Most of us are likely to need assisted living and residential care at some point in our lives. Will it be there?

Photo by Danie Franco on Unsplash.

Healthcare industry insiders, from long-time pharmacists and medical professionals to hospital administrators, have been sounding the alarm about the state of senior care in America recently.

And with good reason.

As in so many other industries and organizations, Covid19 revealed underlying problems in the U.S. healthcare system and accelerated a reckoning already long overdue. The focus on Covid19’s threat to seniors in long-term medical care facilities and nursing homes threw other problems into sharper focus.

Our Seniors are still in Danger…and It’s Not Covid,” warned pharmacist Linda Witzal for Medium in January. “The system that we have empowered to take care of our most vulnerable populations needs a total overhaul.”

What industry insiders call “bad operators” are eroding the already fragile ecosystem of senior care in America. Medicare fraud is rampant and getting worse all the time. The owners of shady operations are obscured behind a shell game of parent corporations and digital smokescreens, making it almost impossible for average families shopping for quality senior care to discover questionable ownership, conflicts of interest, and even past evidence of fraud and financial malfeasance.

Ownership of nursing homes is not transparent to the public,” Witzal pointed out. “Have you ever tried to find out who the owner of the nursing home is? Check the Data Registry lately? You will find many layers, and shell companies, and it will take you hours as you sift through the ownership maze.”

“Do you know who owns the pharmacy that provides medications to the nursing homes?” Witzal asks. “Is there common ownership? Could that be a conflict? Is the nursing home for-profit or non-profit?”

The answers to these questions, and the ease with which potential patients and their families can access them, may determine the quality of elderly care in America for this generation and the next.

Peeling back the layers of this complex business, let’s start with a basic understanding of the two major types of nursing homes operated in America.

Nonprofit or Profitable?

There are key differences between nonprofit care facilities and for-profit care homes, though both provide the same range of services such as nursing care, assistance with daily living activities, rehabilitation, nutritional support, and hospice.

A non-profit care home is a facility that is owned and operated by a charitable organization, to provide care to individuals who are facing a life-limiting illness. These facilities do not operate to make a profit, and any surplus funds generated from their operations are used to improve the quality of care provided or to further their mission.

On the other hand, a for-profit hospice care home is a facility that is owned and operated by individuals or companies with the primary goal of generating a profit. These facilities generate revenue by providing hospice care services, and the profits generated are used to pay dividends to shareholders, repay loans, or invest in the business.

While there is no inherent difference in the quality of care provided by non-profit or for-profit hospice care homes, the ownership structure and goals of the facilities can affect how they are run and funded.

For example, non-profit hospice care homes may have more resources available for improving facilities and providing additional services, while for-profit facilities may focus more on maximizing their profits.

There are several advantages of a non-profit nursing home:

  1. Mission-driven focus: Non-profit nursing homes are often driven by a mission to provide quality care to the elderly and other vulnerable populations, rather than by a profit motive. This can result in a more compassionate and patient-centered approach to care.
  2. Greater resources: Non-profit nursing homes often have more resources available to invest in the facilities, staff, and services. This can result in higher quality care and a better resident experience.
  3. Flexibility in funding: Non-profit nursing homes have access to a wider range of funding sources, including private donations, grants, and government funding, which can provide additional resources for improving the quality of care and the facilities.
  4. Community involvement: Non-profit nursing homes are often more deeply connected to the communities they serve and may involve volunteers, families, and community organizations in their operations. This can result in a more inclusive and supportive environment for residents and their families.
  5. Tax benefits: Non-profit nursing homes are often exempt from some taxes, which can free up additional resources to be used for improving the quality of care and facilities.

It’s important to note that not all non-profit nursing homes are created equal and the quality of care can vary.

There are several advantages of a for-profit nursing home as well:

  1. Business experience: For-profit nursing homes are often run by experienced businesspeople who understand the importance of financial stability and efficiency. This can result in well-managed facilities that are financially sound and able to provide consistent care.
  2. Market-driven approach: For-profit nursing homes are motivated by a profit motive, which can result in a market-driven approach to care. This can mean that they are more responsive to the needs and preferences of residents and their families, and may offer a wider range of services and amenities.
  3. Competition and innovation: The for-profit model of nursing home care can encourage competition, which can drive innovation and improvement in the quality of care and facilities.
  4. Financial stability: For-profit nursing homes often have access to investment capital and other funding sources, which can provide stability and resources for maintaining facilities and providing care.

Unfortunately, both types are susceptible to Medicare Fraud.

Medicare fraud is any illegal activity that involves the submission of false or fraudulent claims to the Medicare program for payment. Since Medicaid and Medicare are government-funded health insurance programs that provide coverage to millions of people, they are large and complex systems that can be vulnerable to abuse.

Fraudsters attempt to exploit these programs by billing for services that were not provided, overcharging for services, or falsifying patient information to receive payment for services that are not covered. These types of fraud can result in significant financial losses to the government and taxpayers, and can also compromise the quality of care received by patients.

Both Medicaid and Medicare have established programs and procedures to detect and prevent fraud, and the government has taken steps to crack down on fraudulent activity.

Despite efforts to prevent fraud, Medicare remains a target for criminals because of the large amounts of money involved and the relative ease with which fraud can be committed.

Without better regulation and greater transparency, an industry already beset by bad operators and beleaguered by Medicare fraud may not be around in 50 years.

Or even 10.

Unless we save senior care in America, those future families let down by failures in the system and the cupidity of bad operators in the nursing home business may be ours.

The lives we save may very well be our own.

(contributing writer, Brooke Bell)