by Tim Rowan, Editor Emeritus
For as long as I can remember, Home Health and Home Care owners and advocates, including their national and state associations, have struggled to develop concrete data to prove what we all know to be true: In-home care is a great deal for payers, both public and private. Underpaying our sector in a misguided attempt to reduce costs results in paying more in the long run. Buying more in-home care translates into lower overall cost.
This is one part of the story, and we continually search for the proof our sector so desperately needs. But there is another aspect to the Home Health, Home Care advantage that must not be overlooked as we focus on payer finances.
Patient care and safety
One need look no further than our post-acute care neighbor, Skilled Nursing Facilities, to understand how much better off elderly citizens are when in-home caregivers and clinicians enabled them to stay in their own homes and avoid institutionalized care. A new, peer-reviewed study titles “Profits Over Patients” was published in the online collective The Conversation. If unfamiliar, think of it as The Huffington Post for scholars and researchers.
In the exposé, investigators Sean Campbell and Charlene Harrington reveal that for-profit organizations have been infiltrated by Wall Street investors and other venture capitalists, seeking quick turnarounds and handsome profits. Founders and other SNF owners gladly accept generous offers to be acquired or partner with investors who immediately begin to impose cost-cutting measures and maximize profits. The probe, which paired an academic expert with an investigative reporter, discovered a number of startling findings:
“The investigation revealed an industry that places a premium on cost cutting and big profits, with low staffing and poor quality, often to the detriment of patient well-being. Operating under weak and poorly enforced regulations with financially insignificant penalties, the for-profit sector fosters an environment where corners are frequently cut, compromising the quality of care and endangering patient health.”
Campbell and Harrington also looked at the ineffectiveness of state inspectors, who have limited ability to impose meaningful fines for violations. One startling example in the report is that of a Louisville SNF. The care was found to be “abysmal” when Kentucky inspectors filed their survey report.
“Residents wandered the halls in a facility that can house up to 250 people, yelling at each other and stealing blankets. One resident beat a roommate with a stick, causing bruising and skin tears. Another was found in bed with a broken finger and a bloody forehead gash. That person was allowed to roam and enter the beds of other residents. In another ase, there was sexual touching in the dayroom between residents, according to the [surveyor’s] report.
“Meals were served from filthy meal carts on plastic foam trays, and residents struggled to cut their food with dull plastic cutlery. Broken tiles lined showers, and a mysterious black gunk marred the floors.
“Overall, there was a critical lack of training, lack of staff, and lack of supervision.”
The report said state inspectors found 29 deficiencies, including six that put residents in immediate jeopardy of serious harm and three where actual harm was found. The fine imposed was $319,000 — more than 29 times the average for a nursing home. Payments from Medicare and Medicaid were suspended. The investors and owners chalked the fine up to a normal cost of doing business and, five months later, inspectors found six additional deficiencies “of immediate jeopardy,” the highest level.
The parent company of the Kentucky SNF, Infinity Healthcare Management, owns 58 facilities across five states. Since 2021, Infinity has been hit with nearly $10 million in fines, more than 4.5 times the national average.
Cut staff, save money, hide money
The investigation revealed an industry that places a premium on cost cutting and big profits, with low staffing and poor quality, endangering patient health. “Meanwhile,” the authors assert, “owners make the facilities look less profitable by siphoning money from the homes through byzantine networks of interconnected corporation
s. Federal regulators have neglected the problem as each year likely billions of dollars are funneled out of nursing homes through related parties and into owners’ pockets.”
The report points out that problems of this magnitude are found far less often in small, single-location facilities and in national chains and franchises. The sweet sport for abuse seems to be in the mid-range, for-profit organizations that have been taken over by far-away investors. Sadly, 72 percent of the SNF’s in this category are for-profit. “While such chains account for about 39 percent of all facilities, they operate 11 of the 15 most-fined facilities.
Relevance
A frequent message at Home Healthcare conferences in recent years has been the renewed interest in our sector from big money investors. While quick profits and the enticement of early retirement might bring Home Health and Home Care owners to the negotiating table, this exposé may be a reason to take a breath and think it through. Most of you who nurtured your company from startup to attractive acquisition target did so as much out of compassion as entrepreneurship. Would you not wonder, from your perch on the sun deck of a cruise ship, whether your legacy is being dragged in the mud and your patients and employees reduced to a Wall Street cost column?
Tim Rowan is a 30-year home care technology consultant who co-founded and served as Editor and principal writer of this publication for 25 years. He continues to occasionally contribute news and analysis articles under The Rowan Report’s new ownership. He also continues to work part-time as a Home Care recruiting and retention consultant. More information: RowanResources.com or Tim@RowanResources.com
©2024 by The Rowan Report, Peoria, AZ. All rights reserved. This article originally appeared in Healthcare at Home: The Rowan Report. One copy may be printed for personal use: further reproduction by permission only. editor@therowanreport.com
