By Steve Moran
All over the news, industry, and mainstream media is the story about how the federal government is going to make nursing homes better by requiring more transparency with respect to ownership and related party transactions. There is a general belief in the public and in the government that nursing homes owned by private equity companies and REITs are hurting residents while pocketing vast sums of money.
It is hard to imagine that this initiative will make much difference. The number one case for that is that there are many many one-, two-, and three-star nursing homes that continue to be occupied by residents, something that is a real head-scratcher.
Fog of Confusion
The public and even the senior living industry end up living in a fog of confusion. It is fair to say …
- There are a few dozen, maybe a few hundred, nursing homes that are really, really nice. Like the one I wrote about in 2020. Most but not all, cater to people who have a lot of money and can afford big monthly fees.
- There are many nursing homes that do the best they can given the limited payments the federal and state governments are willing to turn loose of. Most of the operators wish they could do more than they do but are constrained by the lack of will to pay a fair wage.
- There are nursing homes out there, too many of them if we are honest, that are operated by grifters, scam artists, and big capital providers who simply don’t care about quality of care. They only care about how much money they can pocket. The number of nursing homes that fall in this category is relatively small, but way way bigger than it should be. If you doubt that truth, set-up some Google alerts for the term “nursing home.” Several times a week you will get stories from across the nation about truly horrific things being done to some of our oldest and most frail members of society.
The Wrong Approach
The current approach that is focused on more regulation and higher fines continues to be promoted by nursing home reform groups, media, and government leaders, even though it has proven to be grossly ineffective. As fines and regulations increase, operators end up being victims of overzealous regulators who impose massive, enterprise crushing fines. These operators, in order to survive, are forced to engage in expensive litigation against the regulators.
It gets even worse: The regulations become so prescriptive that operators are often prevented from doing the things that would give residents their very best experiences.
And Yet …
And yet we as an industry mostly remain silent about the problems and the bad actors, even when we know bad things are happening. We think, “There but for the grace of God — it could be me.” We stay silent because we don’t want to further taint the industry.
Are We Complicit?
I worry, though, that by staying silent we become complicit in the harm that is being done to older people.
Can We? Will We?
Following the publication of this article, I will get a few emails and maybe some calls from people who will agree with what I have written, and I always appreciate the affirmation. But are we willing to call out bad operators — those whose behavior is egregious and callous? And perhaps even call out the capital providers behind those buildings?