One study found out of 65 nursing home residents interviewed, about half felt depressed due to a lack of independence and freedom, as well as loneliness. The interviewees also seemed to prefer homes that had programs designed to reduce their sense of isolation from others.
3. Residents don’t always get enough to eat:
Cleveland’s The Plain Dealer reported that certified nursing assistant jobs have one of the highest reported rates of injury in Ohio and across the nation, according to researchers and government reports. Nursing assistants are injured three times more often than the average worker, data show. The rate of injury among nursing assistants is similar to the rate among construction workers, police and firefighters, according to 2016 data from the U.S. Bureau of Labor Statistics.
For the more than 75,000 residents of Ohio’s 960 nursing homes, nursing assistants provide nearly all of the hands-on care. It is a job that requires dedication, passion and empathy. State and federal officials have issued reports on injuries at nursing homes, dating back to 1999. The studies found that the lifting and moving of residents and the nonstop pace necessary to meet residents’ needs have caused thousands of Ohio nurses and nursing assistants to suffer injuries from overexertion and falls.
The pay in Ohio has trended downward for more than a decade, according to the Paraprofessional Healthcare Institute, a New York watchdog group that advocates for nursing assistants and home health-care workers. In 2006, their average wage was $12.80 an hour. In 2016, it was $11.96. (It is about $10.50 in South Carolina).
“It’s appalling,” said Toby Edelman, the senior policy attorney for the Center for Medicare Advocacy in Washington, D.C. “That’s not a living wage for anyone.”
The low pay and the physical demands of the job result in an unusually high turnover rate. In Ohio, that rate was 54 percent for nursing assistants at nursing homes in 2015, the most recent data available, said John Bowblis of the Scripps Gerontology Center at Miami University in Oxford.
To offer quality care, staffs at nursing homes should provide an average of 4.1 hours of care for a resident each day, researchers said.
“A large proportion of people in nursing homes need two [assistants] to help them move, and many nursing homes just don’t have enough staff to offer that,” said Charlene Harrington, a professor emeritus of nursing at the University of California at San Francisco and an expert on nursing home staffing. “The better the staffing in nursing homes, the better the care and the less likely workers will get injured.”
“This is a gargantuan problem in nursing homes,” said Brian Lee, who leads a Texas-based national advocacy group for nursing home residents called Families for Better Care. “[Nurses and nursing assistants] are overworked, short-staffed and underappreciated. The burnout, the frustration, the injuries. They can all be prevented if employers just hire more people.”
McKnight’s had an article about the new in-depth analysis published by the Henry J. Kaiser Family Foundation. According to the data, occupancy rates at nursing homes fell between 2009 and 2016, however, the needs of nursing home residents have grown considerably — placing more demands on unprepared and under-staffed nursing employees. Average total nursing hours increased to 4.1 per resident day for 2016, up from 3.9 in 2009.
In 2016, nearly half of nursing home residents had a dementia diagnosis, and just under one-third had other psychiatric conditions such as schizophrenia, mood disorders or other diagnoses. In addition, the report found nearly two-thirds of residents received psychoactive medications, including anti-depressants, anti-anxiety drugs, sedatives, hypnotics and antipsychotics.
“Over the past 25 years, numerous research studies have documented a significant relationship between higher nurse staffing levels, particularly RN staffing, and the better outcomes of care,” wrote lead researcher and staffing expert Charlene Harrington, RN, Ph.D., FAAN, professor emeritus at the University of California-San Francisco School of Nursing. “Nursing assistants who provide most of the care to these individuals often have limited training in working with this [behavioral health] population. … Regulations could implement ACA requirements to improve the quality of care for residents with cognitive impairments and further restrict the use of psychotropic agents.”
The report is based on the federal Online Survey, Certification, and Reporting system (OSCAR) and Certification and Survey Provider Enhanced Reports (CASPER) system and also examines staffing levels, payment, and compliance. The most common deficiencies in 2016 were given for failures in infection control, accident environment, food sanitation, quality of care, and pharmacy consultation.
“In 2016, more than one in five facilities received a deficiency for actual harm or jeopardy,” Harrington wrote. “As with other outcomes, there was wide variation across states in these outcomes; however, some states had high rates across all top ten deficiencies.”
Other key findings of the report include:
- Between 2009 and 2013, the average number of deficiencies per facility declined from 9.33 to 7.28, though there was a slight increase between 2013 and 2016.
- The proportion of for-profit facilities increased from 67% in 2009 to 69% in 2016.
- Medicaid is the primary payer source for most certified nursing facility residents, with 62% of residents — about 832,000 people — having Medicaid as their primary payer in 2016. States in the East have higher Medicaid population shares.
The Anderson Independent Mail had an article about Orianna’s bankruptcy due to corporate mismanagement and how that affects pending lawsuits and victims. Lawsuits incuding thos einvolving wrongful death of residents at Orianna’s nursing homes have been halted since the company’s bankruptcy filing last month in Texas. Lawyers handling pending suits against Orianna have hired bankruptcy attorneys in Texas as part of an effort to have their clients heard in the company’s bankruptcy proceedings. Victims of abuse and neglect are classified as unsecured creditors, and may not be able to get any compensation for their injuries and wrongful death.
Orianna, which is the Upstate’s top nursing home operator, currently runs 42 nursing homes with more than 4,000 beds in seven states. It has about 5,000 employees.
The company intends to sell its Upstate nursing homes and several other facilities throughout South Carolina and Georgia under terms of a restructuring agreement with its landlord, Omega Healthcare Investors Inc. Plans call for Orianna’s 23 other nursing homes to be transferred to a new operator.
However, the U.S. government has objected to a plan by the bankrupt operator of the Orianna Health Systems nursing home chain to protect companies that would acquire facilities through its restructuring from successor liability. The nursing home operator, 4 West Holding Inc, has facilities in seven states. It is seeking a court order that would allow the transfer of assets free of any liability, which the government said is not allowed by Medicare provider agreements.
Besides seeking to halt all litigation in pending cases as a result of its bankruptcy filing, the company has stopped making payments related to some previously settled suits.
Kansas is taking over 15 nursing homes with 854 residents across the state because of the owner’s mismanagement and diverting funds away from the facility operations. Now the owners can’t make payroll. All of the care homes are operated under a variant of the name Care and Rehabilitation Center and are owned by a company called Skyline Health Care. Skyline is based in Wood Ridge, N.J. The company was founded in 2016 and took over a number of nursing homes and assisted living facilities that had been previously operated by Golden Living.
The Kansas Department for Aging and Disability Services is moving to contract with another operator to try to ensure the quality of care doesn’t continue to suffer for residents who live in the facilities. Mission Health Care, which operates 14 nursing homes in Kansas and four other states, will operate the facilities until a permanent solution is found.
Recently, Nebraska had to take over 21 Skyline-owned facilities when the company informed that state it couldn’t pay its employees.
SavaSeniorCare, one of the nation’s largest nursing home providers, has been sued in the United States District for the Northern District of California for multiple wage violations.
SavaSeniorCare owns and operates seven residential care and rehabilitation facilities in locations throughout California and more than 200 facilities throughout the United States. The proposed national class action lawsuit is seeking compensation for unpaid overtime and minimum wages, as well as missed meal and rest periods. The plaintiffs, current and former employees of SavaSeniorCare, have brought this action on behalf of all current and former non-exempt employees nationwide.
According to the complaint, the plaintiffs and other similarly situated employees were denied uninterrupted meal periods and rest breaks, overtime compensation, and other wages in violation of the federal Fair Labor Standards Act (FLSA) and California law. Plaintiffs also allege that SavaSeniorCare deducts 30 minutes of pay for meal breaks that employees do not take. In addition, plaintiffs allege that SavaSeniorCare fails to provide proper, itemized wage statements as required under California labor law.
Attorney Bryan J. McCormack of San Francisco-based employment law firm McCormack & Erlich, and Edward J. Wynne of Wynne Law Firm, are representing the plaintiffs.
According to McCormack, “SavaSeniorCare’s conduct of deducting 30 minutes of pay for meal periods that are not taken and failing to pay its employees overtime compensation for all hours worked over 40 per week is not only unjust, but also illegal under California and federal law.” “What is especially concerning is that the company’s practices have affected its employees nationwide for years. Employers need to be held accountable for failing to pay their employees correctly for all the hours they have worked.”
For more information contact:
McCormack & Erlich
150 Post Street
San Francisco, CA 94108
Phone: (415) 296-8420