It's no secret that nursing homes outsource a wide variety
of goods and services — often management, facilities maintenance,
staffing and so forth — to companies in which they have a financial
interest or even a controlling stake.
But a new, highly critical analysis finds that nearly
three-quarters of U.S. nursing homes are involved in “related party
transactions,” often funneling money to sister companies while claiming
to be cash-strapped to worried employees and patients.
A Kaiser Health News
review of federal inspection and quality records shows nursing homes
that outsource to related organizations often have fewer nurses and
aides per patient, higher patient injury rates and almost twice the
number of complaints as independent facilities.
Behind the scenes, the related owners can create lucrative
contracts with facilities for their services and record those higher
profits away from nursing home accounts, Kaiser reported.
“Almost every single one of these chains is doing the same
thing,” said Charlene Harrington, a professor emeritus of the School of
Nursing at the University of California-San Francisco. “They're just
pulling money away from staffing.”
In 2015, nursing homes paid related companies 10% of their
spending, according to Medicare disclosures reviewed by Kaiser.
Companies argue that related transactions create efficiencies and cut
tax burdens, and they are perfectly legal.
One chain whose partnerships were examined in court after a
pressure-ulcer related lawsuit revealed its owners turned a 28% profit
over eight years — while nurses at the buildings they owned testified
about chronic supply shortages.
A financial consultant told Kaiser that typical nursing home profits are “in the 3 to 4 percent range.”
Full Article & Source:
Nursing home operators' self-dealings criticized in national report
Organizations like A Place for Mom make their money, as I understand it, by referring clients to the homes that pay them the most. So, for example, if there's choice between a nursing home that pays out the first month's rent of $7,000 and another pays $5000, guess which one will be touted as the best place for mom?
ReplyDeleteI have heard the same about A Place for Mom.
ReplyDeleteSelf dealing runs rampant.