A recent article in the Gazette (“Care infrastructure under pressure as state’s oldest cohort explodes”) quotes a report from a state task force identifying issues affecting nursing homes: inadequate Medicaid reimbursement and access to capital funding, and a workforce shortage. Yet the real problem is a health system that allows investors to make money off taxpayer dollars while many nursing home residents receive inadequate care.
To understand this, one must understand the business model of nursing homes. Investors form a corporation, purchase a group of nursing homes, sell the real estate to a holding company they own, and charge the nursing homes above market rent. Now the nursing homes are bleeding cash to pay inflated rent. But, that’s not enough return on investment, so the pharmacy, physical therapy and housekeeping services are also provided at above market rates by other related parties, all owned by the same investors. But, that’s still not enough return on investment! So, the corporation provides “management services” to the nursing home to the tune of several million dollars per year. Billions of taxpayer dollars flow through the nursing homes to provide cheap food and inadequate staffing, while the rest goes to investors through related party transactions.
Yes, the nursing homes are broke, but the investors behind the nursing homes are laughing all the way to the bank. This is long term care in America. And you are paying for it with your tax dollars. The industry hides behind the so-called worker shortage. Check attrition rates of CNAs and nurses and ask why they left. Ask if they’d come back, not just for more money, but to fully staffed buildings where they are not burned out every shift. Caregivers leave when understaffing creates dangerous and deplorable working conditions.
Hold the industry accountable for every dollar they receive in public money. The state must inspect the cost reports of all related parties. Until then, increasing payments to nursing homes just continues to put cash into the pockets of investors, while seniors still wait hours for an over-worked, stressed-out CNA to come help.
Dorkas Fern
Amherst