The new GAO study found that for-profit nursing homes tend to have more deficiencies than non-profit nursing homes. Private investment (PI) firms’ acquisition of several large nursing home chains led to concerns that the quality of care may have been adversely affected. These concerns may have been in part due to PI firms’ business strategies and their lack of financial transparency compared to publicly traded companies.

In September 2010, GAO reported on the extent of PI ownership of nursing homes and firms’ involvement in the operations of homes they acquired. In this report, GAO examined how nursing homes that were acquired by PI firms changed from before acquisition or differed from other homes in: (1) deficiencies cited on state surveys, (2) nurse staffing levels, and (3) financial performance. GAO identified nursing homes that had been acquired by PI firms from 2004 through 2007 and then used data from CMS’s Online Survey, Certification, and Reporting system and Medicare Skilled Nursing Facility Cost Reports to compare these PI homes to other forprofit and nonprofit homes. 

 For PI-acquired homes, GAO also compared homes for which the operations and real estate were owned by the same firm to those that were not. Because research has shown that other variables influence deficiencies, staffing, and financial performance, GAO statistically controlled–that is adjusted–for several factors, including the percent of residents for whom the payer is Medicare, facility size, occupancy rate, market competition, and state. Any differences GAO found cannot necessarily be attributed to PI ownership or acquisition.

On average, PI and other for-profit homes had more total deficiencies than nonprofit homes both before (2003) and after (2009) acquisition. PI-acquired homes were also more likely to have been cited for a serious deficiency than nonprofit homes before, but not after, acquisition. Serious deficiencies involve actual harm or immediate jeopardy to residents. From 2003 to 2009, total deficiencies increased and the likelihood of a serious deficiency decreased in PI homes; these changes did not differ significantly from those in other homes.

The financial performance of PI homes showed both cost increases from 2003 to 2008 and higher margins in those years when compared to other for-profit or nonprofit homes. Facility costs as well as capital-related costs for PI homes increased more, on average, from 2003 to 2008 than for other ownership types.  In 2008, PI homes reported higher facility costs than other for-profit homes (but lower costs than nonprofit homes) and higher capital-related costs than other ownership types. 

ABC27 reported the arrest of Amy Marsh, an employee of a ManorCare nursing home in Pennsylvania after being charged with stealing nearly $13,000 from residents.  State police said 36-year-old Amy Marsh worked for ManorCare when she stole $12,996 from approximately 27 victims. In some cases, they said she forged their names on receipts in order to illegally obtain money from their accounts.

"She made it look like the individual resident needed something," said PA State Police Corporal Tom Pinkerton. "So basically she would use their transaction document in order to facilitate getting that money and then she would just pocket the cash."

Police said an internal audit also revealed Marsh stole approximately $525 from the facility’s petty cash.

"One of the things that you have to realize is that most of these people are elderly. Some are not quite as old. But everybody’s there pretty much under a set budget for the most part," Pinkerton said. "So anytime you hear of an employee taking advantage of people in that situation, it’s very disheartening."



A West Virginia jury has awarded $91.5 million to the family of Dorothy Douglas who died as a result of nursing home neglect at a HCR ManorCare nursing home called  Heartland of Charleston.  Douglas died as a result of malnutrition and dehydration that was preventable. Just a couple of weeks after admission, she suffered kidney failure due to dehydration and malnutrition, caused by neglect and understaffing. 

Nursing home dehydration and malnutrition occur when facilities fail to provide sufficient food and fluid or monitor the intake of residents. Failure of staff to keep adequate records, assess a residents dietary needs or understand that nutritional needs of residents can lead to severe and life-threatening nursing home injuries.

Following trial, the jury deliberated just two hours before finding the facility and its corporate owners guilty of negligence, and awarded Douglas $11.5 million in compensatory damages and $80 million in punitive damages.

There are more than 500 HCR ManorCare Inc. (Manor Care) nursing homes owned by parent company The Carlyle Group in 32 states throughout the country. nursing home subsidiary,

Mike Fuller, a partner in McHugh Fuller, whose lawyers tried the case, said they won a $1.5 million verdict for compensatory damages in a similar HCR lawsuit last year targeting the same Charleston facility. The case settled for a confidential amount before the jury decided how much to award, if anything, in punitive damages.

 See articles at Bloomberg News and

A writer for the Star-Tribune reports every week a list of deficiencies for nursing homes in Minnesota. One nursing home worker threw a glass of water in a resident’s face. Another nursing home worker was seen spitting at one resident and pinching another. And at a St. Louis Park facility, a female resident was kissed and molested, according to government records.

The Centers for Medicare and Medicaid Services (CMS) evaluates nursing homes and conducts health and fire-safety inspections. When evaluating a home’s performance, it considers nurse staffing levels and quality-of-life issues, among other factors.

For this week’s list, he included the 10 Twin Cities homes cited for the most violations in the six-month period ending in May 2011, which was the most recent information available.

He also listed all complaints substantiated by the Minnesota Office of Health Facility Complaints during recent inspection periods.

1 Crystal Care Center, Crystal, 26 violations.

2 Highland Chateau Health Care Center, St. Paul, 19 violations.

3 Robbinsdale Rehab and Care Center, Robbinsdale, 16 violations.

Six substantiated complaints: A worker threw a glass of water in a resident’s face and swore at her. A resident sustained burns from smoking while on supplemental oxygen. The health care of a resident with behavior issues was neglected. Medications weren’t given at appropriate times, care plans weren’t followed and workers were slow to respond to call lights. Social work services were inadequate and care conferences were not timely. Drug disposal was done improperly.

4 Cerenity Senior Care Center on Humboldt, St. Paul, 16 violations.

Two substantiated complaints: In six separate incidents a worker was seen pushing a resident, spitting at another, pinching a third, yelling at a fourth, slapping one with a washcloth and force-feeding another. Also, a resident sustained a fractured femur when a worker attempted to transfer the resident without obtaining help from a co-worker.

5 Park Health and Rehabilitation Center, St. Louis Park, 16 violations.

6 Southside Care Center, Minneapolis, 15 violations.

7 Westwood Health Care Center, St. Louis Park, 15 violations.

Two substantiated complaints: A male worker kissed and molested a female resident. A resident was found lying under her wheelchair on a concrete landing in a stairwell.

8 Cerenity Senior Care Center on Dellwood Place, St. Paul, 14 violations.

One substantiated complaint. Cats were allowed to freely roam the facility and failed to use litter boxes. Clean-up procedures were inadequate.

9 Augustana Health Care Center of Apple Valley, 13 violations.

One substantiated complaint: A worker slapped a resident’s hand and told a witness: "I shouldn’t have let you see me do that."

10 Richfield Health Center, Richfield, 13 violations.

One substantiated complaint: A resident with a history of wandering left the facility and was later found near Interstate 494 and Nicollet Avenue.

Special Focus Facilities

The CMS maintains a list of facilities that have a "history of persistent poor quality of care." Each is subject to more frequent inspections and must improve in order to be taken off the list.

Four Minnesota facilities were on the list as of last week:

Eveleth Health Services Park, Eveleth, 8 violations. Months on list: 1

One substantiated complaint.

Jourdain Perpich Extended Care Center, Red Lake, 10 violations. Months on list: 2

Valley View Manor, Lamberton, 13 violations. Months on list: 8

Two substantiated complaints.

Willmar Commons Nursing & Rehabilitation, Willmar, 25 violations. Months on list: 8

Six substantiated complaints.


Exercise has been called the "Fountain of Youth" for its countless health-preserving benefits, including safeguarding against mental declines. But what about an elder parent who already has dementia?   Daily exercise improved mental ability by 30 percent over a one-year period in older people with dementia, according to a study in the International Journal of Sports Medicine.

The experts at, the web’s leading resource for caregivers, want seniors who want to exercise to think like a tortoise — start slow, go slow.  It’s the "go" that’s the operative word. Find the right pace and don’t push. A variety of potential exercises exist for most people, from those with early dementia and no other ailments who can do aerobic-level activity, to the wheelchair bound who may prefer simple range-of-motion movements. Even simple and modest activities and exercises for seniors have been shown to have benefits for a senior’s health and well-being.
While a gym might be overwhelming to a senior, there are other options including:

Walks around the yard (stick together if you head beyond a fenced area)
Water exercise (check local Y’s or senior centers; ask if you can take classes together)
Common household chores: hanging laundry, dusting, etc.
Stationary bike
Simple stretches and strength training (try using canned goods as a light weight)
Tai chi (find a DVD and try it at home; helps balance too)
Exercise classes offered by hospitals or other facilities with rehabilitation centers

Exercise doesn’t only help seniors’ physical condition; it can also improve their state of mind. Exercise is a mood lifter and has been shown to reduce the incidence of anxiety, aggression and depression in people with dementia. Even if an elderly person is not on bedrest, a relatively sedentary lifestyle can cause these same effects but at a slower pace. A simple, and doctor approved, exercise routine, can be of tremendous benefit to seniors.


The website The Pop Tort had a great article on tort reform in Texas.  Parkland Memorial Hospital, the Dallas hospital to which they rushed President John F. Kennedy to try to save is life, has now become such a "serious threat" to patient safety that government is considering throwing it out of the Medicare program.

"Maybe this will finally jolt people into understanding what happens when a state severely reduces a hospital’s accountability for negligence."

As the Associated Press reported,

"It is rare for the government to take such action," [Centers for Medicare & Medicaid Services ] spokesman Bob Moos said Wednesday. "Two Parkland violations relating to infection control and emergency care issues are so serious that they triggered `immediate jeopardy’ status. That is the most severe finding we can have in a hospital, and it requires immediate attention."

In addition to the state’s severe “cap” on compensation and other restrictions on patients’ legal rights, enacted after voters were convinced to change the state constitution in 2003, cases involving medical malpractice in emergency rooms have been knocked out almost completely, making Texas ER’s some of the most dangerous in the country. “’What Texans don’t know is that their Legislature has mandated a very low standard of care — almost no care,’ says Brant Mittler, a Duke University-educated cardiologist in San Antonio who added malpractice law to his resume in 2001.’”

I mean, you can’t blame the government for taking this step given the cost of the increasing amount of medical negligence in Texas. Medicare spending there “has risen 16% faster than the national average since Texas restricted the legal rights of patients. Four of the nation’s 15 most expensive health markets as measured by Medicare spending per enrollee are in Texas.”

Unfortunately for Texas, these stories won’t stop.

UPDATE: And you wonder how this happens? Check out the story from the Texas Tribune today: "The 15 largest donors to Texas politicians and PACs gave a total of $4.7 million in the first six months of 2011, according to a Texas Tribune analysis of Texas Ethics Commission filings. The biggest beneficiary of their largesse: the Texans for Lawsuit Reform Political Action Committee."


Could it get worse?   There are several articles quoting critics, experts and industry shils all promising an answer.  See Smart Money, Senior Homes, Senior Housing News, Kaiser Health News, and Money.

On July 29, the Centers for Medicare and Medicaid Services (CMS) announced that, starting in October, it will begin cutting their reimbursement rates to nursing homes by 11.1% to make up for $4 billion overpayment last year. And while that doesn’t raise residents’ costs, there may be pressure on nursing homes to make up the shortfall somewhere, says Toby Edelman, a senior policy attorney with the Center for Medicare Advocacy. The news has hurt shares of nursing home companies, as investors worry that record profits will shrink.

In 2010, nursing home residents paid an average of $219 per day for a private room, up nearly 5% from a year previous, according to the MetLife Mature Market Institute.   The cuts are likely to result in a lower quality of care if homes cut back on staff or services to make up the shortfall.

 Medicare payments are responsible for more than 20% of nursing homes’ revenues, according to an analysis by the Medicare Payment Advisory Commission.

Some home operators said they would need to cut expenses which means cutting staffing which is already too low.  Shares of SunHealthcare have fallen 49% this month, and Skilled Healthcare is down 39%. "We will focus in the near term to mitigate the impact of the rate cuts by reducing expenses," Boyd Hendrickson, CEO of Skilled Healthcare, recently told the Wall Street Journal.

"The cuts are in part a response to recent government reports (read the PDF) that Medicare has been overpaying nursing homes the past few years; the adjustment is designed to make the reimbursement rates more accurate, not stingier. "We do not believe that nursing homes will respond to the payment changes by decreasing the quality of care furnished to patients," a spokesperson for CMS wrote in an email. "However, we intend to carefully monitor changes in utilization and staffing patterns to ensure that patients continue to receive high quality care.""


USA Today had two related articles recently about the high cost of hospice and how for profit chains have manipulated the Medicare reimbursement rules to generate incredible revenue.  Medicare costs for hospice care have increased more than in any other health care sector as for-profit companies continue to gain a larger share of the end-of-life medical market.  From 2005 through 2009, Medicare spending on hospice care rose 70% to $4.31 billion.

A recent report by the inspector general for Health and Human Services, which oversees Medicare, found for-profit hospices were paid 29% more per beneficiary than non-profit hospices. Medicare pays for 84% of all hospice patients. At the same time, some of the nation’s largest for-profit hospice companies are paying multimillion-dollar settlements for fraud claims and facing multiple investigations from state and federal law enforcement agencies while lobbying Congress to pass tort reform and increase reimbursements.

Critics say costs have also increased because for-profit organizations have cherry-picked patients who live the longest and require the least amount of care — such as those with dementia or Alzheimer’s, rather than those with cancer. From 1998 to 2008, Alzheimer’s and dementia hospice cases grew from 28,000 to 174,000, reports the Medicare Payment Advisory Committee (MedPAC), an independent commission that advises Congress. The inspector general’s report said 90% of those patients lived in nursing facilities when they entered hospice care.

Medicare paid hospices that operated out of nursing facilities in excess of $3,000 more per beneficiary on average than it paid other hospices.   MedPAC found that amont the hospices that exceeded the spending cap, 44% of patients transferred back to traditional care from hospices exceeded the six-month spending cap. That suggests "above-cap hospices may be admitting patients before they meet the hospice eligibility criteria," it said in its 2011 report to Congress.

Meanwhile, the nation’s two largest for-profit hospice companies, Vitas and Gentiva, have together spent $1,188,100 on lobbying this year, records show.  In the first half of 2011, Vitas paid $390,000 to Washington lobbyists, according to lobbying reports. The company receives 90% of its revenue from Medicare and Medicaid, according to its filings with the Securities and Exchange Commission.  Gentiva spent $798,100 in the same time period on lobbying.

Both companies face a series of fraud investigations by state and federal law enforcement agencies, and have paid multiple fines.

Meanwhile, the trade groups representing hospice companies have formed the Hospice Action Network.

A 2005 study in the Journal of Palliative Medicine found that large, publicly traded for-profits had profit margins nine times higher than large non-profits. In 2010, Gentiva collected $326.2million from Medicare for hospice care, compared with $68.8 million in 2009, according to SEC filings. That’s in large part because it has been buying smaller hospices.

Vitas has also been growing: In 2008, its revenues were $808.4 million, and in 2010, $925.8million. It projects an annual increase in admissions of between 5% and 7%.


The Department of Health and Human Services has stated that the average monthly premium for Medicare Part D prescription drug coverage will decline in 2012 which is further validation that the Part D consumer choice model continues to work even better than anticipated, the president of the Healthcare Leadership Council said.  The Part D drug benefit, created under the George W. Bush administration, allows seniors and others on Medicare to sign up for a privately administered, government-subsidized health plan to get their prescriptions.

HHS announced that the cost of the average Medicare prescription drug plan in 2012 will be about $30, approximately one dollar lower than 2011 averages.   HHS also announced that nearly 900,000 Medicare beneficiaries whose prescription drug purchases place them in the so-called “donut hole” have benefited from the new 50 percent discount on covered name brand drugs.

“These new figures underscore two important points. First, the marketplace created by the Medicare Part D structure continues to be vibrant and highly competitive. To succeed, Part D plans have to keep premiums affordable and provide value, and seniors are benefiting,” said HLC president Mary R. Grealy.   Ms. Grealy pointed out that Medicare premiums are now 44 percent lower than original government projections when the program was created.

“Medicare Part D is a prime example of conventional wisdom not always being correct,” she said. “The experts said the program would be unaffordable for seniors. They said plans wouldn’t want to participate in the program. Then when we had strong plan participation, the experts said seniors would be confused by too many choices. At every juncture, the conventional wisdom was wrong, as exemplified by surveys showing beneficiary satisfaction with the program at consistently high levels.”




The L.A. Times and Whittier Daily News had articles on the $75,000 fine and citation issued to Orchard-Post Acute Care after the death of a 78-year-old patient whose feeding tube was inserted incorrectly.  The man was recovering from a stroke when he was admitted to the Orchard-Post Acute Care.

After the man’s feeding tube was inserted incorrectly, he complained of abdominal pain and was taken to an emergency room, according to the report.  Emergency room doctors discovered that the lining of the man’s abdomen was inflamed and that he was having trouble breathing and was in septic shock, according to the report. He died six days later, the report says.

162-bed center has been cited by the state 63 times in the last five years.   The facility failed to follow policies and procedures related to patient assessment, monitoring and care.

According to a report issued by the CDPH, nursing home personnel incorrectly inserted a "gastronomy tube," a feeding tube that’s meant to be inserted into the stomach through a surgically created opening.  "The (gastronomy tube) was inserted into (the patient’s) peritoneal cavity located outside of the stomach, instead of into the stomach," according to the report.  As a result, the investigation found, the patient developed inflammation, septic shock and respiratory failure, and died six days after the allegedly botched procedure.

The citation given by the CDPH, a "AA" citation, is the strongest citation the agency can issue.

All nursing facilities in the state are regulated by state and federal laws governing health care facilities.