I threw down the gauntlet for the nursing home industry to focus on clinical care two years ago.
I warned that in the spring of 2020, providers would “start to hurt because the cost of caring will hit the P&L.” I then wrote an article on the critical importance of the leadership team, saying, “In today’s world of increasing clinical complexity, there is no way that a NHA or DON alone can effectively run a nursing home.”
We will never know what would have happened to the nursing home industry in the spring of 2020 if the COVID-19 pandemic hadn’t struck. The industry was ill prepared. I was recently quoted saying the chain of nursing homes I previously oversaw was “scaring the daylights out of me.” Three decades as a geriatrician, having overseen the nursing home arm of California’s quality improvement organization and overseeing the operations of a large nursing home chain gave me a vantage point that few have.
The need for full transparency provides the impetus for the Biden administration to announce a series of changes that can improve nursing home care. I challenge the private nursing home sector to embrace this concept.
The ownership of the facilities I oversaw is just one example of how real estate, ancillary businesses and related parties primarily interested in turning short-term profits can easily siphon off taxpayer money.
It is fascinating and instructive that I have been criticized for providing leadership training to nursing home administrators, directors of nursing and medical directors. Training is necessary to build the teamwork and critical thinking skills desperately needed in nursing homes. Spending money to improve the skills of leadership teams in 70 nursing homes is something I’d do over and over again.
Invest in nursing home leaders for improvement
Present leadership at the Center for Medicare & Medicaid Services and the Centers for Disease Control and Prevention have done too little to mitigate the devastating toll of COVID-19. The nursing home industry has struggled under the weight of challenging financial underpinnings.
One message has been lost in the noise: Nursing home employees are true heroes, working in what has been the most dangerous job in this country over the past 10 months.
During the summer of 2018, as the CEO of Rockport, I visited all 74 of our California facilities. I spoke with certified nursing assistants, nurses, housekeeping and maintenance staff. I spoke to residents. What became clear to me was that most of our nursing home leadership and staff were compassionate people trying their best while operating under challenging conditions.
Several of our facilities were top notch, despite pressures applied by ownership. Their common thread was a stellar leadership team that exuded positive culture. Shortly after my visits, we put each facility’s leadership teams through a leadership and management training course. This was the first step in providing these leaders with the necessary skills to be more effective stewards for “doing the right thing.” Any assertion that the program was a waste of money speaks volumes regarding the extent to which some elements of the nursing home industry will go to prevent strong leadership from existing in its facilities.
The best nursing home leaders place a high standard on quality of care. Others focus primarily on filling beds and meeting their operating budgets. Aside from labor costs, rent and related party payments have a significant impact on the operating budget.
“Many facilities around the country that have not been able to make it and have gone bankrupt over the last number of years, the cause of that has been the REITs,” Craig Cornett, CEO of the California Association of Healthcare Facilities, said at an October State Assembly hearing.
Ironically, in the case of Brius and other privately held companies, it is not REITs, but individual real estate owners who apply significant pressure to their own nursing home operations. The industry as a whole will be better off as soon as real estate, ancillary businesses and related party ownership is made completely transparent. The federal government was given clear direction in Section 6104 of the Affordable Care Act to address these issues.
Make transparency part of recovery
During the COVID-19 pandemic, publicly traded nursing home chains such as Genesis and Signature have placed great emphasis on their medical directors and facility leadership. The nursing home industry still has a long way to go in this regard.
Decades of misaligned financial incentives have created bad habits in relation to the training of nursing home leaders. These companies are listing badly under the weight of the pandemic and pre-existing weaknesses in the industry’s financial underpinnings.
It is likely the federal government will need to step in to prevent many homes from closing. It may also need to consider allowing nursing homes to forgo rent payments to large real estate owners and REITs for a defined period of time while individual facilities get back on their feet.
The government must also make an effort to address the siphoning of funds and an underinvestment in frontline staff. Implementing Section 6104 is a beginning – and using cost information to connect the dots between how federal, state and private funds are actually spent, in combination with analyzing staffing, survey results and ownership data, will move the needle in a major way toward true accountability.
Full transparency is essential to the future of the nursing home industry. Let’s hope it happens soon.
Michael Wasserman, M.D., C.M.D., is a geriatrician and former CEO of Rockport Healthcare Services. He is the Immediate Past President of the California Association of Long Term Care Medicine (CALTCM).