By Jack Cumming
Because of the length of this article, we’ll start with a summary. As seen most recently in a Washington Post article, senior living has been receiving bad press. Although it began before the pandemic, the drumbeat of criticism escalated exponentially as nursing home deaths mounted. The industry response has largely been to cry, “Unfair!” Still, the drumbeat is growing more frenzied.
In this article, I propose that the industry trade associations take the lead in advocating proactive practices and uniform nationwide regulatory codes to demonstrate a positive commitment toward reassuring the public. “The best defense is a strong offense,” as the adage goes. If you believe that the industry should go positive, read on.
In California at least, in senior living communities, fire alarms sound regularly, recurrently, and sometimes what seems endlessly, but they have lost effect. They are just a disturbance. It’s not that fire isn’t a persistent danger. Many buildings are what architects call “stick built,” meaning that they are built of wood two-by-fours. That can be like oxygenated kindling. The problem is that regulatory compliance has rendered the alarms meaningless for those they are intended to protect.
The senior living industry and its trade associations would be well served to shift to a proactive approach to oversight, reversing today’s defensive, reactive approach. Instead of defensively objecting to adverse publicity, the industry would do well to seize the high ground, lift its standards, embrace sensible cohesive principled regulations, and take action to let the world know how trustworthy it is and why.
Senior living might have acted proactively to avoid the kind of negative perceptions that have become pronounced since the pandemic. The industry could long ago have come together to draft a comprehensive regulatory framework. That is what the life insurance industry has done. Insurance, like senior living, is regulated at the state level. Still, for insurance, there is little variance in consumer protections from state to state.
Senior living might have used its influence and expertise to repeal the patchwork of state laws and regulations with a sensible uniform alternative. If the industry had, thus, called itself to account, instead of becoming defensive, many of the tragic anecdotes and stories of financial shenanigans that now resonate with the public might have been avoided.
We can start with the quirky world of senior housing fire alarms, using California as an example. Of course, other jurisdictions may have other regulatory approaches — some better, some worse. California is often strangely original. For instance, senior living communities are called “residential care facilities for the elderly.” Moreover, independent living, which in its purest form is no different from multifamily living with meals and activities on-site, has to qualify as assisted living — i.e., a residential care facility for the elderly — in California.
The instructions for when alarms sound are to “shelter-in-place,” which translates to “do nothing; just stay where you are.” Think about this. What does this complex alarm system accomplish? A resident may be awakened out of a deep sleep by a jolting, hearing-damaging, squealing alarm.
The instruction is to do nothing. The resident wants to go back to sleep. But the alarm is mandated to continue sounding until the municipal fire captain arrives on scene. Does that make sense?
The alarm alert is of no meaning to the resident since there is nothing the resident is supposed to do other than to “shelter in place,” meaning stay put, stay home, and do nothing. Why interrupt a sound sleep for such a meaningless “warning?”
But wait, there’s more. Those alarm systems are tested regularly without notice at odd hours of the day and night. Almost every time the alarm sounds, it’s a false alarm. An alarm system that is a false alarm most of the time is worse than no alarm at all. It’s the little boy who cried wolf all over again. For the residents, who are to be protected by the system, alarms become a recurring irritant that accomplishes nothing.
As San Francisco’s KTVU channel reported in 2020, “As the Tubbs Fire tore through Santa Rosa’s hilltop neighborhood of Fountaingrove in October 2017, staff at Varenna, an independent living facility, and Villa Capri, an assisted living facility for people needing extra care, left close to 100 residents to fend for themselves, state investigators found. Family members and first responders who discovered the residents had been left behind evacuated them to safety.”
That 2020 news report was published after the Sonoma County district attorney settled a lawsuit against the operators for $500,000 for abandoning the residents. The operators promised to do better. Residents still live in those communities under the same management as at the time of the fire in 2017. As the flames came closer and closer, firefighters reported finding the residents in their rooms where they had been told to “shelter-in-place.” Villa Capri was destroyed in the fire, while Varenna survived with damage.
Fire may seem an obvious area calling for regulation, but the need for credible regulation goes well beyond such obvious concerns. If all that was involved was just meaningless, nuisance regulation, we might conclude that it’s human failure, and that we have to accept that no regulatory structure will be perfect. After all, politics is likely to intrude. There are always some who look askance at any regulation no matter how well-considered it may be.
Yet, there are many aspects of senior living that are beyond the ability of most consumers (and many industry executives) to evaluate for themselves. Much of what is needed to ensure that deferred long-term commitments can be trusted is complex, leading to rationalization and a lack of comprehension. That unacknowledged ignorance can be ruinous.
Sadly, this complexity combined with a lack of self-awareness cries out for attention. Ideally, the industry would have its own standards, which, combined with peer review and peer pressure, might avoid the need for coercive, often misguided, regulation. That’s the ideal. Unfortunately, the reality can be disturbing. There’s a need for state-to-state uniformity, like that of insurance regulation, to replace the regulatory hodgepodge that today confounds senior living.
The residents of Air Force Village West stood by hopefully, fearfully, reassured by the provider, as a once strong haven of tranquility and safety descended into bankruptcy. Some say the outcome was positive. Others say that only the refundable portion of entrance fees was protected while the rest was squandered.
The regulators could only stand by and encourage some resolution as the insolvency deepened and time elapsed. The claim was that the regulators lacked the statutory authority to act as receivers (as would not have been the case if the failing enterprise had been an insurance company.)
Insurance companies are well-regulated at the state level. Unlike senior living residents, insurance policyholders are shielded from loss. The evidence was that the state regulators also lacked a full understanding of entrance fee finances. Such failures are not uncommon, though each is unique.
Overregulation and Underregulation
While health and safety matters are often overregulated, finances and contracts are not. Contracts often include such anti-consumer provisions as mandatory arbitration, class action prohibitions, and more. There are no standards with the effectiveness as those, say, for insurance contracts, which are likewise regulated at the state level. Moreover, staffing regulatory agencies with the needed competencies and insights seems to be an aging services regulatory challenge, much as staffing is a challenge for the industry.
Many operating executives may not realize how off-base their contracts or financial practices may be. Executives tend to rely on outside attorneys, accountants, and bankers, who may favor enterprise aggrandizement (their clients’ imagined interests) over consumers’ expectations of good faith and fair dealing. It’s not uncommon for an outside advisor to be more protective of an enterprise than the enterprise would be itself or than what is wisest for the undertaking.
Regulation and Trust
Effective, relevant, competent, enforced regulation builds trust. Achieving that requires a proactive approach. The insurance industry is exemplary. Since 1871, for over 150 years, the insurance industry has worked closely with regulators to protect the public through the National Association of Insurance Commissioners. We’ve seen with skilled nursing facilities the perils of federal oversight. Senior living would be wise to strengthen and refine state oversight. If we can’t get the obvious things like fire alarms right, how are we ever going to be right about the larger, more complex, and more subtle matters of money integrity and fair contracts?
No industry, moreover, requires a higher level of trust than does senior housing. Ideally, people move in while they are still fit, in anticipation of having a trustworthy and safe haven later when they can no longer fend for themselves. That requires a predictable level of trust over a long period of time. Working proactively to ensure that regulations are not counterproductive and that bad actors can be curbed can help the industry gain the trust needed to offset past negative press and popular buzz.
Positive change would require a subtler, more affirming approach by the industry’s lobbying trade associations. For a deeper dive into these issues, click here. Click here for an example of the kind of senior living news now inundating our nation’s capital.