It doesn't require a doctorate in metaphysics to see what has been happening in aged care and to understand why the system is broken.  The problem in providing care using a market mechanism is global.

Many of the events described here have since been added to other pages to illustrate the processes at work - but there are some additional quotes and information on this page.

The consequences are revealed in the multitude of press reports not only in Australia but globally. Apart from the pressures the system puts on care, there are periodic marketplace collapses. Those who are not sufficiently efficient at making money go under. That is how the market works. Once again, it is the consumers who bear the brunt of it.

This page gives more information about the USA and the UK. That seems to be the direction we are heading and that is what we need to take note of and try to prevent.

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Nursing home failures in Australia

Failures in care: The marketplace consolidation and the pressures in our marketplace have not yet reached the sort of intensity that have resulted in so many problems in the USA and the UK. We have not gone as far down that path but there is more than enough to indicate that we are now heading down the same path.  

On the web page 19 years of care I have described what has been happening in aged care here. In addition in the web page Further reading in Part 4 of my contribution to the Aged Care Crisis website, there are a large number of references and links to material from Australia.

Bankruptcies: Several smaller nursing home groups in Australia have failed. Usually standards of care collapse, harming residents, then staff and bills are not paid and finally somebody closes the company down. Families have told of the stresses and upset when the elderly, near the end of their lives, are forced out of what has become their home. They suddenly have to find another facility, probably far from friends and family - and the large bonds that they paid the failed provider, and now need, have evaporated.

Many will have died by the time they get any of their money back from the taxpayer funded system that props up providers.

How many of us would like to spend the last months of our lives caught up in something like this? I have never heard of a prospectus or financial report that mentioned the risks to those the market is charged to care for.

So far we have been spared the large company bankruptcies that have occurred in the UK and which have been avoided by not presecuting fraud aggressively in the USA.

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Aged Care Failure in the UK

As indicated on earlier pages, private equity firm Blackstone purchased Britain's largest aged care chain Southern Cross and restructured it to meet its short-term profit objectives. But Blackstone is alleged to have stripped Southern Cross of assets and left it tied into long term lease contracts that enabled Blackstone to take a huge profit when it was floated on the share market.

This rendered Southern Cross financially vulnerable to changes in the market. It was soon in trouble and tied into paying those leases, which were driving it into bankruptcy. It was unable to find a way out and Southern Cross went bankrupt.  The residents who had no role in all this, were trapped in the mess. The financial problems impacted their care. By then, Blackstone had taken its profit and run. Information is here.

On the web page International Aged Care in Part 4 of my contribution to the Aged Care Crisis web site I document some of the multiple problems and failures in the UK over recent years and in particular the loss of credibility and scorn thrown on the Care Quality Commission, an organisation that actually collects more information than we do in Australia and makes it available in a more transparent way.  There are two reasons for it. Firstly, that this sort of oversight is fatally flawed and is of little utility, and secondly because there are two other activities that are putting pressure on care so more homes are failing the residents.  

  1. The first of these is a government driving the process with market forces and trying to save money and force efficiency by cutting funding.
  2. The second of these is the major role that private equity has played in the sector. I described some of this on the Private Equity page where there is more information about the UK.

This section expands on what I said earlier.

Blackstone managed to extricate itself from Southern Cross and take its huge profits, but it left chaos behind it. There has not been enough money to maintain the nursing homes or to care for the residents. It is currently in administration for the second time. 

In the case of Four Seasons, the private equity group Terra Firma, bought the company but failed to get out in time. Profits are falling and Terra Firma is scrambling to cut costs in order to keep those profits up and somehow get out without losing too much money. It is the poor residents in these unmaintained and poorly staffed nursing homes that are bearing the brunt of all this. 

The private equity partners, managers and investors will only lose money - but they knew this when they took the increased risk of investing in private equity. 

The poor residents who are suffering the consequences, were not asked if they were prepared to accept the risks before they were sold off to Blackstone and Terra Firma.

Below are some more quotes illustrating the intense debate that the UK have been having about this. 

Politicians have called for care home owners to face a fit and proper persons test and submit their business plans for scrutiny to avoid a second Southern Cross-style collapse.

Labour MP John Spellar said: "The problem with private equity firms is, unlike pension funds, they are usually not in it for the long haul. They want to be in, make a quick profit, and get out. That's what bedevilled Southern Cross with a business model that was fatally flawed. I'd be very concerned if we ended with a similar business model with Four Seasons."

Conservative MP Dr Sarah Wollaston said a review of care home regulation was desperately needed. "I'd support a fit and proper persons test for care home ownership. I think that's only right because you can't have somebody with a poor track record involved."

Labour MP John Healey, who was shadow health minister when Southern Cross went bust, warned: "The government has failed to act on the lessons of the Southern Cross collapse and I think there is a strong case for regulating for good care standards and good business standards.

"I think there's certainly a case for a fit and proper persons test."

He added: "Care for some of the most vulnerable in our society was traded by predatory fund managers who saw elderly people as commodities."

Source: Terra Firma care homes takeover triggers MPs' calls for tighter regulation  The Guardian, 6 May 2012

Thousands of elderly Britons face a risky future after it emerged the UK’s biggest care home operators have racked up debts of £5 billion.

The size of the staggering loans, along with revelations many are linked to offshore firms based as far away as the Cayman Islands, have emerged as part of an investigation into the sector.

Source: Big care home operators have £5bn in debts leaving thousands of pensioners at risk Daily Mail 6 Nov 2012

Care and Support Minister Norman Lamb will today launch a consultation into proposed measures which would protect residents if care providers fail, saying the current regulatory system was not yet "fit for purpose".

Under the proposals, a regulator would monitor the financial health of the largest providers.

The abrupt collapse of Southern Cross, Britain's biggest care homes operator, caused turmoil for more than 30,000 elderly and vulnerable people last year.

"Southern Cross demonstrated that we need greater oversight of providers' finances and better plans to support people if their independent provider goes out of business.

"We want to make sure care providers have plans in place to get their finances back on track and if this is not possible then a co-ordinated exit from the market happens. This will mean care service users know their needs will continue to be met.

Dr Peter Carter, chief executive and general secretary of the Royal College of Nursing, said: "For some time we have been concerned about the ability of providers to deliver high quality care and run on a sound financial footing.

"When a patient or service user is moved from one care setting to another due to providers failing, it can have catastrophic effects on their mental and physical health.

Mr Lamb said he had been looking at regulation of the care sector in light of the abuse of vulnerable patients uncovered at private hospital Winterbourne View near Bristol.

He told BBC Radio 4's Today programme: "I think there is a significant lack of corporate accountability for the quality of care that is provided in care homes and in private hospitals and that is something I am determined to address.

"I have been looking at that in terms of the Government's response to the horrors of Winterbourne View and I just have a sense that the whole regulatory model for the care sector is not actually yet fit for purpose and there are reforms that are necessary."

"However, the underlying challenge facing the Government is to tackle the crisis in social care funding. There have been financial pressures for many years, but the Government's cuts are now driving care services to breaking point."

Source: Care home companies could be forced to open books to prevent another 'Southern Cross' collapse - The Independent, 1 Dec 2012

In 2016 Four Seasons is still there but its position becomes ever more precarious.  The wolves are circling.

US hedge fund buys up Four Seasons' debt with hopes of taking control of some properties, according to reports

The UK's largest care home provider is considering selling scores of its properties as it plans to trim its budget.

Source: Four Seasons considers selling off care homes amid 'cash crunch' The Telegraph 4 June 2016

Probity and the proposed hub: It is interesting that the UK is calling for a probity (fit and proper person) test to be applied to aged care.  At one time Australia's independent probity review process was a critically important hurdle for providers planning to enter aged care.  The department boasted of its rigour. The Howard government saw it as an obstruction to legitimate business and abolished it in 1997. 

While a probity provision would not need to be legislated the proposed community aged care hub would in effect be assessing the probity of anyone wanting to buy or build a nursing home because it would have the final say in who operated in their region.  That is what would make this market work and ensure that only suitable people (and corporations) operated in the sector in Australia.

A reminder of just how bad it can get

The primary parties responsible for the debacle in the UK have been the private equity groups. But other aged care corporations including one of its biggest INTFPCompanyB have also been in the firing line. INTFPCompanyB is the largest for-profit owner of nursing homes in Australia

The Panorama program in April 2014 gave more information about failures in aged care in the UK including by facilities owned by UK based multinational INTFPCompanyB.  Buzzfeed reported on this.

Tonight’s Panorama on BBC1 - - (undercover filming) - - will show

  • A woman with dementia who was left partially paralysed after a stroke was slapped by a care worker who had previously been complained about for her poor attitude toward residents.
  • The same resident was also repeatedly mocked, taunted, and bullied by other care workers.
  • Cries for assistance from a resident suffering a terminal illness were ignored as she sought help to go to the toilet, and her call bell was left unplugged on one occasion.
  • A bed-ridden resident with a chronic illness was left lying in his own excrement for an hour after two care workers turned off his call bell without assisting him.
  • A man in his eighties was repeatedly mockingly called a “bitch” by a care worker, after he called her a “bitch” when he became agitated because of how she was cleaning his private parts.

In its press release, the BBC says: “Most of the whistle-blowers who raised concerns in 2012, when Anglia Retirement Homes was owned by a local property developer, were suspended, later leaving or losing their jobs.

Whatever ultimately emerges from the investigation, the truth is that complaints about Britain’s elderly care system have been bubbling under for some time.

Hxxx’s death was needlessly cruel. It was also the tip of the iceberg as far as stories about INTFPCompanyB and its Scottish care homes were concerned.

- - the charity Compassion in Care, in partnership with Private Eye magazine, found that of the chain’s (ie INTFPCompanyB) 30 care homes, there were serious failings at 10, and nine gave cause for concern.

A former worker was jailed in 2010 for dragging an 86-year-old across the floor, leaving her bruised and bleeding.

In one home, Darnley Court, which houses 120 residents in Glasgow, many problems were cited in the Inspectorate’s report, including poor pressure care, nutrition, hydration, medication, and a shortage of properly trained staff. The report found medication was being used as a chemical cosh, and staff were desensitised to the suffering of their charges.

“Rather than properly address Darnley’s serious failings, however, INTFPCompanyB commissioned a glossy in-house “satisfaction” survey so it could claim on its website: ‘Darnley Court provides exceptional care and support for those requiring long or short term care.’”

She (Eileen Chubb from “Compassion in Care”) cites the 2011 collapse of care home provider Southern Cross as an example of this: “I went into 60 of their homes, and could see that the staff had been cut to the bones - - .

Her work is vital. According to last year’s Adult Social Care Survey, one in three adults who are in residential care or receiving help at home fear abuse or physical harm — that’s about half a million people.

Source: This Is The Shocking Face Of Abuse In Britain’s Elderly Care System Buzzfeed 30 Apr 2014

There were some clips from the 2014 BBC Documentary on Youtube but it has now been removed.

In February 2015, nearly a year later the BBC reported on the number of complaints made and the unhappiness of the public with the care provided in the UK. Only 74 of the 152 councils cooperated in disclosing details about complaints to the BBC so it is likely that the actual figure is more than double

Some 14,888 claims about the welfare of care home residents aged 65 and over in 2013-14 were reported to 74 councils, 5 live Investigates has found.

Relatives say the system designed to handle such complaints is flawed and they often go unheeded.

The body representing senior social services managers says there needs to be more investment in care staff.

She says she wrote letters raising concerns to health professionals, the Care Quality Commission and the council's safeguarding team but she says no-one saw it as a safeguarding issue.

"I felt I was tearing my hair out and nobody was listening," she said.

"It was only treated as a safeguarding alert after I raised the roof when she went into hospital," she says.

In one case, the ombudsman found a council was at fault after its safeguarding team asked the home at the centre of an allegation of poor care to conduct its own safeguarding investigation.

In other cases the ombudsman found delays in launching safeguarding inquiries, poor investigations and that families had not been given information.

Source: Thousands of complaints made about elderly care in England BBC News, 25 Feb 2015

Another home owned by INTFPCompany B was barred from admitting any further residents due to major concerns about the safety of residents.

One family has called on Hillview Nursing Home in Eston, Middlesbrough, to be closed altogether following two recent Care Quality Commission (CQC) inspection reports resulted in warning notices being imposed on the home for breach of regulations in medicine and record management.

The problems at Hillview came to light after The Northern Echo ran a report about former resident Axxx Sxxx, 77, who had to be "blue lighted" by ambulance to hospital with severe dehydration, blood poisoning and raging temperature.

Source: Middlesbrough nursing home told it cannot admit new residents after inspectors serve warning notices demanding improvements The Northern Echo 9 Feb 2015

Pressing for CCTV

Standards of care in the UK are steadily deteriorating. A law firm has launched an on line petition asking for compulsory CCTV in nursing homes. If it gets enough signatures it can force parliament to consider the petition.

The firm’s Love Our Vulnerable and Elderly (LOVE) campaign is aiming to make CCTV compulsory, as believes it can help ensure the elderly and vulnerable are protected, respected, loved and given their dignity when in care.

“There has been a sharp increase in the number of care home abuse and neglect cases which have come to us over the past 18 months,” said Ms Daly.

- - - families raising concerns about the treatment of their loved ones, not getting satisfactory responses, and then uncovering poor, sometimes shocking treatment themselves when carrying out their own filming or recording.

Source: Legal firm calls for compulsory CCTV in care homes to prevent abusive and neglectful care of the elderly Legal Futures 3 Feb 2016

And in home care:

Time after time I was meeting old people who felt let down, vulnerable and lonely. People who were leading their twilight years full of worry and waste after leading full and happy young lives.

 - - warning about impending doom; the local authorities who pay for it, the regulators who monitor it and the workers who rush around administering it, are all warning of a crisis as the system buckles under the pressure of rising costs, reduced budgets and increasing demand.

As the CEO of one of the UK’s leading charities for the elderly told me: “If the politicians were all 20 years older they would certainly think about it more and do something about it faster.”

Source: Growing Old: Care in Crisis? - ITV News, 7 Oct 2015

The ongoing failure of home care workers to show any compassion and provide reasonable care is described in a 2016 article using an example they claim is representative.  The whole article is revealing.

Now she can’t leave her bed, or wash, or eat, or stagger to the chair, unless someone helps her. Which, as is made clear by the secret cameras that Ray agrees to install in her house, they don’t an awful lot of the time.

Source: We hear a lot about compassion for the elderly. Isn’t it time we showed some? The Guardian 6 April 2016

At least one politician is listening and trying to do something about the situation.

He (family member) doggedly pursued all the avenues open to him to investigate his mother’s case. Invariably, he hit a brick wall. This led to serious concerns about the whole system of regulation in the care home sector – concerns he shared with me at our first meeting and at many more since then. His story was the starting point of a campaign to radically reshape the way we regulate, inspect and investigate care homes, and it led to my parliamentary debate last Wednesday. Six years on, I wasn’t seeking to re-open his specific case, as tragic as it is, nor to criticise the care home concerned. This is about the future, and about the entire system.

At the moment I believe we are letting people down. Those people are the ones least able to speak up for themselves. They are the estimated 300,000 older people currently living in around 17,000 registered care homes.

Source: Something 'must be done now' to improve elderly care Western Morning News 8 November 2015

A good in depth article which looks at the how and why of aged care problems in the UK is on an advocacy web site.

Problems in Ireland

Many UK companies operate in Ireland and its aged care system also has problems. A journal in Ireland obtained information about problems under FOI. It revealed what was happening in nursing homes there

Residents in a nursing home suffered physical and emotional abuse at the hands of their carers and were refused showers and left short of food, according to claims in newly released documents.

The complainant said that residents at the home were refused water due to the risk of them getting wet; that they were left short of food because the staff ate it; and that the staff were negligent and inattentive.

One heavily redacted complaint alleges sexual assault by members of staff at a nursing home. Who is assaulted or what took place is not clear.

While some of these complaints point to alleged cases of extreme abuse – the most common concerns lodged are to do with nursing homes being understaffed.

Source: Nursing home residents abused and 'left short of food as staff ate it' 11 April 2016

A cause of the problems

A 2013 report looked at what current policies might be doing to the National Health System (NHS) in the UK by examining why social care in the UK had become so dysfunctional..

What explains the emergence of this dysfunctional system? A report by the Centre for Health and the Public Interest, ‘The future of the NHS? Lessons from the market in social care in England’ finds that the best available explanation is the introduction of competitive markets in care services in the 1990s, which were then used by successive governments to keep the costs of state funded social care down as low as possible.

Source: Who cares? Market forces, social care and the NHS Our NHS 2 December 2013

Only 3 years later the Quality Care Commission found that four in five NHS hospitals were no longer safe

The regulator said “the public is being failed” by the numerous hospitals, care homes, and doctors surgeries unable to meet basic standards, in a report which vows to call time on an “unacceptable lottery” in care.

Inspections of 82 hospitals found 65 were inadequate or required improvement, when it came to safety.

Source: Care Quality Commission: 'Four in five NHS hospitals not safe' The Telegraph 4 June 2016

Review of social care - Update October 2016

The King's Fund is an independent charity working to improve health and care in England. It helps to shape policy and practice through research and analysis. It has recently released a report describing its analysis of social care.

The UK has been down the path that Australia is following and is confronted by the consequences, consequences that the UK government is, like our own, still trying to ignore.

The King’s Fund analysis of the situation in the UK paints a gloomy picture. It shows that the system is "struggling to meet the needs of older people. Six consecutive years of cuts to local authority budgets have seen 26 per cent fewer people get help". This has put "many social care providers under unprecedented pressure".  "Home care services face particularly acute workforce shortages and are now in a critical condition everywhere". The "possibility of large-scale provider failures is no longer of question of ‘if ’ but ‘when’ - - ". The basic principle of equity is being lost and "Access to care depends increasingly on what people can afford – and where they live - rather than what they need". The measures announced by government will not meet a widening gap.

The focus is on finance and the inability or unwillingness of government to fund the system they created. No one is looking at the possibility that the manner in which the UK like the USA and Australia have decided to structure their systems is flawed - the possibility or even probability that services provided by and controlled by the community, not only provide superior care but without the costly overheads of the market. They can draw on human resources and human attributes that are not available to either the market or government.

The overheads and multiple demands that the market places on funds are reduced. The bureaucratic process and complex costly systems that characterise government services can be avoided. As in Australia policies have been based on ideology and been introduced as "reforms". The data needed to trial and evaluate different options as they were introduced was not available. The use of the word "reform" has been used in order to avoid using logic and evidence.

Relevance for Australia

Community Care Review published an article looking at this report quoting that “No one has a full picture of what has happened to older people who are no longer entitled to publicly funded care: the human and financial costs to them and those who care for them are mounting,”

A senior Australian financial adviser idicated that the report “detailed the negative impacts of post-GFC economic austerity measures across the UK social services sector”. “He said Australia had to grapple with the lessons from the UK on how to best respond when social care systems have to operate in times of economic hardship”

As I indicated elsewhere the market is a high risk strategy for providing care because market entities are so vulnerable to an economic down turn. Interest driven providers will get out as best they can when it is no longer profitable. In contrast the community and community based organisations are there for the community and no one else.  When times are tough they can draw on the services and humanitarian motivations of the community, a resource not available to markets. Doing so brings community together in a shared community endeavour. This creates social capital and builds civil society. These resources are not available to the market.  Hopefully we will not have to wait for a global crisis and economic recession to induce us to rebuild civil society and restore the balance between markets, politicians and civil society that make capitalist democracy so successful for citizens.

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Nursing home disasters in the USA

The way this market can go awry, and the most frightening examples, come from the USA in the 1990s. The massive fortunes made and meteoric growth of the most successful nursing homes during the early 1990's were based on exploiting a loophole in the regulations. Nursing home owners could charge for vast amounts of step down care given in their nursing homes, for which hospitals had already been paid. Hospitals simply transferred the patients to nursing homes and pocketed the money. Nursing homes overserviced and provided as much 'step down' rehabilitation 'therapy' as they liked and charged the US government's Medicare system.

When government stepped in to close the loophole in 1997, and started prosecuting the massive fraud, the income streams collapsed and repayment on loans could not be met. Several of the largest corporate chains entered Chapter 11 bankruptcy protection. Governments across the country were faced with falling standards of care and the prospect of having to take care of thousands of frail elderly if the companies failed to trade out of bankruptcy. As is happening in Australia now, US states had sold off any aged care facilities they possessed and no longer had the skills or resources to take over if the companies went into liquidation.

To trade out of bankruptcy, these US companies had to make savings and the only way to do this was to cut costs and that meant the cost of care. State authorities became alarmed and warned the federal government, but they were forced to turn a relatively blind eye to what was happening to the elderly residents, or else the responsibility for providing care would have landed in their laps.

Company problems were compounded when relatives banded together to support each other in several states. They ran individual lawsuits for damages. Disgusted staff assisted the residents by providing documents and giving evidence. Angry juries awarded massive punitive damages, the largest of $20 million against Extendicare, a big Canadian company operating in the USA. Insurers paid causing premiums for all nursing homes in the USA to rise rapidly. Several companies vacated those US states where damages were not capped and juries could award the sort of punitive damages that matched the conduct.

Several very large whistleblower-initiated fraud investigations were also underway but most were not prosecuted as there was no money to recover. Those that were prosecuted paid token payments in settlement.

There is an in depth review of what happened on a web page called Overview of Corporate Nursing Home Care. At the foot of that page are links to additional pages containing representative extracts from a large volume of material published between 1996 and 2003

The story of Extendicare and several other US chains are told on these links. Vencor, Sun Healthcare, Integrated Health Services, and Mariner. They are good examples of what happened and how the trade in decrepitude can go horribly wrong.

In Australia, our government operates under the illusion that owners, like these chains, have no impact on care. 'Owners' are never investigated, criticised or prosecuted - only the individual nursing homes. We are not even told who the owners are.

While US shareholders and banks, who all lost their investments, suffered financially, the real victims were the nursing home residents who through no fault of their own were trapped in this debacle, and whose care suffered. In this US market, as in that in the UK and Australia, they had no choice.

But the US market was innovative. Enthusiastic players, including 'turn around' specialists positioned themselves to take advantage of the opportunities presented by the way the game had suddenly changed. The noise and excitement they generated, as they seized the new opportunities, drowned the complaints of the victims!

Lawsuits and penalties alone do not change culture - the way the companies, who have to perform to succeed, think and operate. They can always find ways of justifying their conduct. In spite of numerous lawsuits similar problems persist in the USA more than 10 years later. Re-offenders include Extendicare, which has just paid the "largest settlement in the justice department's history". Large legal firms like this one specialise in Elder Abuse and try to help the thousands who are abused each year, often in nursing homes.

A nursing home chain has agreed to pay $38 million to resolve allegations that it billed Medicare and Medicaid for substandard care at nearly three dozen facilities around the country, the Justice Department said Friday. A federal investigation into Extendicare Health Services Inc. accused the company of failing to provide appropriate care, follow safety protocols or maintain enough skilled nurses. Those lapses in some cases resulted in head injuries to residents, falls, bed sores and fractures and cases of malnutrition, dehydration and infection, the government said

Source: Nursing home chain agrees to pay $38M to settle government poor care claims Associated Press, News Medical, 10 Oct 2014

During the time that I studied nursing homes in the USA, several state newspapers did some research and then published a series of articles describing what was happening, both the failures in care and the attempts to do well in spite of the system.

One of the earlier analyses was was Money or mercy? in The Tampa Tribune in Florida, November 15, 1998. This was one of the earlier reports documenting that it had “found that residents of for-profit homes had higher than average rates of reported neglect and abuse”.

The St. Louis Post-Dispatch in Missouri ran a series of 17 articles on aged care over a 1 week period in 2002:

"The families were being told by the nursing homes that their loved ones died of heart attacks, strokes and other natural causes, but what we actually found was that about a third were wrongful and preventable deaths, either caused by or exacerbated by dehydration, malnutrition, including choking, or from sepsis from bedsores," said Malcolm, who was just appointed to the U.S. Department of Justice's newly formed forensic working group.

Source: Nation's nursing homes are quietly killing thousands ST. LOUIS POST-DISPATCH 12 Oct 2002

They died painful, preventable deaths and left behind families tormented by their loss.

They are victims of poor care in nursing homes, a cross section cut from the fabric of America - mothers and fathers, war heroes and homemakers, black and white.

Four of these families sought justice in courts of law and received cash settlements from nursing homes. The settlements required that the names of the homes and the amounts of money paid be kept secret. So, those homes are not identified on this page. In the fifth case, criminal charges are pending.

Despite the settlements, family members say, the tragedies took an emotional toll that can't be soothed by dollars.

Source: Survivors of lost loved ones tell stories of broken trust ST. LOUIS POST-DISPATCH 12 Oct 2002

A panel of academic researchers supported by the government recommended in 2000 that nursing home residents get 4.5 hours of direct nursing care daily. Last year, the Centers for Medicare & Medicaid Services, the division of the Department of Health and Human Services that provides two-thirds of the money to nursing homes, reported that facilities with staffing below 4.1 hours per resident per day may provide a level of care that results in harm and jeopardy to the residents.

Source: Woefully inadequate staffing is at the root of patient neglect St. Louis Post-Dispatch October 14, 2002

Links to these and the rest of the 17 articles are at this site

The Sacromento Bee in California is another of the newspapers that has tracked aged care and written many articles analysing what was happening.

A three article series describes a detailed analysis of for-profit nursing home chains by The Sacramento Bee in California starting on 8 Nov 2014 shows the wide difference in performance in care provided by different for-profit owners. The impact of pressures for profit on staffing and so care is explained. The USA is still experiencing all the same problems it had in the 1990s, and that we have now. But at least they know it - even though their government is not doing anything about it either.

US investigators can actually measure care and staffing, something that is denied us in Australia where a similar analysis is not possible. In civil cases in the USA, disgusted juries are still awarding massive damages, a recent one of $677 million - but this has been going on for at least 20 years. This is why we need to do something more than penalise.

Reports continue to document the way in which failures in care follow the for-profit sector. Here is a 2016 example.

New York’s nursing homes have received failing grades from watchdog groups for years. Now, recent statistics and reports suggest the state’s nursing homes are getting even worse as for-profit operators gain a larger share of the market and oversight agencies struggle to provide quality control.

Source: As NY shifts to for-profit nursing home, abuse and neglect complaints spike City & State 27 Mar 2016

As in Australia, the market is spending its money on building luxury homes to attract profitable residents, but they are less enthusiastic about spending some of that money in staffing them and providing care.

Even as nursing homes are busily investing in luxury living quarters, however, the quality of care is strikingly uneven. And it is clear that many of the homes are not up to the challenge of providing the intensive medical care that rehabilitation requires. Many are often short on nurses and aides and do not have doctors on staff.

Source: In Race for Medicare Dollars, Nursing Home Care May Lag The New York Times 14 April 2015 (Paywall)

Corporate culture: We need to change the culture in Australia to stop this from happening here. The proposed hub is an attempt to collect the data needed to tell us what is actually happening, to change the culture and to prevent these things from happening. We do not have to follow the USA. We can be different.

Other information: There is more about the US aged care system on the web page International Aged Care in Part 4 of my contribution to the Aged Care Crisis website.  Illustrative examples are included on other pages.

If you have not looked at the confronting video Fault Lines then you can do so here. It analyses the reasons why the US aged care system has failed in some detail.  I did a similar analysis of the failures in US health care in a page Politics, Markets and Democracy that I wrote on my Corporate Medicine web pages in July 2004.

Using the law to correct market failure

In a system where care follows the money and not the needs of community you get some bizarre and inappropriate outcomes. You rely on regulations and the law.  This is not only very expensive but there are long delays when it is used.

In the USA some $250,000 people are needlessly incarcerated in Nursing Homes, often because they don’t have the money or the help needed to enable them to live at home or to enter the workforce. This would cost much less and give them a life.

But under the Americans With Disabilities Act they are entitled to receive care without being segregated from society and this is a state responsibility. Federal Police under the Obama administration have successfully opened "more than 50 such investigations and reached settlements with eight states". Some have been fined.

In a scathing rebuke of the state’s health care system, the Justice Department said on Monday that thousands of patients were being held unnecessarily in sterile, highly restrictive group homes. That is discrimination, it said, making South Dakota the latest target of a federal effort to protect the civil rights of people with disabilities and mental illnesses, outlined in a Supreme Court decision 17 years ago.

The government says that those efforts have allowed more than 53,000 Americans with disabilities to leave institutions or avoid them altogether. It is a small number compared with the 250,000 working-age people who are estimated to be needlessly living in nursing homes, but advocates say the federal campaign has had significant effects.

Yet when patients seek help paying for long-term care, states often steer them toward nursing homes, even though it may not be needed.

Source: South Dakota Wrongly Puts Thousands in Nursing Homes, Government Says New York Times 2 may 2016

Avoiding lawsuits in the USA

The law has been far less successful in protecting the rights of vulnerable people.  Americans see deterrence as the answer to corporate misbehavior and rush to their lawyers, Lawyers like the firm on this YouTube video tell the community what is happening. I have met or been in contact with several of them and they genuinely want to help and hold the corporations to account for what they do. All were very helpful and some gave me crucial documents. Its good business for them but it hasn’t stopped the problems as its still good business.

The nursing homes try to avoid them. Angry juries initially awarded massive punitive damages that were big enough to be a deterrent and judges agreed to them. Provider groups succeeded in reducing the costs for their members by getting state politicians to limit the amount that can be awarded as damages.

Hazards when signing contracts: An interesting development in the USA is the insertion of clauses prohibiting residents from suing and requiring them to agree to arbitration instead. These negotiations are often done under considerable stress and if the prospective residents refused then they might not be accepted in the home. Arbitration was not in the residents best interests because this limited access to important documents and sworn statements depriving families of information they needed to substantiate their complaints - so giving the providers a significant advantage.

Late last year, Judge Jeffrey Sprecher upheld the family’s right to sue, finding the arbitration agreement “unconscionable” because it was presented to Bxxx at emotionally difficult time; consisted of long, confusing passages; improperly portrayed the deal as beneficial to all parties; and included a confidentiality provision that Sprecher said was “designed to bury all proof of bad things that may be alleged to occur in a nursing home.”

The sad reality is that these types of arbitration agreements are fairly common now among nursing homes, and they are often upheld by the courts. Prospective residents, who may be in the midst of a health care crisis, are asked to forfeit their right to sue as a condition of admission.

As Sprecher pointed out, these agreements also attempt to “inject fear in the patient by suggesting that a court action takes so much longer than arbitration, so that unless you select arbitration, the patient may die before his court case could be finished.”

The problem is that through litigation, complainants have the ability to use the discovery process to procure documents that speak to patterns of abuse or neglect. They can also subpoena witnesses for depositions, and secure sworn testimony as to the facts of the case. And all of that is handled through a public proceeding before a judge or a jury of one’s peers.

Many of the arbitration agreements restrict a complainant’s access to records, as well as the number of depositions and witnesses. Some place limits on how much a party can recover in damages.

Source: Editorial: Nursing homes take away right to sue - The Des Moines Register, 19 Aug 2015

A US community group Caring Across Generations has taken up this issue and hopes to stop it.

Lots of nursing homes now force people to sign away their right to a fair hearing in court. Instead, the nursing home will hand-pick a friendly lawyer to hear your complaint. This is totally legal, and it’s called forced arbitration.

Thankfully, the Centers for Medicare and Medicaid Services have proposed changing their rules to tighten restrictions on nursing homes using forced arbitration.

Source: We need to be able to hold abusive nursing homes accountable Caring Across Generations, 2013

It seems that the Centres for Medicare and Medicaid have not come to the party.  There has been no change and most judges have ruled that these unfair and limiting arbitration clauses are legal. Frustrated individuals struggle to find some way around this with occasional success. The New York Times article describes the problem using a case where a women was murdered as an example. It seems that arbitration clauses are very common in many situations in the USA.

It has become a crucial test of a legal strategy to prevent nursing homes across the country from requiring their residents to go to arbitration, where there is no judge or jury and the proceedings are hidden from public scrutiny.

Arbitration clauses have proliferated over the last 10 years as companies have added them to tens of millions of contracts for things as diverse as cellphone service, credit cards and student loans. Nursing homes in particular have embraced the clauses, which are often buried in complex contracts that are difficult to navigate,- - - .

Judges have consistently upheld the clauses, The Times found, regardless of whether the people signing them understood what they were forfeiting.

Source: Pivotal Nursing Home Suit Raises a Simple Question: Who Signed the Contract? New York Times 21 Feb 2016

And in Australia

I am not aware of this happening in Australia anthough there is interest in having an effective arbitration system.  I am aware that at least one group in Australia has been in conflict with unions because the employment contract nurses were required to sign prohibited the nurses from reporting incidents directly to police. This would have enabled the provider to decide whether to report to the police.  They could potentially, carefully plan a cover up before reporting or even conceal the event altogether, although that would be illegal. 

There is a recent example where this was done after a death in an Australian nursing home. The patient was dressed and put back into bed and a doctor induced to sign a death certificate  A nurse who witnessed the cover-up, sacrificed her job by reporting the cover up to police.  They arrived before the nursing home had deleted the damning CCTV footage.

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Retirement Homes in Australia

In the early 2000s some entrepreneurs in Australia dreamed up a way of making a fortune by taking most of the pension from the elderly poor. In return they would feed and house them in basic style retirement facilities, much superior to what many were currently living in. Their financial calculations depended on high occupancy rates. Amidst a great deal of hype, they floated "Village Life" on the share market and built multiple villages.

But they had failed to consider the lifestyles of the population they targeted. It was based on an illusion. The elderly pensioners had other lifestyle priorities for the limited funds they had - cigarettes, a beer or two and a fling on the pokies. It all went pear shaped. Investors lost money, but they could take to the courts and claim something back from those who had sold them a pup. Even the tax man came looking for his share.

The many pensioners who had taken up the offered accommodation became pawns in the game of minimising losses. Banks and others, who as debtors found themselves holding the baby, struggled to get rid of them so that they could do something else with the buildings to limit their losses. After the parcel had been passed several times, the eviction notices finally arrived. The sorry story is here.

Problems in retirement homes are usually financial and disputes about management.  Providers have a big advantage as they write the contracts.  Retirees promised an idyllic retirement can spend tha last 10 to 20 years of their life fighting legal battles in the courts.  On my old corporate medicine web site I use the example of FPCompanyP to illustrate the problems.  It is a company that owned both retirement villages and nursing homes. It does not seem to have been a success story for many residents and retirees.

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