Health Care Reform Articles - April 2, 2021

 Editor's Note - The following article is just one example of the many problems created by our for-profit, corporate and competive approach to health care in the US. It documents a struggle - about money and who gets to keep the most of it - between two corporate giants. It's hard to distinguish which of the corporate Goliaths described in the article is the winner.  

But it's sure easy to identify the losers.

-SPC

Doctors Accuse UnitedHealthcare of Stifling Competition

A multistate group of anesthesiologists filed cases in Texas and Colorado, accusing the insurance giant of squeezing them like a “boa constrictor.”

by Reed Abelson - NYT - April 1, 2021

UnitedHealthcare, one of the nation’s largest health insurers, is being sued in two states by a large group of anesthesiologists who are accusing the company of stifling competition by forcing the doctors out of its network and by using its enormous clout to pressure hospitals and surgeons to stop referring patients to them.

The lawsuits, filed Wednesday in Colorado and Texas, were brought by U.S. Anesthesia Partners, a sizable physician-owned practice backed by private-equity investors. The practice claims in the Texas lawsuit that United engaged in “unlawful tactics and pressure campaigns,” including “bribing” surgeons with contracts that paid them much more if they steered patients away from the group’s anesthesiologists.

The doctors make similar claims in the lawsuit they filed in Colorado, where they say United orchestrated a “group boycott.” They describe United as “like a boa constrictor,” squeezing the group “from all angles.”

In an emailed statement, United said the lawsuits were “just the latest example of the group’s efforts to pressure us into agreeing to its rate demands and to distract from the real reason that it no longer participates in our network.” The company said it had not yet been served with either complaint.

United added that many of the private-equity-backed physician groups “expect to be paid double or even triple the median rate we pay other physicians providing the same services,” driving up the cost of care. The company says these groups have been using their increasing presence in a given regional market to demand higher rates. It says that its goal has been to keep the groups in network but that it is rethinking its approach.

While insurers and the hospitals and doctors have long had ugly standoffs during contract negotiations, the parties typically come to a last-minute agreement. But United has become increasingly aggressive in its stance toward large physician groups like U.S. Anesthesia, dropping a number of them from its network, according to analysts.

“United has a lot of market power and they want to use it to their advantage,” said Dean Ungar, who follows the insurance behemoth for Moody’s Investors Service, which evaluates the company’s debt. “They are willing to play hardball with some of these companies.”

U.S. Anesthesia, which operates in nine states, said it had a long relationship with United and was part of the carrier’s networks in Texas and Colorado until last year.

But the doctors also raise questions about the insurer’s potential conflicts of interest as its parent company, UnitedHealth Group, also offers medical services. UnitedHealth, which had $257 billion in sales last year, has become a sprawling conglomerate that includes more than 50,000 physicians, a chain of surgery centers, a pharmacy benefit manager and other assorted health care businesses in addition to its traditional insurance business.

UnitedHealth directly competes with U.S. Anesthesia, according to the Texas lawsuit, through an ownership interest in Sound Physicians, a large medical practice that provides emergency and anesthesiology services. Sound Physicians is looking to expand in markets like Fort Worth and Houston, and U.S. Anesthesia claims in the lawsuit that its doctors were contacted by Sound Physicians “to induce them to leave” and challenge the noncompete provisions in their contracts to work with the United group.

The major insurer throws its weight around in other ways, the lawsuit claims. While the company’s Optum unit, which operates the surgery centers and clinics, is technically separate from the health insurer, the doctors accuse United of forcing its OptumCare facilities to sever their relationships with the anesthesiology group and pushing in-network surgeons to move their operations to hospitals or facilities that do not have contracts with U.S. Anesthesia.

“United and its affiliates have extended their tentacles into virtually every aspect of health care, allowing United to squeeze, choke and crush any market participant that stands in the way of United’s increased profits,” the doctors claim in their lawsuit.

It is standard practice, United said, for an insurer to encourage the use of hospitals and doctors within its network.

In contrast to many smaller physician groups that are struggling because of the pandemic, United has maintained a strong financial position, shoring up profits while elective surgeries and other procedures were shut down, resulting in fewer medical claims. So it has continued to expand, hiring more doctors and buying up additional practices. The company says it plans to add more than 10,000 employed or affiliated doctors this year.

The relationship between insurers and providers has become more complicated as more insurance carriers own doctors’ groups or clinics. “They want to be the referee and play on the other team,” said Michael Turpin, a former United executive who is now an executive vice president at USI, an insurance brokerage.

Employers that rely on UnitedHealthcare to cover their workers have a difficult time judging who benefits when insurers fail to reach an agreement to keep a provider in network. “This is just as much about profit as it is about principle,” Mr. Turpin said.

United has defended its actions in the past by pointing to the role many of these doctors’ groups, financed by private equity, played in creating surprise medical bills that overwhelmed and burdened Americans around the country. Because the groups’ doctors specialize in areas like emergency care or anesthesia, patients are often shocked to find out that they are not in network even if the hospital where they received care is.

Some of the doctors’ groups, like Envision Healthcare, whose doctors provide emergency-room care, pursued a strategy of keeping their doctors out of network to make more money. Patients were caught in the middle as insurers and doctors fought over out-of-network bills, and many people ended up owing large sums not covered by their health plans.

When criticism of these tactics pressured Congress to consider remedies, the private-equity firms backing groups like Envision and TeamHealth spent large sums trying to block federal legislation. Lawmakers finally took action at the end of last year to protect patients from surprise bills by requiring parties to reach a fair price.

But doctors say United is increasingly unwilling to come to an agreement they can accept. Envision, which eventually agreed to lower its payments and be included in the health plan’s network, said United dropped it this year because it would not agree to “drastic cuts to clinician pay.”

“United turned down multiple proposals that would reduce the total cost of care for patients,” Envision said in an emailed statement. “We are left to wonder why it appears United does not want our 25,000 clinicians in their network.”

The insurer has also dropped other groups. Last year, Mednax, which employed specialists in neonatology and anesthesiology, announced it had been dropped by United in four states. The company has since sold both its radiology and anesthesiology practices.

https://www.nytimes.com/2021/04/01/health/unitedhealthcare-lawsuit.html?

Democrats Gave Americans a Big Boost Buying Health Insurance. It Didn’t Come Cheap.

by Noam Levey - Kaiser Health News - March 24, 2021

When Democrats pushed through a two-year expansion of the Affordable Care Act in the covid-relief bill this month, many people celebrated the part that will make health insurance more affordable for more Americans.

But health care researchers consider this move a short-term fix for a long-term crisis, one that avoids confronting an uncomfortable truth: The only clear path to expanding health insurance remains yet more government subsidies for commercial health plans, which are the most costly form of coverage.

The reliance on private plans — a hard-fought compromise in the 2010 health law that was designed to win over industry — already costs taxpayers tens of billions of dollars each year, as the federal government picks up a share of the insurance premiums for about 9 million Americans.

The ACA’s price tag will now rise higher because of the recently enacted $1.9 trillion covid relief bill. The legislation will direct some $20 billion more to insurance companies by making larger premium subsidies available to consumers who buy qualified plans.

And if Democrats want to continue the aid beyond 2022, when the relief bill’s added assistance runs out, the tab is sure to balloon further.

“The expansion of coverage is the path of least resistance,” said Paul Starr, a Princeton University sociologist and leading authority on the history of U.S. health care who has termed this dynamic a “health policy trap.”

“Insurers don’t have much to lose. Hospitals don’t have much to lose. Pharmaceutical companies don’t have much to lose,” Starr observed. “But the result is you end up adding on to an incredibly expensive system.”

By next year, taxpayers will shell out more than $8,500 for every American who gets a subsidized health plan through insurance marketplaces created by the ACA, often called Obamacare. That’s up an estimated 40% from the cost of the marketplace subsidies in 2020, due to the augmented aid, data from the nonpartisan Congressional Budget Office indicates.

Supporters of the aid package, known as the American Rescue Plan, argue the federal government had to move quickly to help people struggling during the pandemic.

“This is exactly why we pay taxes. We want the federal government to be there when we need it most,” said Mila Kofman, who runs the District of Columbia’s insurance marketplace. Kofman said the middle of a pandemic was not a time to “wait for the perfect solution.”

But the large new government commitment underscores the disparity between the high price of private health insurance and lower-cost government plans such as Medicare and Medicaid.

Acutely aware of this disparity, the crafters of the ACA laid out a second path to provide health insurance for uninsured Americans beside the marketplaces: Medicaid.

The half-century-old government safety net insures about 13 million low-income, working-age adults who gained eligibility for the program through the health law and make too little to qualify for subsidized commercial insurance.

Medicaid coverage is still costly: about $7,000 per person every year, federal data indicates.

But that’s about 18% less than what the government will pay to cover people through commercial health plans.

“We knew it would be less expensive than subsidizing people to go to private plans,” said former Rep. Henry Waxman, a California Democrat who as chairman of the House Energy and Commerce Committee helped write the Affordable Care Act and has long championed Medicaid.

For patients, Medicaid offered another advantage. Unlike most commercial health insurance, which requires enrollees to pay large deductibles before their coverage kicks in, Medicaid sharply limits how much people must pay for a doctor’s visit or a trip to the hospital.

That can have a huge impact on a patient’s finances.

Take, for example, a 50-year-old woman living outside Phoenix with a part-time job paying $1,000 a month. With an income that low, the woman could enroll in Arizona’s Medicaid program.

If, one day, she slipped on her steps and broke an arm, her medical bills would likely be fully covered, leaving her with no out-of-pocket expenses.

If the same woman were to find a full-time job that pays $4,000 a month but doesn’t offer health benefits, she would still be able to get coverage, this time through a commercial health plan on Arizona’s insurance marketplace.

Taxpayers would still pick up a portion of the cost of her health plan, in this case about $300 a month, or half the $606 monthly premium for a basic silver-level plan from health insurer Oscar, according to a subsidy calculator from KFF, a health policy nonprofit. The woman would have to pay the rest of the monthly premium.

Unlike Medicaid, however, her Oscar “Silver Saver” plan comes with a $6,200 deductible.

That means that the same broken arm from her fall would likely leave her with medical bills topping $4,700, according to cost estimates from the federal healthcare.gov marketplace.

The main reason commercial health plans cost more and saddle patients with higher medical bills is because they typically pay hospitals, doctors and other medical providers more than public programs such as Medicaid.

Often the price differences are dramatic.

For example, health insurers in the Atlanta area pay primary care physicians $93 on average for a basic patient visit, according to an analysis of 2017 commercial insurance data by the Health Care Cost Institute, a research nonprofit.

By contrast, Georgia’s Medicaid program would pay the same physician seeing a patient covered by the government health plan just $41, according to the state’s fee schedule.

“It’s much cheaper to deliver health coverage to people through public programs like Medicaid than through private insurance because the prices paid to doctors, hospitals and drug companies are so much less,” said Larry Levitt, executive vice president for health policy at KFF.

The price disparity also explains why the health care industry, including insurers and providers, for years has fought proposals to create a new government plan, or “public option,” that might pay less.

Industry officials frequently argue that hospitals and physicians couldn’t stay in business unless they charge higher prices to commercial insurers to offset the low prices paid by government programs.

The Biden administration and congressional Democrats for now skirted a battle over this issue by simply upping subsidies for private health insurers.

 https://khn.org/news/article/covid-relief-law-health-insurance-boost-aca-cost-analysis/ 

 

 

The Potter Report   10 years after the ACA, mistakes loom large March 25, 2021

10 years ago today, on the first anniversary of the Affordable Care Act (ACA), I wrote about the good things the law did, but stressed that we needed to view it as only the starting point of a journey toward needed reform. Unfortunately, we have not made much progress on that journey.   Although 20 million now have health insurance as a result of the law, a huge growing percent can’t use that insurance to get the care they need. That’s because Congress and the Obama administration were too focused on premiums ... exactly what the insurance industry wanted them to focus on!   Focusing on premiums meant that Democrats gave scant attention to how insurers would pick Americans’ pockets by jacking up deductibles year after year. In fact, deductibles are patients’ biggest struggle now, more than having enough doctors in-network, or even the price of premiums.   Zeke Emanuel, who advised Obama on health policy, recently told The New York Times that not addressing deductibles was “a huge mistake.” While Congress just passed a $1.9 trillion Covid-19 relief bill, Emanuel said they were under pressure in 2010 to keep the price of ACA under $1 trillion.   People in high-deductible plans don't go to the doctor when they should, or pick up their prescriptions because of the thousands they pay out of pocket before insurance kicks in. Meanwhile, insurance companies posted record profits every year since the ACA was passed, even during COVID!   As growing numbers of Americans skip needed care, those insurers are paying their top executives, like David Cordani, the CEO of Cigna, where I used to work, astronomical salaries. The company noted in a filing last week Cordani’s pay totaled $79 million.   Cigna executives were saying back when I was there that Americans needed to “put more skin in the game.” Obama and Congress bought that line. It’s way past time that Cigna put skin in the game. And, it’s time that our government gives people relief so they can actually use their insurance, for once.   The Kaiser Family Foundation says that the year before the ACA was passed, most people on average were able to meet their deductibles by March 18. That was what Kaiser refers to as Deductible Relief Day. Last year Deductible Relief Day didn’t arrive until May 19. The bottom line --- this is a broken system. The ACA did a bunch of good things. But our work to fix this mess is not close to over. Not by a long shot.   Private equity piles on debt to pull cash from health firms  By Sabrina Willmer - Bloomberg - March 24, 2021 Healthcare companies are taking on more debt to pay dividends to their private equity owners, just a year after the start of a pandemic that plunged the industry into crisis. At least five U.S. healthcare firms have borrowed heavily in part to fund hundreds of millions of dollars of such payouts in the first quarter, according to a report to be released Wednesday by the nonprofit Private Equity Stakeholder Project. The practice, known as dividend recapitalization, is gaining steam as investors hunt for yield with interest rates near historic lows. Meanwhile, healthcare companies are on a stronger footing, with patient visits rebounding and the government unleashing economic stimulus. Healthcare firms have already borrowed about $3.7 billion in 2021, partly to fund payments to private equity owners, more than double the amount issued all of last year, according to data from S&P Global Market Intelligence. At the current pace, it would be the industry’s most active year for borrowing since 2015. “Investor demand for leveraged loans is outpacing supply so far this year, sending prices in the secondary market soaring,” said Marina Lukatsky, a senior director at S&P. Dividend recapitalization is one reason wealthy investors are drawn to private equity, as they don’t have to wait years for a payout. Private equity’s main lobbying group, the American Investment Council, defended the practice, arguing that the loans are made to financially sound companies and help retirees because public pension plans are among the clients of private equity funds. Dividend recapitalizations accounted for just 6% of the total market for leveraged loans last year, the trade group said, citing S&P data. But critics including the Private Equity Stakeholder Project say the strategy destroys value. “By saddling companies with debt to extract cash for themselves, private equity firms put those companies at risk for restructuring, bankruptcy, or cost cutting to make up the interest payments and pay off that debt,” said Eileen O’Grady, a coordinator at the nonprofit. The report singled out two private equity-owned healthcare firms: DuPage Medical Group, a network of more than 750 doctors in the Chicago area, and the Mentor Network, which treats children and adults with intellectual disabilities. DuPage, which received about $80 million in grants and loans from taxpayers in 2020, distributed $209 million this year to owners including Ares Management, using leftover cash from the sale of some office buildings and additional debt, according to Moody’s Investors Service. The distribution is “a credit negative as it points to the aggressive nature of DuPage’s financial policies,” Moody’s analysts wrote in a report. “Combined with higher gross financial leverage, this will leave DuPage more weakly positioned to absorb any unexpected operating setback or incremental debt.” The company plans to repay the government loans and used the grants solely to make up for lost revenue and costs from the pandemic, DuPage spokeswoman Maria McGowan said. “Our recent refinancing enabled us to further strengthen our balance sheet, reduce our interest expense and take advantage of positive market conditions,” she said. The Mentor Network, meanwhile, took on more debt and distributed $375 million to its owners — the second dividend since it was acquired two years ago by Centerbridge Partners and Vistria Group. While Moody’s warned of high debt, it said the company had ample cash to meet its obligations. In December, the Senate Finance Committee reported the findings of investigations into two Mentor Network affiliates, alleging poor patient care and a failure to report incidents of abuse and neglect. A spokesperson for the company declined to comment.  https://www.latimes.com/business/story/2021-03-24/private-equity-piles-on-debt-to-pull-cash-from-health-firms Taxpayers Fund Research and Drug Companies Make a Fortune The pharmaceutical industry doesn’t want things to change, but Americans can have both lower prices and innovation. By David E. Mitchell - NYT - March 24, 2021 The director of the Centers for Disease Control and Prevention is worried about how Americans will pay for vaccines in the future. As well she should be. “I worry about the day where the vaccine will no longer be free,” the director, Dr. Rochelle Walensky, said this month, referring to the fact that the government is providing coronavirus vaccinations to all Americans at no cost. “What about if we need a third booster?” Dr. Walensky asked. “What happens then? Who’s going to pay for that?” This question should concern every American and every policymaker in Washington. These vaccines, which are critical to ending the scourge of Covid-19, were developed with government funding and purchased for $10 to $19.50 per dose with taxpayer dollars. Now they are poised to jump in price — a lot, if you listen to the stated intentions of vaccine producers. Executives at Pfizer, Moderna and Johnson & Johnson, the three companies whose coronavirus vaccines have been approved for emergency use in the United States, have said they will maintain their current pricing models during the pandemic but expect to raise prices after it ends. Frank D’Amelio, Pfizer’s chief financial officer, recently said that in a postpandemic environment, “obviously, we’re going to get more on price,” noting that vaccine prices are normally $150 to $175 per dose. Many experts now predict that Covid-19 booster shots will become a regular part of our lives for years. An increase in the price of coronavirus vaccines would have considerable impact on American health care spending. If Pfizer raised the price of its coronavirus vaccine from $19.50 per dose to $175, a yearly shot for every American adult would cost $44.7 billion and could increase annual U.S. drug spending by 9 percent. Pfizer has claimed it did not rely on government money to develop its vaccine, but that’s not exactly true. Pfizer did not receive U.S. funding to develop its vaccine, as did Johnson & Johnson and Moderna, which received support from the National Institutes of Health. While Pfizer had already been investing in mRNA vaccines, it was most likely able to bring its coronavirus vaccine to market in record time in part because of recent and past government investment in mRNA research. (Pfizer’s German partner in its vaccine development, BioNTech, received a $445 million grant from its national government.) Over the past several decades, as private companies invested less in vaccines, the government, fearing a pandemic, took up the slack. Scientific advances in mRNA vaccine technology that were funded by the National Institutes of Health and the Defense Advanced Research Projects Agency enabled Pfizer and Moderna to start working on a coronavirus vaccine as soon as the virus’s genetic sequence was available. The United States government was prepared to spend whatever was necessary — $18 billion to date — to facilitate the development of vaccines that would end the spread of the coronavirus. The government was willing to assume the financial risks of vaccine development and to permit the companies to begin manufacturing doses before clinical trials were even completed. The story of coronavirus vaccines is the story of drug development in America writ large. Government funding contributed to research associated with all 210 new drugs approved by the U.S. Food and Drug Administration between 2010 and 2016, for example. The director of the National Institutes of Health, Francis Collins, said, “We at N.I.H. play a very major role in the early stages of almost every drug that gets developed and approved by the F.D.A.” Yet in the United States, the government often funds research and development and then hands off the ownership of vaccines and medicines to companies that can charge whatever price they think the market will bear. Drug companies often demand a premium price to compensate for early risk that was actually borne by taxpayers. I have an incurable cancer and am currently kept alive by four drugs with a combined price of more than $900,000 per year. Medicare pays for most of this, but one drug costs me $18,000 per year out of pocket. I know the importance of both innovation and affordability. And when patients like me suggest limiting the drug industry’s power to dictate prices, the companies threaten that innovation will cease, even though the foundation for most innovation in drug development is paid for by government, not private companies. Which brings us back to Dr. Walensky’s very legitimate concerns about how we will pay for coronavirus vaccines in the future. We can start by allowing Medicare to negotiate the prices it pays for medicines and vaccines, which the U.S. government is precluded from doing now. The U.S. can also protect Americans from price gouging by tying drug price increases to the rate of inflation. Americans should stop buying the pharmaceutical industry’s argument that innovation and new drug development will dry up if the government uses its purchasing power and bargains to get a better deal. The United States spends more per capita than any other wealthy nation for prescription drugs — often the same drugs available for far less overseas. And while taxpayer dollars play a key role in funding innovation, the pharmaceutical industry enjoys profits that are almost double the average of companies in the S&P 500. We can have lower prices as well as innovation. In the coming weeks Congress is expected to advance legislation that would allow Medicare to negotiate drug prices. President Biden has pledged his support. This year, we can achieve reforms that both advance innovation and ensure Americans can afford the medicines — and vaccines — we need. https://www.nytimes.com/2021/03/24/opinion/coronavirus-vaccine-cost-pfizer-moderna.html?referringSource=articleShare    The Nursing Home Vulnerabilities That Led to Disaster Experts say these five main factors caused the colossal failures during the pandemic by Emily Gurnon - Caregiving - March 26, 2021 Patricia Olthoff-Blank thought everything was going just fine at her mother's nursing home in rural Buffalo Center, Iowa. Virginia Olthoff had lived there for 15 years, and the administration communicated frequently with her family about her care. Then Olthoff-Blank got a 3 a.m. call from an emergency room nurse. She learned, to her horror, that her mother was severely dehydrated. An ER physician told her, "This did not just happen." He believed her mother had been without water for four or five days.  Several hours later, Virginia Olthoff was dead. Her daughter recounted the events in testimony before the Senate Finance Committee in March 2019, telling them a Department of Inspections and Appeals report revealed her mother had not been eating or drinking for almost two weeks and had not received IV fluids. She had been crying out in pain and had lost considerable weight.  The result? Employees don't stick around. Despite repeated pleas by certified nursing assistants to their superiors about her mother's condition, "nothing was done," Olthoff-Blank said.  The pandemic has exacerbated and raised awareness about the poor conditions in many nursing homes nationwide. But those conditions existed before COVID-19 hit the U.S., and they are likely to continue unless changes are made, experts say.  "There's an opportunity right now, because there are a lot of eyes on the nursing home sector," said David Grabowski, professor of health care policy at Harvard Medical School. "One of my big concerns is as things return to normal … [people will say] we can go back to business as usual. Business as usual wasn't working before the pandemic, and it certainly didn't work during the pandemic. We need to make some real changes here." What set nursing homes up to fail so dramatically during the pandemic? Experts point to five main factors. 1. Staffing Chronic staffing shortages in nursing homes stretch existing staff to breaking points. These jobs of frontline workers, like certified nursing assistants (CNAs), are often as difficult as retail and fast food and usually pay less (the average annual income for a CNA in a nursing home is $28,450). The result? Employees don't stick around. "We found turnover rates of over one hundred percent in a calendar year, meaning basically the entire staff turns over each year — and some nursing homes have turnover as high as three hundred percent," Grabowski said, referring to a study he and colleagues published March 2021 in Health Affairs.  "We don't pay those direct caregivers enough," he said. "They're largely women, many are persons of color and immigrants, and they're overlooked in a lot of ways in terms of where we direct resources in our health care system." Inadequate staffing has a direct impact on residents, who may not only get poor care but cannot develop relationships with workers when they are there one day and gone another, Grabowski said. "You talk to the residents and you ask them, 'What is it about this nursing home that you liked or didn't like?' and it's always about the staff," he said. Staffing at the professional nurse level is also vital, said Charlene Harrington, professor emerita of social behavioral sciences in the School of Nursing at the University of California, San Francisco. Harrington joined 21 other nursing experts in publishing a call to the Centers for Medicare and Medicaid Services (CMS) in March for a federal mandate for a stronger presence of registered nurses (RNs) in nursing homes. CMS staffing rules currently call for one RN on duty at a nursing home for eight consecutive hours each day. Harrington and her colleagues said that should be increased to a 24-hour, seven-day onsite RN presence. There are no federal ratios for staff of any level. "It's pure ageism that you can warehouse older people and not have to get adequate staff and pay them so that they're competent and have experience," Harrington said. Pamela Mickens, a long-term care ombudsman in Dallas, said she sees the impact of inadequate staffing on a daily basis. But a comment by a resident's family member crystallized the issue of staffing standards for her. The family member worked in the prison system and pointed out that there are staffing ratios for inmates, but not for people in nursing homes, Mickens recalls. "That was an epiphany for me," she said. 2. Funding Medicaid covers more than 60% of all nursing home residents, and Medicaid reimbursements cover 70% to 80% of nursing home operating costs, according to the American Health Care Association, an industry group. It points to that funding gap as the culprit in "shoestring budgets." "Medicaid is not a generous payer," Grabowski said. "The way most nursing homes have made things work is to take on these short-stay, post-acute patients who come from the hospital," since Medicare covers these patients for a limited time and at a much higher rate. That creates incentives to hospitalize long-term patients and bring them back, Grabowski said. "The margins on that side of the business are really quite high." Harrington, of UCSF, said her research shows the nursing home payment model is not the problem. "All the nursing homes say they don't have enough money, but in reality they [for-profit nursing homes] make excessive profits on the backs of their poorly paid staff," she said. 3. Corporate Structure Those profits, Harrington said, are hidden by the often byzantine corporate structure that undergirds for-profit nursing homes, which make up 70% of the total. There's a lack of acknowledgment that residents have rights. An article from Kaiser Health News revealed it has become increasingly common for nursing homes to outsource goods or services to companies they control or have a financial interest in. Some even rent their buildings back from a sister corporation. The result: the owners can siphon off profits that are not reflected in the nursing homes' books. A related benefit for nursing homes is that, if they are sued, the plaintiffs often have a hard time collecting, since the assets are not held with the licensee, Kaiser reported. "They set up these complex structures, and they're pulling out so much money from their related party organizations … there's no money left for staffing and services," Harrington said. She advocates for greater transparency and financial accountability in nursing homes. 4. Lack of Oversight and Enforcement Nursing homes agree to follow minimum standards of care when they participate in Medicaid and Medicare programs. Federal regulations require that they "provide the necessary care and services to attain or maintain the highest practicable physical, mental and psychosocial well-being" of their residents. That includes maintaining proper hydration – something Patricia Olthoff-Blank's mother certainly did not get. After Virginia Olthoff's death and that of another resident of the same nursing home, CMS fined the facility $77,462, and the families sued. But federal action against nursing home neglect is frequently insufficient, and too many nursing homes are allowed to function while perennially falling below minimum standards and then bouncing back up. "There's a segment of the industry that has what we call 'yo-yo compliance,' because they're constantly coming in and out of compliance," and rotating through various deficiencies, said Lori Smetanka, executive director of the National Consumer Voice for Quality Long-Term Care. "And they're just not held accountable." "We see continued and routine noncompliance" with laws and regulations, said Eric Carlson, directing attorney with Justice in Aging, a nonprofit that fights against poverty among older Americans. "There are facilities that have business practices that are inconsistent with the law – for example, they treat Medicaid patients more poorly, and there's a federal statute that says you can't discriminate based on reimbursement source." Too often, he said, CMS "does not recognize the violation, or if it does recognize it, it doesn't impose a penalty." 5. Aging Buildings The physical environment of nursing homes has become another source of problems. Traditional nursing homes built 30, 40 or 50 years ago were often modeled on hospitals, with long hallways and small, shared rooms. "There's a warehouse mentality that's communicated by that kind of floor plan and architecture," Carlson said. "For most people, our lives are not organized around our beds… we don't sleep three-feet away from strangers." The Green House model of nursing care and others like it, in contrast, consists of small-scale, home-like units limited to groups of 10 to 12 older adults, each with their own private room. These models often operate with a "more enlightened" staffing arrangement, with nurse aides working consistently with the same residents, Carlson said. 'We're Going to Change Your Culture for You' Mickens, the Texas ombudsman, said one ongoing challenge in nursing homes is a lack of acknowledgment that residents have rights. "They have a voice, and their voice and their preferences may be contrary to what the nursing home staff, to include the doctor, is wanting for them," she said. Even if it's something as simple as getting a shower at night instead of 6 in the morning, the nursing home must strive to include that preference in the resident's care plan.   Carlson agreed. He assembled a list, available through Justice in Aging, called 25 Common Nursing Home Problems and How to Resolve Them. In addition to enforcement, everyone involved in the system – from hospital discharge planners to staff to family members to the residents themselves – must have higher standards, Carlson said. That's the idea behind the guide, he said. If a facility says it is not going to honor a request "because it's going to be too much of a hassle," Carlson noted, the consumer can say, "No. Unacceptable." It will take a culture change, he said. And if the facilities don't do it themselves, he added, consumers must say, "We're going to change your culture for you. Because what you're doing right now is not good enough." https://www.nextavenue.org/nursing-home-vulnerabilities-2/?