The Politics (and Economics) Of Real-World Elder Care

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I read a stunning article last month, by Laura Katz Olson, author of The Politics of Medicaid. This is a woman who has been studying the field of elder care since the late 1970s. She knows more about the field in an academic sense than almost anyone.

Laura received a painful lesson in what it was like to actually have an honored elder (in this case, her mother) join the legion Medicare/Medicaid-funded seniors that are being neglected all over the United States. Here are some excerpts from her article.

“Problems emerge often, whether you are readily available or not, and they tend to demand immediate attention.”
“The social welfare system is set up to be punitive and stingy — to discourage people from applying and keeping benefits, even when they are poor, aged, and disabled…”

“My elder care journey revealed the unreasonableness of our bureaucratic welfare system and exposed its stinginess and ongoing assaults on human dignity, things that…no older American or his or her family should ever be forced to live with.”

I invite you to take a few minutes and read her article in its entirety; it is raw, honest, and deeply moving. It also brings to light a massive flaw in the American health care system; one that turns the very foundations of Medicare and Medicaid on their ears.

Private Property
According to the CDC, 82% of residential-care (long-term) facilities are privately owned, which also means for-profit. About half of those were part of a chain in which a single company owns 4 or more such facilities. According to Charlene Harrington, a researcher at UC San Francisco, “Poor quality of care is endemic in many nursing homes, but we found that the most serious problems occur in the largest for-profit chains.”

Earlier this year, the Philadelphia Inquirer backed up Harrington’s assertions with independent research into Philadelphia-area nursing homes. Their result? “Nonprofits provided 99 percent of expected registered-nursing hours per resident per day. The median at for-profits was 73 percent.” The drop in quality is more than 25%, and that is a very meaningful margin.

No Recourse
So how do these for-profit nursing homes get away with it? In short, by using corporate legal protections to shield themselves. As the New York Times explains: “Private investment companies have made it very difficult for plaintiffs to succeed in court and for regulators to levy chain-wide fines by creating complex corporate structures that obscure who controls their nursing homes.”
When the lawyers cannot even figure out who to sue without using enough hours of billable legal time to bankrupt their already-poor clients (remember, we are talking mostly about seniors on Medicaid here), there is no recourse except to hope that the government steps in to help, and currently, this is not happening.

No Incentive
Why is the government not stepping in? You probably already know why; because our political climate is such that even suggesting on the floor of the Congress that a law be passed that further regulates the health care industry is political poison.

So are there any non-regulatory attempts that can be made? Absolutely — most of them already have. As Charlene Harrington noted in a paper published in April, “Recently, nursing home pay-for-performance demonstrations…failed to consistently achieve quality improvements and increase staffing levels in nursing homes, possibly because the incentive bonuses were too low.”

Her conclusion is telling: “Compelling evidence supports the need for higher U.S. minimum nurse staffing standards, adjusted for resident acuity, to ensure adequate quality of nursing home care as a necessary precondition for making other quality improvements such as in leadership, management, and training.” [Emphasis mine]
Let me translate that for you; we need to put rules in place that force nursing homes to meet minimum staffing standards before the for-profit entities in charge are allowed to pay themselves from funds provided by Medicare.

But…Profits!
Some argue that if we force nursing homes to actually put adequate staff in place, that will kill the profit margin and cause for-profit nursing homes to collapse entirely. However, according to the Philadelphia Inquirer article referenced above, the nursing homes they studied turned over $500 million in profits the year they were examined…and hiring enough nurses to cover the missing 26% of man-hours would cost about 10% of that.

The nurses are not missing because they are unaffordable. They are missing because the profit motive is strong, and American culture makes caring for our honored elders difficult. Until we begin putting people before profits, this problem is not likely to go away anytime soon.

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About Peter Mangiola

Peter Mangiola is a senior care advocate with several decades of experience in the industry. Peter helps senior citizens by leveraging his vast knowledge of the healthcare industry and his expertise in identifying effective, affordable healthcare solutions. Peter has been a consultant, educator and regular speaker for many groups and organizations over the years covering a wide variety of topics; including Geriatric Care Management, Dementia, Alzheimer’s and Senior Care Health Service & Advocacy

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