Long-term care Medicaid Medicare What's Buzzing

Can you protect nursing home residents in a profit-driven system?

Written by Diane Archer

A story in The Guardian about corporate entities that buy up nursing homes, with the goal of squeezing as much profit out of them as possible and no regard for their residents, speaks volumes about the horrific nature of our profit-driven health care system. Because nursing homes can operate as for-profit facilities–even when Medicare and Medicaid are paying their bills–many of them have become storage units for frail and vulnerable Americans rather than care centers.

Storage units? That might be too kind a description. Many nursing facilities have become places that do not provide staff to care properly for their frail and vulnerable residents. Instead, our taxpayer dollars flow to their owners, through Medicare and Medicaid, who buy and sell them like used cars, after pocketing as much money from them as possible. These nursing homes then engage a skeletal staff at a low wage to care for the residents. Here’s one example:

Multi-millionaire Joseph Schwartz owns Skyline Healthcare LLC, which receives millions of Medicare and Medicaid dollars to provide care to patients in its 100-plus nursing facilities. But, Schwartz abandons these facilities without bothering to let the staff or residents’ families know he’s sold off his properties.

Schwartz leaves staff unpaid, without benefits or recourse, and residents sitting in their feces, unfed, without electricity or care. He left one pharmacy without paying it the $200,000 it was owed for prescription drugs. And, since the novel coronavirus pandemic, police went to one Skyline facility and found 17 people dead and lying atop one another in a four-person morgue.

According to the Guardian, over the last 20 years or so, it has become extremely common for corporate entities to buy nursing facilities, realize as much profit as possible, and then sell them. Massive fraud is also common. Patient neglect is often the norm. And, eviction of residents is not uncommon. Sometimes, state governments come to the rescue, but not always.

For-profit nursing homes need to be better regulated. But, what would that mean? How would regulation protect against owners who have no interest in anything other than taking the Medicare and Medicaid revenue and running.

One man who owned many nursing homes in a number of states received a 20-year prison sentence for pocketing Medicare and Medicaid dollars to care for residents and never spending a dollar on their care. But, he was not stopped until after he had amassed $1.3 billion. It took authorities several years to stop him after his fraud was exposed by reporters at the Chicago Tribune. How many others like him are still pretending to operate nursing homes and simply pocketing the federal and state dollars intended to go to residents’ care?

Private equity firms are also buying up nursing homes, draining them of their value, and abandoning them. The Carlyle Group bought HCR ManorCare, a chain of nursing facilities. It sold off their real estate for $6.1 billion and then filed for Chapter 11 bankruptcy when the monthly rent cost too much.

In case this isn’t all bad enough, many states are providing nursing homes immunity from COVID-19 litigation. And, Senate Majority Leaders Mitch McConnell has said that any new stimulus bill must include provisions that would make it extremely hard for residents and staff to sue nursing home owners. Advocates have organized to urge state legislators to permit residents to sue these facilities and hold them to account for not providing appropriate care. Otherwise, nursing homes will continue with these bone-chilling practices.

Here’s more from Just Care:


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