Nursing homes and assisted living facilities have become increasingly focused on their bottom line in recent years to the detriment of their elderly patients. A recent piece by the New York Times describes the trend where nursing homes have transitioned from non-profits to corporate behemoths – focused on outsourcing and consolidating to minimize costs, reduce their tax liability, and reduce their liability in lawsuits.
According to the nursing homes, consolidation provides a cost-effective way to deliver care to their elderly residents. Through a complex web of corporate ownership, nursing home businesses can reduce their tax liability. According to these nursing homes, those savings are passed on to the residents.
There are also legal benefits to the owners of these nursing home chains – often coming at the expense of the elderly residents. Whenever a person is injured in a nursing home, a complex web of corporate ownership may help the nursing home avoid liability for the harm it has caused. By siphoning the profits of a nursing home into unrelated corporations, injured victims of elder abuse may not be able to hold their nursing home responsible for their damages.
At the same time that nursing homes are attempting to reduce their legal liability, the takeover of the nursing home industry by large corporations has, according to certain studies, led to a reduced quality of care. In a study by Kaiser Health News, nursing homes that are related to large organizations have fewer nurses per patient, higher rates of patient injuries, and almost double the rate of complaints each year. According to the report, nursing homes related to corporate entities had 8 percent fewer nurses.
The nursing homes were 9 percent more likely to have hurt residents or put them in immediate jeopardy of harm – the most serious violation for a nursing home that receives Medicare funding. Even the less serious complaints by nursing home residents to Medicaid about for-profit nursing homes are more serious violations – with an average fine of $24,441, over 7 percent higher compared to non-profit nursing homes. If the nursing home is both for-profit and involves a complex web of corporate structures, the average fine is even higher at a $25,345, a full 10 percent higher than non-profit nursing homes.
As an example of the harm that can be caused by for-profit nursing home chains, the New York Times describes the case of Martha Pierce, an 82-year-old mother. Pierce was a patient at a severely underfunded nursing home – operating with a $2 million deficit, according to the Times – when she had to have her leg amputated by a treatable infection that had been ignored by the nursing home. According to Pierce, sometimes there were not even diapers available for the residents. At the same time of the negligent actions that caused her harm, a full 2.8 million dollars, more than the deficit, was siphoned to other corporate entities owned by the same two men in Long Island. After a full six years, her case is still being litigated in the court system.