Hidden Owners, Hidden Profits, and Poor Nursing Home Care: A Case Study

Loss Of Public Health Emergency Funds Challenges The Financial Viability Of Nursing Homes, Especially Not-For-Profit Facilities

Before the COVID-19 pandemic, for-profit nursing homes' revenue generally covered their costs, whereas not-for-profit nursing homes often needed donations and other nonpatient revenue to cover expenses. The unprecedented challenges presented by the pandemic caused the industry to report operating losses that were larger among not-for-profits and facilities relying on agency staff. COVID-19 public health emergency funding allowed nursing homes to remain profitable through 2021. By 2022, as these public health emergency funds were cut back, for-profit nursing homes had overall net incomes of $1.68 per resident day, whereas not-for-profit nursing homes lost $31.18 per resident day. Without public health emergency funds, for-profit and not-for-profit nursing homes would have had losses of $7.47 and $42.35 per resident day, respectively, in 2022. These results indicate that as public health emergency funds are entirely withdrawn, the long-term financial viability of nursing homes, especially not-for-profits, will be seriously challenged.

United States' Nursing Home Finances: Spending, Profitability, and Capital Structure

Little is known about nursing home (NH) financial status in the United States even though most NH care is publicly funded. To address this gap, this descriptive study used 2019 Medicare cost reports to examine NH revenues, expenditures, net income, related-party expenses, expense categories, and capital structure. After a cleaning process for all free-standing NHs, a study population of 11,752 NHs was examined. NHs had total net revenues of US$126 billion and a profit of US$730 million (0.58%) in 2019. When US$6.4 billion in disallowed costs and US$3.9 billion in non-cash depreciation expenses were excluded, the profit margin was 8.84 percent. About 77 percent of NHs reported US$11 billion in payments to related-party organizations (9.54% of net revenues). Overall spending for direct care was 66 percent of net revenues, including 27 percent on nursing, in contrast to 34 percent spent on administration, capital, other, and profits. Finally, NHs had long-term debts that outweighed their total available financing. The study shows the value of analyzing cost reports. It indicates the need to ensure greater accuracy and completeness of cost reports, financial transparency, and accountability for government funding, with implications for policy changes to improve rate setting and spending limits.

Determinants of regulatory compliance in health and social care services: A systematic review using the Consolidated Framework for Implementation Research

BACKGROUND

The delivery of high quality care is a fundamental goal for health systems worldwide. One policy tool to ensure quality is the regulation of services by an independent public authority. This systematic review seeks to identify determinants of compliance with such regulation in health and social care services.

METHODS

Searches were carried out on five electronic databases and grey literature sources. Quantitative, qualitative and mixed methods studies were eligible for inclusion. Titles and abstracts were screened by two reviewers independently. Determinants were identified from the included studies, extracted and allocated to constructs in the Consolidated Framework for Implementation Research (CFIR). The quality of included studies was appraised by two reviewers independently. The results were synthesised in a narrative review using the constructs of the CFIR as grouping themes.

RESULTS

The search yielded 7,500 articles for screening, of which 157 were included. Most studies were quantitative designs in nursing home settings and were conducted in the United States. Determinants were largely structural in nature and allocated most frequently to the inner and outer setting domains of the CFIR. The following structural characteristics and compliance were found to be positively associated: smaller facilities (measured by bed capacity); higher nurse-staffing levels; and lower staff turnover. A facility's geographic location and compliance was also associated. It was difficult to make findings in respect of process determinants as qualitative studies were sparse, limiting investigation of the processes underlying regulatory compliance.

CONCLUSION

The literature in this field has focused to date on structural attributes of compliant providers, perhaps because these are easier to measure, and has neglected more complex processes around the implementation of regulatory standards. A number of gaps, particularly in terms of qualitative work, are evident in the literature and further research in this area is needed to provide a clearer picture.

The Need for an Economically Feasible Nursing Home Staffing Regulation: Evaluating an Acuity-Based Nursing Staff Benchmark

Background and Objectives

Despite concerns about the adequacy of nursing home (NH) staffing, the federal agency responsible for NH certification and regulation has never adopted an explicit quantitative nursing staff standard. A prior study has proposed a benchmark for this purpose based on the 1995/97 Staff Time Measurement (STM) studies. This article aims to assess the extent to which NHs staff to this proposed STM benchmark, the extent to which regulators already implicitly apply the STM benchmark, and compute the additional operating expenses NHs would incur to adhere to the STM benchmark.

Research Design and Methods

Using NH Compare Archive data, the STM benchmark was compared to staffing levels reported by the facility and whether NHs received a nursing staff deficiency. Using financial information from Medicare Cost Reports, the additional annual operating expenses required to staff to the STM benchmark were calculated for each state and nationwide.

Results

The vast majority of NHs did not staff to the STM benchmark; 80.2% for registered nurses and 60.0% for total nursing staff. Deficiency patterns showed that NH regulators were not using the STM benchmark to determine sufficiency of nursing staff. Implementing the STM benchmark as a regulatory standard would increase operating expenses for 59.1% of NHs, at an average annual cost of half-million dollars per facility. The nationwide increase in operating expense is estimated to be at least $4.9 billion per year.

Discussion and Implications

Without clear guidance on the staffing level needed to be sufficiently staffed, most NHs are subject to a community standard of care, which some have argued could be associated with suboptimal staffing levels. Implementing an acuity-based benchmark could result in improved staffing levels but also comes with significant economic costs. The STM benchmark is not economically feasible at current Medicare and Medicaid reimbursement levels.

Financial and Quality Metrics of A Large, Publicly Traded U.S. Nursing Home Chain in the Age of Covid-19

Nursing homes faced serious challenges with large COVID-19 resident infection rates and deaths during the pandemic. This descriptive case study examined the structure, operations, strategies, care outcomes, and owners of The Ensign Group Inc. the second largest U.S. for-profit chain, between 2007 and 2021. Ensign, as a holding company, has a complex organizational structure that uses more than 430 corporate entities to manage its 228 nursing homes and senior living facilities. With mostly Medicare and Medicaid revenues and favorable government COVID-19 relief, Ensign grew rapidly, even during the pandemic, to $2.5 billion (all amounts in U.S. Dollars) in revenues with a market capitalization of $4.5 billion and strong profits and financial metrics in 2020 to 2021. The company used real estate purchasing, debt financing, and spin-off companies, and tax arbitrage to optimize shareholder value. Before and during the pandemic, its 198 nursing homes had low registered nurse and total nurse staffing levels and regulatory violations with below-average ratings, and they had high COVID-19 infection rates during the pandemic. Ensign's small board, executives, and institutional investors protected and enhanced shareholder interests rather than ensuring that its nursing homes met professional standards and regulatory requirements.

Care Deficiencies and Super-Organization of American Nursing Homes in Hospital Referral Region

Super-organization has been associated with worse care quality in nursing homes. Previous research on the chain ownership of American nursing homes excluded government facilities in public-private partnerships, and focused on corporate entities. This longitudinal study proposes a novel method of demarcating the latent ownership networks of for-profit, government and non-profit nursing homes in the United States through use of open data and social network analysis. Facility characteristics and care quality measures were analyzed from an ecological cohort of 9,001 American nursing homes that had a registered organization for owner, and were reimbursed through Medicare or Medicaid. Information was obtained from the Nursing Home Compare open datasets at five semi-annual processing dates from March 2016 to March 2018. Ownership networks of American nursing homes were constructed using the exact legal name of registered organizations. As hospital discharge is a routine admission source of nursing home residents, hospital referral region was actualized to demarcate focal area. Utilizing Bayesian hierarchical models, the association between nursing home super-organization in hospital referral region (inferred by degree-based centrality and Herfindahl-Hirschman Index) to scope of cited care deficiencies (denoted by Total Weighted Health Survey Score) was explored. The percentage of nursing homes having super-organization increased from 56.8 to 56.9% over the 2-year period. During this interval, the mean size of nursing home ownership group in hospital referral region increased from 3.11 to 3.23 facilities. Overall, super-organization in hospital referral region was not associated with care deficiencies in American nursing homes. However, being part of an ownership group with more facilities was beneficial for care quality among nursing homes with super-organization.

U.S. Nursing Home Violations of International and Domestic Human Rights Standards

We present a review of the international covenants and conventions and U.S. domestic laws and regulations that are designed to protect nursing home residents in the United States. Based on a review of research studies, government reports, and news reports, we found extensive evidence of widespread and systematic abuse and neglect of nursing home residents in the United States that needs urgent government action to protect the basic human rights of residents.

Persistent geographic variations in availability and quality of nursing home care in the United States: 1996 to 2016

BACKGROUND

Availability of nursing home care has declined and national efforts have been initiated to improve the quality of nursing home care in the U.S. Yet, data are limited on whether there are geographic variations in declines of availability and quality of nursing home care, and whether variations persist over time. We sought to assess geographic variation in availability and quality of nursing home care.

METHODS

Retrospective study using Medicaid/Medicare-certified nursing home data from the Centers for Medicare & Medicaid Services, 1996-2016. Outcomes were 1) availability of all nursing home care (1996-2016), measured by the number of Medicaid/Medicare-certified beds for a given county per 100,000 population aged ≥65 years, regardless of nursing home star rating; 2) availability of 5-star nursing home care, measured by the number of Medicaid/Medicare-certified beds provided by 5-star nursing homes; and 3) utilization of nursing home beds, defined as the rate of occupied Medicaid/Medicare-certified beds among the total Medicaid/Medicare-certified beds.

RESULTS

From 1999 to 2016, availability of all nursing home care declined from 4882 (standard deviation: 931) to 3480 (912) beds, per 100,000 population aged ≥65 years. Persistent geographic variation in availability of nursing home care was observed; the correlation coefficient of county-specific availabilities from 1996 to 2016 was 0.78 (95% CI 0.77-0.79). From 2011 to 2016, availability of 5-star nursing home beds increased from 658 (303) to 895 (661) per 100,000 population aged ≥65 years. The correlation coefficient for county-specific availabilities from 2011 to 2016 was 0.54 (95% CI 0.51-0.56). Availability and quality of nursing home care were not highly correlated. In 2016, the correlation coefficient for county-specific availabilities between all nursing home and 5-star nursing home beds was 0.33 (95% CI 0.30-0.36). From 1996 to 2016, the utilization of certified beds declined from 78.5 to 72.2%. This decline was consistent across all census divisions, but most pronounced in the Mountain division and less in the South-Atlantic division.

CONCLUSION

We observed persistent geographic variations in availability and quality of nursing home care. Availability of all nursing home care declined but availability of 5-star nursing home care increased. Availability and quality of nursing home care were not highly correlated.

The Effect of Residential Aged Care Size, Ownership Model, and Multichain Affiliation on Resident Comfort and Symptom Management at the End of Life

CONTEXT

In most resource-rich countries, a large and growing proportion of older adults with complex needs will die while in a residential aged care (RAC) facility.

OBJECTIVES

This study describes the impact of facility size (small/large), ownership model (profit/nonprofit) and provider (independent/chain) on resident comfort, and symptom management as reported by RAC staff.

METHODS

This retrospective "after-death" study collected decedent resident data from a subsample of 51 hospital-level RAC facilities in New Zealand. Symptom Management at the End-of-Life in Dementia and Comfort Assessment in Dying at End of life with Dementia (SM-EOLD and CAD-EOLD, respectively) scales were used by RAC staff who were closely associated with 217 deceased residents. Data collection occurred from January 2016 to February 2017.

RESULTS

Results indicated that residents of large, nonprofit facilities experienced greater comfort at the end of life (CAD-EOLD) as indicated by a higher mean score of 37.21 (SD = 4.85, 95% CI = 34.4, 40.0) than residents of small for-profit facilities who recorded a lower mean score of 31.56 (SD = 6.20, 95% CI = 29.6, 33.4). There was also evidence of better symptom management for residents of chain facilities, with a higher mean score for symptom management (SM-EOLD total score) recorded for residents of chain facilities (mean = 28.07, SD = 7.64, 95% CI = 26.47, 29.66) than the mean score for independent facilities (mean = 23.93, SD = 8.72, 95% CI = 21.65, 26.20).

CONCLUSION

Findings suggest that there are differences in the quality of end-of-life care given in RAC based on size, ownership model, and chain affiliation.

Shaping the use of psychotropic medicines in nursing homes: A qualitative study on organisational culture

Psychotropic medicines have limited efficacy in the management of behavioural and psychological disturbances, yet they are commonly used in nursing homes. Organisational culture is an important consideration influencing use of psychotropic medicines. Schein's theory elucidates that organisational culture is underpinned by basic assumptions, which are the taken for granted beliefs driving organisational members' behaviour and practices. By exploring the basic assumptions of culture we are able to find explanations for why psychotropic medicines are prescribed contrary to standards. A qualitative study guided by Schein's theory was conducted using semi-structured interviews with 40 staff representing a broad range of roles from eight nursing homes. Findings from the study suggest two basic assumptions influenced the use of psychotropic medicines: locus of control and necessity for efficiency or comprehensiveness. Locus of control pertained to whether staff believed they could control decisions when facing negative work experiences. Necessity for efficiency or comprehensiveness concerned how much time and effort was spent on a given task. Participants' arrived at decisions to use psychotropic medicines that were inconsistent with ideal standards when they believed they were helpless to do the right thing by the resident and it was necessary to restrict time on a given task. Basic assumptions tended to provide the rationale for staff to use psychotropic medicines when it was not compatible with standards. Organisational culture is an important factor that should be addressed to optimise psychotropic medicine use.

O ESTUDO DE CASO COMO MÉTODO DE PESQUISA EM ENFERMAGEM: UMA REVISÃO INTEGRATIVA

RESUMO Objetivo: analisar a aplicação do estudo de caso como método de pesquisa pela enfermagem nas publicações científicas nacionais e internacionais. Método: revisão integrativa de literatura realizada nas bases bibliográficas eletrônicas PubMed, CINAHL, LILACS e SciELO, utilizando os descritores estudo de caso, pesquisa e enfermagem. Foram incluídos artigos originais disponíveis na íntegra no formato on-line, nos idiomas português, inglês ou espanhol, no recorte temporal de 2010 a 2015. Resultados: foram encontrados 624 estudos, dos quais 50 atenderam ao objetivo. Os autores Yin e Stake foram os pesquisadores cujos referenciais metodológicos de estudo de caso se destacaram no contexto da pesquisa na área da enfermagem. A aplicação do método abrangeu os diferentes campos de atuação da profissão: educação, assistência/cuidado e gestão/administração. Conclusão: o estudo de caso como método de pesquisa mostrou-se uma importante metodologia que pode ser amplamente utilizada pela enfermagem nos seus diversos campos de atuação ao buscar compreender fenômenos relacionados a indivíduos, grupos ou organizações.

Marketization in Long-Term Care: A Cross-Country Comparison of Large For-Profit Nursing Home Chains

This article presents cross-country comparisons of trends in for-profit nursing home chains in Canada, Norway, Sweden, United Kingdom, and the United States. Using public and private industry reports, the study describes ownership, corporate strategies, costs, and quality of the 5 largest for-profit chains in each country. The findings show that large for-profit nursing home chains are increasingly owned by private equity investors, have had many ownership changes over time, and have complex organizational structures. Large for-profit nursing home chains increasingly dominate the market and their strategies include the separation of property from operations, diversification, the expansion to many locations, and the use of tax havens. Generally, the chains have large revenues with high profit margins with some documented quality problems. The lack of adequate public information about the ownership, costs, and quality of services provided by nursing home chains is problematic in all the countries. The marketization of nursing home care poses new challenges to governments in collecting and reporting information to control costs as well as to ensure quality and public accountability.

What Happens to a Nursing Home Chain When Private Equity Takes Over? A Longitudinal Case Study

We analyzed what happens to a nursing home chain when private equity takes over, with regard to strategy, financial performance, and resident well-being. We conducted a longitudinal (2000-2012) case study of a large nursing home chain that triangulated qualitative and quantitative data from 5 different data sources. Results show that private equity owners continued and reinforced several strategies that were already put in place before the takeover, including a focus on keeping staffing levels low; the new owners added restructuring, rebranding, and investment strategies such as establishing new companies, where the nursing home chain served as an essential "launch customer."

The Need for Higher Minimum Staffing Standards in U.S. Nursing Homes

Many U.S. nursing homes have serious quality problems, in part, because of inadequate levels of nurse staffing. This commentary focuses on two issues. First, there is a need for higher minimum nurse staffing standards for U.S. nursing homes based on multiple research studies showing a positive relationship between nursing home quality and staffing and the benefits of implementing higher minimum staffing standards. Studies have identified the minimum staffing levels necessary to provide care consistent with the federal regulations, but many U.S. facilities have dangerously low staffing. Second, the barriers to staffing reform are discussed. These include economic concerns about costs and a focus on financial incentives. The enforcement of existing staffing standards has been weak, and strong nursing home industry political opposition has limited efforts to establish higher standards. Researchers should study the ways to improve staffing standards and new payment, regulatory, and political strategies to improve nursing home staffing and quality.

The Need for Higher Minimum Staffing Standards in U.S. Nursing Homes

Many U.S. nursing homes have serious quality problems, in part, because of inadequate levels of nurse staffing. This commentary focuses on two issues. First, there is a need for higher minimum nurse staffing standards for U.S. nursing homes based on multiple research studies showing a positive relationship between nursing home quality and staffing and the benefits of implementing higher minimum staffing standards. Studies have identified the minimum staffing levels necessary to provide care consistent with the federal regulations, but many U.S. facilities have dangerously low staffing. Second, the barriers to staffing reform are discussed. These include economic concerns about costs and a focus on financial incentives. The enforcement of existing staffing standards has been weak, and strong nursing home industry political opposition has limited efforts to establish higher standards. Researchers should study the ways to improve staffing standards and new payment, regulatory, and political strategies to improve nursing home staffing and quality.

Trade-off Between Quality, Price, and Profit Orientation in Germany's Nursing Homes

International data suggest that for-profit nursing homes tend to provide lower quality than not-for-profit nursing homes. In Germany, the relationships between profit orientation, price and quality of nursing homes have not been investigated. We performed an observational study using secondary data from statutory quality audits of all nursing homes in Germany. The relationships were analyzed bivariately via Mann–Whitney U-Test and Kruskal-Wallis Test respectively, followed by a multivariate variance analysis which also covered the interaction effect between quality, price and type of ownership. 41 % of 10,168 German nursing homes were for-profit charging on average about 10 % less than not-for-profit homes. In five out of six quality categories under study, for-profit nursing homes provided lower quality than not-for-profit homes. Quality of care in all quality categories improved with increasing prices per day. However, for four out of six quality categories examined, the quality difference between for-profit and non-profit nursing homes existed independent of the price charged. When selecting a nursing home it is therefore advisable to consider the profit orientation of the institution. German legislation should require that statutory public quality reports contain details on the profit orientation of nursing homes.

[Trade-off between quality, price, and profit orientation in Germany's nursing homes]

BACKGROUND

International data suggest that for-profit nursing homes tend to provide lower quality than not-for-profit nursing homes. In Germany, the relationships between profit orientation, price and quality of nursing homes have not been investigated.

METHODS

We performed an observational study using secondary data from statutory quality audits of all nursing homes in Germany. The relationships were analyzed bivariately via Mann-Whitney U- and Kruskal-Wallis test, respectively, followed by a multivariate analysis of variance which also covered the interaction effect between quality, price and type of ownership.

RESULTS

41% of 10,168 German nursing homes were for-profit organizations charging on average about 10% less than not-for-profit homes. In five out of six quality categories under study, for-profit nursing homes provided lower quality than not-for-profit homes. Quality of care in all quality categories improved with higher cost per day. However, with four out of six quality categories examined, the quality difference between for-profit and non-profit nursing homes persisted, irrespective independently of the price.

CONCLUSION

When selecting a nursing home it is therefore advisable to consider the profit orientation of the institution. German legislation should require that statutory public quality reports contain details on the profit orientation of nursing homes.