Editorial: Who’s in charge?

Wednesday, Sept. 26, 2007 | 7:20 a.m.

Private investors are buying up the nation's nursing homes, creating complicated corporate structures that often prevent government regulators and patients' families from knowing just who should be held responsible if a patient is injured or dies.

A story by The New York Times on Sunday, which was based on the examination of more than 14,000 nursing homes, about 10 percent of which had been purchased by private investment groups since 2000, says that residents in the homes acquired by private investors generally fared worse than they had under previous owners.

Residents' depression, loss of mobility and the loss of the abilities to dress and bathe themselves increased under the new private ownership arrangements, the Times reports, as did reports of bedsores, preventable infections, inappropriate restraints and even deaths.

One reason for these ghastly deficiencies, experts told the Times, is that new owners trying to turn a profit on previously unprofitable nursing homes typically fire many of the nurses and other specialized staff members. Figures from the federal Centers for Medicare and Medicaid Services show that nursing staffs have been cut to levels below those required by law at 60 percent of the nursing homes purchased by large groups of private investors from 2000 to 2006.

Large private equity groups own six of the nation's 10 largest nursing home chains, or 9 percent of the nation's total nursing homes, the Times reports. These investment groups often spread the ownership of a facility's land, buildings and administrative operations among several owners, making it difficult to nearly impossible to determine which company is responsible for decisions concerning staffing or standards of care.

As a result, when government regulators try to punish errant owners through fines and penalties, the layers of complex corporate ownership agreements often obscure who, exactly, is to be held accountable. Likewise, families whose loved ones have been injured or have died as a result of poor care cannot figure out who is responsible if they want to take legal action.

A principal executive with Formation Properties I, one of the firms that has invested in 49 Florida nursing homes, told the Times that if private investors are prohibited from creating complex corporate ownership structures, the nursing-home industry "makes no economic sense." Until such private interests entered the picture, the executive said, regulatory and legal costs "were killing this industry."

So the alternative is to gut nursing staffs and cut other services that result in killing the patients instead?

The logic is preposterous.

Obviously, current regulatory punishment and private lawsuits cannot provide proper oversight of these facilities. Just as the ownership structure of nursing homes has changed, the manner in which they are monitored also must change.

Nursing-home owners should be clearly and publicly disclosed so that there is no question who is responsible for a home's conditions and patient care. Inspection records also should be cross-referenced against those of nursing homes that are owned by the same corporate interest, in case violations and shoddy care standards have been institutionalized as a way of maintaining a chain's bottom line.

It is simply unconscionable that tens of thousands of our most frail Americans are being injured or neglected by those entrusted with their care. Federal and state lawmakers simply must demand that nursing-home operators be held accountable for ensuring the proper and compassionate care of our aging population.