July 1, 2016, The Boston Globe

State Senator Mark C. Montigny, vice chairperson of the Massachusetts legislature’s Joint Committee on Health Care Financing, sponsored a proposal that would raise maximum fines on substandard nursing homes from $50 to $10,000 a day. This new money would be used to establish a trust fund for nursing home improvement.

State lawmakers rejected the proposal to increase fines, but the language for the trust fund remains emptily intact. Senator Montigny said the defeat of his proposal to strengthen nursing home care “boils my blood,” and that the nursing home industry does not want to be held accountable.

Three-quarters of some 400 nursing homes serving more than 150,000 residents in Massachusetts are for-profit. A Boston Globe analysis found that the nonprofit nursing homes routinely devote more of their budgets to nursing care and less to CEO salaries. The legislature did approve funds for increased wages and benefits for nurse aides.

The Massachusetts Senior Care Association paid $435,000 to one of Boston’s top lobbying firms, Travaglini, Eisenberg & Kiley. One of its principals, Robert E. Travaglini, previously served as president of the Massachusetts senate.

“It’s a slap in the face to vulnerable nursing home residents and their families, and advocates,” said Wynn Gerhard, an elder-law attorney at Greater Boston Legal Services. “You have these profit-making chains coming in, they have money and resources, and they aren’t going to be deterred by $50 a day, which isn’t even enforced.”

NPQ has reported before on the “motivations and management mazes” of for-profit nursing homes and how, as reported by the Boston Globe, “these homes are making money on every single angle, they are hiding their profits, padding all their administrative costs, upping executive salaries.” NPQ gave this report in 2011 explaining how nonprofit nursing homes provide better care than their for-profit homes competitors demonstrating that “‘nonprofit’ isn’t just a tax status, and that the motivation for improving the quality of nursing care services is strongly correlated with homes’ nonprofit status.”

Extensive research through the years shows that the type of nursing home ownership affects the quality of care. This 1986 report, “For-Profit Enterprise in Health Care,” agrees with the case made above that for-profit and chain-operated nursing facilities tend to devote fewer resources to direct patient care, resulting in poorer quality of care.

In 2014, the Sacramento Bee opened the first of its three-part “Unmasked” investigation into the performance of for-profit nursing home chains with this statement:

One nursing home chain operating in California racked up abuse complaints last year at a pace seven times the statewide rate. A large competitor placed one in every 15 of its long-term residents in restraints. Still another corporate giant whose nursing homes dominate the Sacramento region experienced high nursing staff turnover at 90 percent of its facilities. If you’re a consumer anguishing over the placement of a loved one needing full-time nursing, how would you know this? The short answer: You wouldn’t.

As the U.S. population ages, the question of nursing home ownership has many important implications. The Affordable Care Act requires nursing facilities to report, and the Centers for Medicare & Medicaid Services to make publicly available, detailed ownership information. Nursing homes are regulated institutions. However, there is no in-depth, industry-wide analysis of quality of care. Senator Montigny’s proposal would have mandated the Massachusetts Center for Health Information and Analysis to conduct such an examination of the state’s nursing homes.

For-profit nursing homes operate on the principle that net income be directed to the owners, investors, or other shareholders. Nonprofit nursing homes and publicly owned facilities operate on the principle that net income is used to benefit clients. Both must balance their revenues and expenses to survive, but one is mission-driven, and the other is something else.—James Schaffer