The Nonprofit Quarterly had an article explaining  that nonprofits produce better outcomes for less money than for-profits do. Prime among these fields are hospice and long-term care. The research is relatively consistent: Do mission-driven nonprofit organizations deliver higher quality care to elders? When it comes to nursing homes, it appears the answer is a decisive “yes.

Multiple studies over the last two decades indicate that for-profit ownership of nursing homes, particularly for-profit chain ownership, correlates with substandard care.

Since the 1990s, corporate chain ownership has grown steadily and now dominates the market. Today, nonprofits own less than one in four nursing homes, while for-profits control nearly 70 percent. (The remaining five to six percent are government facilities.)

The latest analysis of nursing home ownership comes from Kaiser Health News (KHN), which examined organizations with complex corporate structures that can be used to pad the pockets of owners while protecting them from lawsuits.

Increasingly, KHN explains, owners of nursing homes outsource services to multiple entities in which they also have an ownership interest. For example, buildings are owned by real estate trusts, while the nursing home is leased by a management company. Physical therapy services, pharmacy services, dining, and maintenance can all be outsourced to sister companies.

Nearly three in four nursing homes outsource much of their business to related companies, according to KHN. This includes some nonprofit organizations as well. These structures, when not used to make and hide profits, can be cost efficient, with related companies charging the nursing home less than average for their services. But this is not normally the case.

In an examination of federal inspection, staffing and financial records nationwide, KHN found that nursing homes structured with related entities showed significant shortcomings. Homes with complex corporate structures:

  • employed, on average, 8 percent fewer nurses and aides;
  • averaged 53 validated complaints per 1000 beds, as compared to 32 per 1000 beds in independent homes; and
  • were subject to 22 percent more fines for quality deficiencies, and paid penalties averaging seven percent more than independent homes.

Charlene Harrington, professor emeritus of the School of Nursing at the University of California-San Francisco, who has extensively studied for-profit nursing homes, told KHN, “Almost every single one of these chains is doing the same thing. They’re just pulling money away from staffing.” In numerous studies, staffing has been shown to be a critical variable in quality care delivery.

Complex corporate structures not only undermine care for nursing home residents; they also provide a legal screen for owners, making it difficult for consumers to hold owners accountable.

To bring related companies into a lawsuit, attorneys must persuade judges that all the companies were essentially acting as one entity and that the nursing home could not make its own decisions. Often that requires getting access to internal company documents and emails. Even harder is holding owners personally responsible for the actions of a corporation—known as “piercing the corporate veil.”

Perhaps more importantly, it is time to rethink public policies that favor corporate ownership of nursing homes, as Charlene Harrington argues: “The considerable evidence from observational studies that care delivered in for-profit facilities is inferior to public or nonprofit services supports the need to develop new policies that would favor the development and maintenance of public and nonprofit homes.

CNN had an article with a video showing a resident assaulting another resident for several minutes before staff intervened.  The video is tough to watch.  The beating, which was first reported by the Gainesville Sun, lasted on and off for nearly 2 minutes. The beating occurred October 3 in a secure unit of Good Samaritan, a 45-bed assisted living facility.  It occurred in a common area of a secured unit within the facility while other residents ate and watched television mere feet away. The video of a resident beating another resident raises new questions about the safety of the elderly in places meant to protect and care for them.

In the video, a 52-year-old resident is seen punching an 86-year-old resident with dementia more than 50 times as the older man lay curled up on the floor. The younger resident accused the older resident of eating his cupcake, according to law enforcement.  At the time the beating took place, there was no staff member attending to residents in the unit, and no one had been assigned to monitor the unit’s video surveillance, according to official reports.
The video was taken by the facility’s closed circuit surveillance system in October and later turned over to the police, who shared it with CNN.
The facility — the Good Samaritan Retirement Home in Williston — had a history of violations, and more sanctions in the past five years than any other assisted living facility in Florida. In December, two administrators were arrested in connection with separate incidents on charges of neglect of the elderly.  One of the facility’s administrators, Nenita Alfonso Sudeall, later broke down and cried as she told police she was “overwhelmed” at the facility, which she said was short-staffed and had poorly trained employees, according to a police report.
The elderly resident was hospitalized with bruising and swelling to his face, as well as hip pain, according to the police report.
Also earlier this year, a CNN report found that the federal government has cited more than 1,000 nursing homes for mishandling or failing to prevent alleged cases of rape, sexual assault and sexual abuse at their facilities between 2013 and 2016.
“There are far too many cases of abuse and neglect happening in nursing homes and assisted living facilities,” said Brian Lee, executive director of Families for Better Care, a national advocacy organization for residents and their families. “We’ve been seeing cases for decades. This one incident in Florida shows how bad the problem can be.”

St. Louis Today had an editorial about the recent NY Times report on the outsourcing of management and “back office”support services to companies owned and operated by the owners of the nursing home. These business dealings, known as related-party transactions.  In the nursing home industry, however, with its reliance on taxpayer dollars, related-party transactions can also encourage insider dealing, maximizing profits for the outside vendors while siphoning off funds needed for patient care and staffing.

“So the question of who’s profiting from meeting — or not meeting — their needs is a matter of great public import. People’s lives can and do hang in the balance.”

In a remarkable story published Dec. 31, Kaiser Health Newsreported that the owners of nearly three-quarters of the 15,600 nursing homes in the United States buy a wide variety of goods and services from companies in which they have a financial interest or control. Nursing home owners can rent the land to themselves at above-market rates, or own the staffing company that provides nursing care and management.

 Relative to homes that don’t have related-party transactions, Kaiser reported, nursing homes that do deal with related parties have an average of 8 percent fewer aides and nurses on staff and are 9 percent more likely to have injured a resident or put him at risk. They have 35 percent more complaints and are fined 22 percent more frequently by government regulators.

For nursing home owners, a complex web of related-party transactions can offer a shield against lawsuits or governments seeking restitution for Medicaid overpayments.

This is outrageous. America’s vulnerable elderly shouldn’t be a profit center. Government should protect people and tax dollars, not profits.

The New York Times had a great article explaining how and why for profit chains game the system by siphoning funds to owners instead of to patient care.  Contracts with “related companies” accounted for $11 billion of nursing home spending in 2015 — a tenth of their costs — according to financial disclosures the homes submitted to Medicare.  A Kaiser Health News analysis of inspection and quality records reveals that nursing homes that outsource to related organizations tend to have significant shortcomings: They have fewer nurses and aides per patient, they have higher rates of patient injuries and unsafe practices, and they are the subject of complaints almost twice as often as independent homes.  For-profit nursing homes utilize related corporations more frequently than nonprofits do, and have fared worse than independent for-profit homes in fines, complaints and staffing, the analysis found. 

“In what has become an increasingly common business arrangement, owners of nursing homes outsource a wide variety of goods and services to companies in which they have a financial interest or that they control. Nearly three-quarters of nursing homes in the United States — more than 11,000 — have such business dealings, known as related party transactions, according to an analysis of nursing home financial records by Kaiser Health News. Some homes even contract out basic functions like management or rent their own building from a sister corporation, saying it is an efficient way of running their businesses and can help minimize taxes.”

“These arrangements offer an additional advantage: Owners can arrange highly favorable contracts in which their nursing homes pay more than they might in a competitive market. Owners then siphon off higher profits, which are not recorded on the nursing home’s accounts.”

“Such corporate webs bring owners a legal benefit, too: When a nursing home is sued, injured residents and their families have a much harder time collecting money from the related companies — the ones with the full coffers. Courts set a high bar for plaintiffs to bring these ancillary companies into their cases.”

“Almost every single one of these chains is doing the same thing,” said Charlene Harrington, a professor emeritus of the School of Nursing at the University of California, San Francisco. “They’re just pulling money away from staffing.”

Kaiser Health News’s analysis of inspection, staffing and financial records nationwide found shortcomings at other homes with similar corporate structures:

■ Homes that did business with sister companies employed, on average, 8 percent fewer nurses and aides.

■ As a group, these homes were 9 percent more likely to have hurt residents or put them in immediate jeopardy of harm, and amassed 53 substantiated complaints for every 1,000 beds, compared with 32 per 1,000 beds at independent homes.

■ Homes with related companies were fined 22 percent more often for serious health violations than independent homes, and penalties averaged $24,441 — 7 percent higher.

The Record Online reported that New York Department of Health is investigating staffing levels and living conditions for seniors at Sapphire Nursing and Rehab at Goshen, amid calls by local politicians to do so.   Last month, the home formerly known as Elant at Goshen laid off more than half its nurses, according to layoff letters and staff memos obtained by the Times Herald-Record.  Since the recent completion of its sale by nonprofit Elant to for-profit Goshen Operations, the home was rebranded Sapphire.

Sapphire’s nurse tally has fallen 54 percent since June to 17 nurses, including two registered nurses and 15 licensed practical nurses, according to 1199 SEIU United Healthcare Workers East.  Six months ago, there were 37 nurses — 12 RNs and 25 LPNs, the union said.

This month, the 120-bed home began using one LPN per every 40 residents from 7 a.m. to 11 p.m. compared with one LPN per 20 residents previously, the union said. Seven of the home’s leaders, including Sapphire Executive Administrator Crystal Cummings, and key staff members have either resigned or been laid off since mid-December, the union added.

“The reports we’re getting from family members of folks at Sapphire and the local health care community are incredibly disturbing, and we must get to the bottom of it,” Maloney said in a statement. “Denying these older Americans the dignity and comprehensive care they deserve is infuriating, and Assemblyman Skoufis and I will stay on this until we’re sure they’re getting the level of respect and care they deserve.”

“Patients, family members and their nurses deserve far better than what we’ve seen out of Sapphire,” Skoufis wrote. “From the reports I’ve received, the level of care has been ravaged due to the for-profit owners’ excessive cuts. The Department of Health needs to intervene, and quickly.”


The Anderson Independent Mail had two articles on national for-profit nursing home chain Orianna.  See articles here and here.  Orianna Health Systems is a Tennessee-based company that runs 13 Upstate nursing homes, more than any other provider.

One article discussed the quality of care issues at Orianna’s facilities in Greenville where residents complained that staff members were slow to respond to call lights; some reported waiting 50 minutes for requested pain medication without receiving it, according to the inspection report. A resident interviewed that afternoon said “call lights often yield no response and sometimes the resident must yell or shout for assistance.”

Another resident complained that staff members “seem upset that you rang your bell and they tell you to wheel yourself around,” according to the report, which also listed nine grievances that had been filed between March and August about slow responses to call lights.  Citing the failure to respond to call lights in a timely manner, the inspection report found that the nursing home had not provided care “that keeps or builds each resident’s dignity and respect of individuality.”

Linville Court at Cascades Verdae was one of three Upstate nursing homes where inspectors found a number deficiencies that exceeded state and national averages between April 5 and Aug. 25, according to the most recent records from the Centers for Medicare & Medicaid Services.

A total of 12 deficiencies were found at Greenville Rehabilitation and Healthcare Center, according to a July 19 inspection report. Eight deficiencies were found at The Arboretum at the Woodlands nursing home in Greenville, according to a May 4 inspection report.

One of the deficiencies at Greenville Rehabilitation and Healthcare Center involved a January incident in which a certified nursing assistant verbally abused a resident. The nursing assistant later resigned, according to the inspection report.

Another deficiency listed in the inspection report involved the nursing home’s failure to adequately address a 22-pound weight loss by a resident during a six-week period. The nursing home was also cited for a medication error rate of 11.1 percent, which is more than twice the acceptable rate.

The inspection report cited numerous environmental problems at the nursing home, including the presence of flies in the kitchen and other areas. The report said a resident was seen swatting files with a wash cloth in an activity/dining room.

Other deficiencies included a failure to provide proper treatment to prevent bed sores or heal existing bed sores and a failure to store, cook and serve food in a safe and clean way, according to the inspection report.

A state inspector also visited The Arboretum at the Woodlands in June in response to a complaint. According to the inspection report, a staff member was found asleep in the nursing home’s living room during an 11 p.m. to 7 a.m. shift on May 25.

Mikki Meer, chief operating officer for Orianna Health Systems, said in an email that her company “is proud of the continued improvement demonstrated in the recent survey results of its South Carolina facilities.”

Meanwhile the second article explains why the quality of care at Orianna’s nursing homes has gone down.  Orianna has serious financial problems as a result of mismanagement and the siphoning of funds to the corporate owner’s pockets.  Orianna has now fallen behind on lease payments for its facilities to Omega Health Investors, a Maryland-based healthcare real estate investment trust.

Taylor Pickett, Omega’s CEO, reported that since 2014, the occupancy rate at Orianna’s facilities has declined from 92 percent to 89 percent and expenses have grown by 6 percent while revenues increased only 2 percent.

As recently as July, Orianna was operating 48 skilled nursing facilities with 5,000 total beds in 11 states, according to the company’s website. The latest version of the website says the company is now managing 43 skilled nursing facilities with a total of 4,500 beds in seven states.

  • Nine of Orianna’s homes agreed to pay $4.46 million to settle lawsuits involving the deaths of 20 residents. That total includes three settlements adding up to $752,500 that were approved after last year’s name changes.
  • Inspectors found at least 525 deficiencies at the company’s Upstate nursing homes, according to the Centers for Medicare & Medicaid Services. The deficiencies included instances of neglect, possible cases of abuse that were not investigated and medication errors, as well as failures to eliminate hazards, properly prepare meals and treat residents with dignity. The most dangerous deficiencies resulted in 26 fines totaling nearly $495,000.
  • The company’s nursing homes were responsible for 47 percent of the inspection-related deficiencies and 49 percent of fines at Upstate nursing homes. Orianna’s facilities account for 38 percent of the overall nursing home beds in the region.

The Kokomo Tribune reported that two former owner/operators of nursing homes agreed to plead guilty in a kickback scheme involving millions of dollars.  American Senior Communities CEO James Burkhart and Chief Operating Officer Daniel Benson have reached plea agreements that could put them in prison for decades.

Burkhart and Benson were indicted in 2016 along with Burkhart’s friend, Steven Ganote, and Burkhart’s brother, Joshua Burkhart. Ganote and Joshua Burkhart also have reached plea deals.

Federal prosecutors who indicted the men on a total of 32 counts say they took part in a kickback scheme between January 2009 and September 2015 that netted them $16 million. Prosecutors said the men used shell companies to falsify and inflate costs of goods and services, which enabled them to steal discounts and rebates, and conceal kickbacks during the six-year period.

Prosecutors said the men used the money to buy lavish items, such as vacation homes, jewelry and gold bars.

The company manages nearly 100 senior care facilities, including 60 locations under a contract with Marion County’s public health agency. The county is home to Indianapolis.

More than three months after Oak Terrace Healthcare Center  nursing home closed with little warning, many families and former patients  are waiting for refunds and wondering why they were put through such stress.  Oak Terrace’s two most recent administrators blame Home Life Companies, the Delaware, Ohio-based business whose top officials made all the key decisions involving Oak Terrace, for what they say was the company’s greed, ignorance and lack of vision.

The residents — they didn’t have any interest in them except as a source of revenue,” former Oak Terrace administrator Tom Mullins told The State Journal-Register.′  Mullins said he isn’t satisfied with Oak Terrace’s finger-pointing and claims of poverty.  Home Life Companies, which says on its website that it manages long-term care communities in several states, mostly in the Midwest and South, could transfer money from its headquarters to pay him and vendors, Mullins said.

One lesson from the Oak Terrace situation may be that families should investigate a long-term care facility’s finances as much as possible, and ask questions when they see evidence of problems such as empty halls, said Megan Jizmagian, the Springfield-based regional long-term care ombudsman.

David Mabry, who was administrator from January until late August, when Mullins took over, said he realized Oak Terrace wasn’t properly billing Medicaid when he arrived in January. After many frustrating communications with Home Life over spending, he said he resigned after he was instructed to begin transferring Medicaid patients to other nursing homes and reduce staffing levels. “There were so many things that needed to be fixed in the building, it was incredible,” said Mabry, who is certified as a nursing home administrator and licensed practical nurse.


MSN reported the patient dumping by University of Maryland Medical Center.  The hospital’s security guards had just wheeled a patient to a bus stop, and in the freezing temperatures they left her there. The only thing she had on was a hospital gown. It’s called “patient dumping” and it doesn’t just happen in Baltimore. In 2007, “60 Minutes” investigated the practice of removing homeless patients from Los Angeles hospitals and leaving them downtown.

Imamu Baraka was walking past a Baltimore hospital when he noticed something he says he’ll never forget.

“It’s about 30 degrees out here right now,” Baraka says in a recording of the encounter. “Are you OK, ma’am? Do you need me to call the police?” he asks.  “Come on and sit down,” Baraka repeatedly says to the patient in the recording. “I’m going to call and get you some help.”

In a statement, the University of Maryland Medical Center said that they “share the shock and disappointment of many who have viewed the video. In the end we clearly failed to fulfill our mission with this patient.”

The man who recorded the video called 911, and says medics ended up taking the patient back to the same hospital. Now a review is underway that could lead to personnel action against the hospital employees involved.

The federal government is launching an effort to stop nursing homes from discharging residents illegally.

Discharges and evictions lead the list of complaints that state long-term care ombudsmen receive each year. In 2015, these advocates for nursing home residents received more than 9,000 such complaints.

In a memo to state officials, the Centers for Medicare and Medicaid Services (CMS), which oversees nursing homes, said it has begun an examination of this widespread problem and will explore ways to combat it.

States have the primary responsibility for policing the nation’s nursing homes, but state regulators have to at a minimum follow federal rules that list specific reasons a facility can legally evict a resident. A nursing home can force a resident to leave only if at least one of the following conditions is met:

  • The resident’s clinical or behavioral status endangers the safety of others at the facility. The reason most often reported for patients’ being discharged against their will is “behavioral, mental and/or emotional expressions” of distress, CMS says.
  • The resident’s care is not being paid for. This is another common reason for such forced discharges. This can happen when individuals who had been paying privately run out of resources and enroll in Medicaid, which reimburses nursing homes less than they receive from private-pay patients. It also happens when Medicare residents shift to being covered under Medicaid.
  • Transfer or discharge is necessary for the resident’s welfare and the facility cannot meet his or her needs. The CMS memo notes that a nursing home should determine whether it can adequately care for an individual before that person is admitted. Once someone becomes a resident, the memo says, “it should be rare” for that facility to later say it cannot meet that individual’s needs.
  • The resident no longer needs the services the nursing home provides.
  • The resident’s continued presence endangers the health of others at the nursing home.
  • The nursing home is closing.

Discharges that violate federal regulations “can be unsafe and/or traumatic for residents and their families,” the memo says, adding that nursing home residents are sometimes left homeless or hospitalized for months when they are evicted.


Reuters reported that nursing home landlord Quality Care Properties Inc has agreed to cut rents for HCR ManorCare.  However, ManorCare, a national for-profit nursing home chain, already owes more than $300 million in back rent and acknowledged it will struggle to pay even the reduced amount, according to a regulatory filing.  Toledo, Ohio-based ManorCare, with more than 250 skilled nursing and assisted living facilities across the United States, is struggling as government Medicaid and Medicare reimbursement rates fail to keep pace with rising costs.  Quality Care, a real estate investment trust (REIT), relies on the nursing home chain for more than 90 percent of its revenues.

Quality Care was spun off in 2016 by larger REIT HCP Inc, which had acquired the ManorCare assets from private equity firm Carlyle Group LP in 2010 for $6.1 billion.  Quality Care shares fell 3.4 percent to $13.54 on Tuesday.