In 1959, the Department of Housing and Urban Development (HUD) created a program that provides loans to start up new nursing homes and assisted living facilities across the US. This program was meant to keep care for the elderly viable and affordable in rural or lower-income communities which would otherwise be unable to sustain such a facility. Since the program began, however, it’s become an easy way for some business owners to get loans backed on for-profit nursing homes that are practically doomed at the start.
Back in late 2013, Zvi Feiner and a group of investors bought the Rosewood Care Centers, a chain of 13 nursing homes and assisted living facilities in Illinois. The Department of Housing and Urban Development insured the loans for the centers’ creation, so they were automatically implicated when the Rosewood Care Centers went on a downward spiral. Feiner started losing money on the facilities soon after he bought them, with a team of investors, and began diverting Rosewood’s government-backed funds to other businesses. The HUD program eventually had to come to Rosewood’s rescue when their operation ran out of money and the agency had to take it over.
This HUD program is increasingly known for its lack of oversight and its loss of money on these nursing homes and assisted living facilities. Yes, owners like Feiner are at fault for moving those funds and allowing negligence in those facilities, but HUD backed those for-profit facilities and paid little attention to their nefarious activities before it was too late. Not only is the program poorly run and bad for the government financially, it’s also bad for the residents. Some studies are finding these facilities which take government backing, especially the for-profit ones, are more likely to receive bad quality ratings and ultimately endanger their residents.
The families of many Rosewood patients have filed lawsuits due to the facilities’ negligence. Other facilities backed by the HUD program face similar widespread issues. If the program continues the way it is, it might only further the danger surrounding the businesses it backs.