There is a not too surprising, but unfortunate, tension between the worlds of not-for-profit and for-profit senior living providers.
There is a not too surprising, but unfortunate, tension between the worlds of “not-for-profit” and “for-profit” senior living providers. At the core it looks like this:
- The not-for-profit providers tend to have a loftier self-view because they are mission driven, as opposed to being profit driven. While hopefully not intentional, there is a tendency to look down on the for-profit providers.
- The for-profit providers are wary of the not-for-profit providers, first because there is a sense that they (the not-for-profits) have an inherent advantage not needing to show a profit. Secondly, there is some distrust of the not-for-profit world because of an apparent willingness to point fingers at the for-profit providers when there are industry problems. Case in point: the ProPublica Hatchet job.
The first general session at LeadingAge California this past Monday morning was titled ‘“Pundits and Predictions: The View Style”’. This was a roundtable discussion moderated by Joanne Handy, the President & CEO of the organization. Her first topic was the important issue of why not-for-profit providers exist. It was a brave question to ask and it was difficult to listen to the responses because it felt as if panelists struggled to provide an articulate explanation or justification. I do understand the problem, because regardless of the tax status of the ownership entity, the day-to-day realities of running a business that needs to produce a margin is the most important thing.
A Historical View
100 years or so ago individuals or community organizations (often faith-based) looked around their local community and found that there were elders who needed care and nothing was available. They went to work raising money and created “old folks homes”. Some were lovely and others where pretty minimal and, in some cases, downright terrible. Many of today’s not-for-profits have these roots. At that time in history if not-for-profits did not exist the needs would simply not have been met. The fair question today is this: Are not-for-profit senior living providers really providing services or changing the world in ways that for profit enterprises cannot or are not willing to do?
What The Not-For-Profits Do Really Well
There are some things that the not-for-profits do very well:
- Operating financially stable CCRC’s that do a nice job of serving seniors through the final stages of aging and elder hood.
- They provide and operate a significant percentage of low income senior housing (without services) throughout the country.
- Many have initiatives to explore the outer edges of innovation and are aggressive about sharing the results of those explorations.
- Some have, through the years, completely reinvented themselves with respect to the kinds of services they deliver and how they are delivered.
- They have some very creative bright thinkers. In fact, most of the people I like to sit and dream with about the future of senior living come from the not-for-profit side of the senior living.
The Case for Cynicism
When it comes to providing skilled nursing, assisted living and memory care for low income seniors their track record is pretty terrible (If you are the exception to the rule don’t beat me up for saying this, but instead share what you are doing). When it comes to skilled nursing, the record is particularly troubling, with many . . . maybe even most, not-for-profit skilled nursing communities serving mostly Medicare, HMO and private pay residents. This is particularly troubling because the not-for-profit world frequently points to their better outcomes and higher level of resident satisfaction. I have no doubt that the statistics are accurate, but I find myself wondering if the for-profits would have similar outcomes if they had the same payor mix. One of the panelists made note that 95% of all Medicaid skilled nursing care is provided by for-profit companies.
Passionate Optimism
As I watched the panel discussion unfold, I was encouraged because there seems to be a real awareness that, in a number of organizations, the mission of the organization needs to be updated to reflect the current world we live in. Over the last few months I have gotten rather good at offering unsolicited dreams for organizations like Brookdale Senior Living and so here is my dream for the not-for-profit organizations: I have this dream that those organizations serving the more well healed senior populations will use their excess cash flows in these three ways:
- To do radical innovation in the areas of programming, building design and technology.
- To take those excess cash flows and use them to seek out and serve those senior populations that are most insecure. Today that is probably not the ultrapoor but rather those with modest means who could never on their own afford the highest quality, the best of the best senior living.
- Mentor and inspire a new generation of leaders who are committed to innovation and solving the really big emerging elder care problems that will challenge us over the next 30 years.
Steve Moran
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Years ago during the last few years of her life, my mother was cared for in a non-profit nursing home run by the Carmelite Sisters for the Aged and Infirm. When the mothers of friends of mine reached the same stage, my friends brought them there also, where most were cared for, eventually, under Medicaid. Many of the residents were retired nuns and priests, but many of them were from various religious and life backgrounds, like my mother — and the staff tried to accommodate a service for everyone, an activity for every moment of the day, and volunteers were everywhere. The executive director (one of the sisters) watched over the staff and care like a hawk. The nuns helped the staff as much as they were physically able — and were at least another set of sociable eyes watching over residents who could not accurately describe what their day or care was like. My mother’s room was unadorned and simple, but she spent very little time there. She particularly loved the music and dance my sister and I (as volunteers) brought in to share with all of the memory care residents. At the end of her life, the nuns brought down the ‘end of life’ cart — filled with snacks and beverages for the visiting family. At her funeral, many of the staff and nuns were there — we have good memories of our time at St. Patrick’s Manor, which changed us — for the better.
The for-profit and relatively expensive details of care my mother-in-law receives today in another part of the country are similar — except that everything is different. Beautifully decorated with high-end furnishings and art, the staff seems worn out, staffing is inadequate for the numbers of residents who are wheelchair-bound, getting residents to breakfast is an exhausting race. The care quality is haphazard and variable — weekends are particularly startling experiences — my 91-year-old mother-in-law may or may not have her teeth in, her glasses on, her own socks on her feet, her shoes on. She could be slumped seeing little in the midst of an activity like Bingo. Memory care is the most profitable part of assisted living. One reason — staff levels seem inadequate for the acuity of the residents — and many of the families hire their own private duty aides in addition to paying the higher memory care rates.
Having these particular experiences can shape the question — what do the for-profits do with the profit besides return profits to the shareholders or expand?
I work for the Good Samaritan Society and we are the largest and oldest provider of senior care in the US and I believe that all of our skilled facilities (240 plus) take Medicaid without restriction. We also have many subsidized independent communities and Fairlawn Village where I work in Gresham Oregon takes county section 8 housing vouchers and we provide charitable allowances for long time residents who have needs but do not yet qualify for Medicaid. I guess that there are just more of the large CCRC that are very upscale with expensive buy-ins that skew the statistics. Of course a not for profit has to be a well managed business and do make a profit but it all goes back into maintaining and improving the physical aspects as well as the staffing and quality. Having worked for both for profit and not for profit my preference is not for profit but that does not mean that the for profit sector cannot provide quality care and we all must be looking to inovate for the future.
That is good to know about Good Samaritan and Medicaid. Honestly it is hard to know what the 5% number means because we would need to know the percentage of total skilled nursing beds operated by not for profits. That being said I see many not-for-profit CCRC’s who’s skilled nursing communities don’t take any Medicaid residents.
Steve
You have made some good points. I do however see some great for-profit senior communities who serve their residents exceptionally well. And most of the indigent skilled care is provided by for profit companies.
I also know the Catholic sisters run some of the most amazing and compassionate skilled nursing communities anywhere in the world.
Steve
Is there anyway to validate the source of:
“One of the panelists made note that 95% of all Medicaid skilled nursing care is provided by for-profit companies”?
I have always wondered.
I am sure there is, but I am not in a position to do the digging. I most recently heard it from a LeadingAge panelist a few weeks ago. I would also note we always need to be careful with statistics. Most skilled nursing in this country is provided by for profit providers regardless of payor source, but regardless no one disputes that the not-for-profit world has a disproportionately high number of private pay residents.