For-profit nursing homes account for rise in abuse, neglect, waste, fraud

A rise in the number of nursing homes operating as for-profit corporations has translated into record cases of abuse and neglect, fraud, and wasteful healthcare spending at these facilities.

According to a Bloomberg News investigation, “the profit motive is having an outsize affect on quality of care. Thirty percent of of claims sampled from for-profit homes were deemed improper, compared to just 12 percent from non-profits.”

Two years ago, the investigation notes, 70 percent of the thousands of nursing homes operating in the U.S. were run by for-profit corporations with a bent on making money over providing adequate or even standard care to those who’ve been relegated to living in nursing homes for a variety of reasons. Further, 78 percent of the $105 billion generated by nursing homes in revenue in 2010 was collected by a for-profit company operating one of these facilities. That represents a six-percent rise over the last available statistic in 2002, Bloomberg notes. 

The waste, fraud, and wanton respect of federal and state laws has not gone entirely unnoticed, the investigation also notes. Between just 2008 and last year, the federal government has prosecuted more than 120 civil and criminal matters involving nursing homes and assisted living facilities. That figure is double the volume of the previous five years.

We’ve documented over that same period the individual instances of nursing home fraud and abuse that’s occurred in the U.S., including data from studies that had a similar goal as this investigation. In addition to the filing of false claims – either for treatments not delivered but billed to the government or for unnecessary but expensive treatments that are also covered by insurances or Medicare – there is also rampant abuse and neglect occurring at nursing homes that are operating on a profit-first basis, though these problems are not exclusive to these facilities, certainly.

One of the biggest perpetrators of this abuse, waste, and fraud is California-based Skilled Healthcare Group. The company is in charge of an astounding 75 percent of all U.S. for-profit nursing homes and in the Fall of 2012 it was charged in a California court with 11 separate counts of elder abuse filed on behalf of residents at just one of its facilities in Eureka, Calif. The same company also recently settled six counts of wrongful death filed on behalf of residents who lived in the company’s Humboldt County, Calif., nursing homes between 2005 and 2012.

As healthcare costs rise, the access to quality care diminishes for many Americans. This is especially evident at nursing homes who are strapped with tight budgets and forced to make questionable and sometimes dangerous decisions that put their residents’ lives at risk or at least make them more vulnerable to abuse or neglect caused by sub-standard care.

At for-profit nursing homes, the ultimate goal is to make money so inherently, all decisions made are financially-based first. And the trend in healthcare is to have for-profits providing the care when a non-profit previously had. Bloomberg noted in its investigation – conducted via a Freedom of Information Act request of the U.S. Department of Health and Human Services – that for-profit healthcare is dominating the market, everywhere except hospitals:

“For-profits operate 96 percent of the nation’s outpatient surgery centers, a sector that has grown by more than a third since 2004, according to Medpac. The number of for-profit hospices grew 10 times faster than non-profits from 2004 through 2009, and now exceed half the U.S. total. For-profits operate 84 percent of home-health care agencies and 85 percent of dialysis clinics for kidney patients.”

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