As virus threat eases, alarms sound on hedge funds owning nursing homes

declinenhomedeathsnytfeb21-300x189Just as good news expands about vaccines and declining coronavirus cases and deaths in the nation’s nursing homes and other long-term care facilities, grim information also is developing on how the facilities’ ownership, particularly by wealthy investors, can be lethal to residents.

The positive effects of early efforts to get vulnerable long-term care residents and staff vaccinated can be seen in the accompanying graphic (courtesy of the New York Times). The newspaper reported this:

“Throughout the pandemic, there has been perhaps nowhere more dangerous than a nursing home. The coronavirus has raced through some 31,000 long-term care facilities in the United States, killing more than 163,000 residents and employees and accounting for more than a third of all virus deaths since the late spring. But for the first time since the American outbreak began roughly a year ago — at a nursing care center in Kirkland, Wash. — the threat inside nursing homes may have finally reached a turning point. Since the arrival of vaccines, which were prioritized to long-term care facilities starting in late December, new cases and deaths in nursing homes, a large subset of long-term care facilities, have fallen steeply, outpacing national declines, according to a New York Times analysis of federal data. The turnaround is an encouraging sign for vaccine effectiveness and offers an early glimpse at what may be in store for the rest of the country, as more and more people get vaccinated.

“From late December to early February, new cases among nursing home residents fell by more than 80%, nearly double the rate of improvement in the general population. The trendline for deaths was even more striking: Even as fatalities spiked over all this winter, deaths inside the facilities have fallen, decreasing by more than 65%.”

The newspaper also noted this:

“Experts attribute the improvements in large part to the distribution of vaccines. About 4.5 million residents and employees in long-term care facilities have received at least one dose of the vaccine, according to the Centers for Disease Control and Prevention, including about 2.1 million who have been fully vaccinated. Other factors, including the steep drop in new infections nationwide in recent weeks, may have contributed as well. Today, new cases in American nursing homes are at their lowest point since May, when the federal government began tracking such data.”

Perils of private equity investments in long-term care

Counterbalancing that excellent development — which means the scary, lonely, and destructive isolation of the pandemic may be lifting none too soon for many aged, sick, and injured long-term care residents — was the release of new research on the effects of private equity ownership of care facilities. As the Vox news site described the findings in a new working paper published by the National Bureau of Economic Research:

“When private equity firms acquire nursing homes, patients start to die more often … Private equity acquisitions of nursing homes is a pressing topic: Total private equity investment in nursing homes exploded, going from $5 billion in 2000 to more than $100 billion in 2018. Many nursing homes have long been run on a for-profit basis. But private equity firms, which generally take on debt to buy a company and then put that debt on the newly acquired company’s books, have purchased a mix of large chains and independent facilities — making it easier to isolate the specific effect of private equity acquisitions, rather than just a profit motive, on patient welfare.

“Researchers from Penn, NYU, and the University of Chicago studied Medicare data that covers more than 18,000 nursing home facilities, about 1,700 of which were bought by private equity from 2000 to 2017. Their findings are sobering. The researchers studied patients who stayed at a skilled nursing facility after an acute episode at a hospital, looking at deaths that fell within the 90-day period after they left the nursing home. They found that going to a private equity-owned nursing home increased mortality for patients by 10 percent against the overall average.

“Or to put it another way: ‘This estimate implies about 20,150 Medicare lives lost due to [private equity] ownership of nursing homes during our sample period’ of 12 years, the authors — Atul Gupta, Sabrina Howell, Constantine Yannelis, and Abhinav Gupta — wrote. That’s more than 1,000 deaths every year, on average.”

The authors fault wealthy investors for practices in the facilities that, counterintuitively, work to the detriment of healthier residents, causing their mortality to spike. Really sick residents, the experts found, require regimented care and it is easier to track if its details are not adhered to.

Reduced staff and more antipsychotic drugs

On the other hand, healthier residents may decline fast when, for example, private equity investors slash staffing with nurses and other health workers giving front-line care. As Vox quoted the study authors:

“[P]rivate equity acquisitions [of nursing homes] lead to cuts in the number of hours that front-line nurses spend per day providing basic services to patients. Those services, such as bed turning or infection prevention, aren’t medically intensive, but they can be critical to health outcomes. ‘The loss of front-line staff is most problematic for older but relatively less sick patients, who drive the mortality result,’ the authors wrote.”

With less staff, facilities owned by hedge funds also rely more on a disturbing means of dealing with residents: a detected “50% increase in the use of antipsychotic drugs.”

Let’s be clear about these powerful prescription medications: Many were developed for use with extreme patients like schizophrenic adolescents. Patient advocates and federal regulators have ripped owners and operators of nursing homes for using these zombie-creating drugs, so fewer paid staff each can “manage” more “compliant” residents. The pharmaceutical straitjackets, by inducing torpor, also can send relatively healthy seniors into fast decline.

In my practice, I see not only the harms that patients suffer while seeking medical services, but also the damage that can be inflicted on them and their loved ones by abuse and neglect in nursing homes and other long-term care facilities, including with excessive reliance on risky and dangerous drugs.

It is heartening news that the coronavirus’ reign of sickness and death in long-term care facilities may be subsiding. But this is hardly the time to take a victory lap, nor to revel in false self-congratulations. The vulnerable in the facilities, many so elderly, sick, and injured that their lives already were limited, can never recover lost time with loved ones. They need as much attention and care as can be lavished on them, in a post-pandemic period.

It also will be vital that we determine how so many grandmothers, grandfathers, aunts, uncles, moms, dads, and friends in lost their lives in long-term care. As David Grabowski, a Harvard expert in health policy and long-term care, has observed in social media posts: “The best time for the U.S. to have responded to the Covid crisis in nursing homes was at the start of the pandemic. The second-best time is now.” He also has observed this in the terse wording of Twitter:

“Fixing nursing homes isn’t [a] black-and-white [issue]. There are good & bad actors. There is underpayment & also misuse of public funds. Ineffective regulations & poor enforcement. Complicated issue requiring nuanced solutions.”

We have lots of work to do — to deal with long-term care facilities’ funding, ownership, design, and staffing (too few folks, overworked, underpaid, and under trained), and many other concerns. We need to ensure the most vulnerable among us — who, in a rapidly graying nation may be us — have safe, hygienic, pleasant, and pleasing places to live, not just rooms to wait for death. We need to ensure long-term care facilities get to a far better place than they are now.

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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