Nursing home profits remain strong despite widespread abuse

Posted on behalf of Stewart Bell, PLLC on Apr 17, 2012 in Nursing Home Information

Last year, the United States Department of Health and Human Services announced that the Medicare reimbursement rate for nursing homes in West Virginia and elsewhere would be adjusted by 11.1 percent. DHHS officials felt the measure was necessary to "better align Medicare payments with (the) costs" of providing care. Not surprisingly, industry analysts decried the move and claimed it would devastate the market.

The most recent year-end earnings statements of publicly traded nursing homes tell a different story -- one with "strong balance sheets," "better than expected operating results" and a 200 percent jump in annual revenues for one company in particular. At the same time, industry participants are still failing to provide quality care on a consistent basis and continue to be plagued by incidents of elder abuse and neglect.

The majority of these problems can be traced to two issues: not enough staff and/or poor staff training. Why is that? In short, labor costs are one of the first things nursing home executives look to cut when faced with a Medicaid reimbursement rate adjustment, a new regulation or some other type of event that could significantly affect the bottom line for investors or CEO salaries.

When a nursing home's staff-to-resident ratio is too low, almost everyone living or working there is jeopardized. Residents do not get the quality of care they need, which can result in pressure sores, malnutrition, dehydration, injuries from falls and even death. They may also be deliberately overmedicated by staff members as a means of control.

On the other hand, nurses, attendants and others who provide care to residents on a daily basis are similarly jeopardized by the dangerous work environment created when staff-to-resident ratios are too low.

Until legislators or regulators demand more accountability, however, we're not likely to see any improvement in the general level of care provided in these facilities or any reduction in the number of reported cases of nursing home negligence .

Source: Families for Better Care, "Nursing Home Profits Remain 'Astonishingly' Strong Despite Industry Griping," April 5, 2012

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