Nursing homes: Get the corporations out of health care.

by Richard Mellor
Afscme Local 444, retired

The glorifying of Margaret Thatcher by the British ruling class and the vilification of her and her policies by British workers reveals the chasm that separates workers from bosses.  We are not on the same team despite all the propaganda to the contrary.  The British bourgeois are obligated to place one of their own on a pedestal and in an affront to us all, use taxpayer money to do it.  The queen of privatization gets a publicly funded going away party.

No champion of public services would receive such praise today.  The British National Health system is under ferocious attack in order to send it down the same privatization path as the housing, water, gas and transport industries that Thatcher’s and after, New Labor’s policies removed from the public domain.

Here in the US the propaganda against anything public is pervasive. In the mass media on television every minute of every day the market is put forward as the answer to all things despite the most powerful capitalist economy in the world being dragged from the edge of the abyss through a massive bailout by the taxpayers. The postal service, transportation, water, education and social security are all in the sights of the coupon clippers, the private equity lords, the hedge fund managers---------all those who brought us the Great Recession.

The most glaring failure of all is perhaps the health care system.  It is one of the most costly of all the advanced capitalist economies at about 18% of GDP and returns the least bang for the buck. Despite being privately run for the most part, Federal, state and local governments are projected to spend $2.4 trillion on health care in 2021, according to Bloomberg Business Week. This is half of all U.S. medical expenditures.  “Government accounted for about 46 percent of health spending through 2013.” BW adds. 

The private sector does very well out of the sickness industrial complex including many “libertarian” medical practitioners I’m sure. It is a very profitable business, for those who invest in it but not for the most vulnerable of us when we need it most; for those who need care in their later years.  

As Americans live longer the need for nursing home care grows.  By 2030, 73 million Americans will be 65 or over according US government estimates, up from 40 million in 2010.  There is already a Labor shortage in this industry as taking care of sick people, cleaning, comforting, moving them, emptying their diapers etc. does not warrant much respect like gambling on the price of pork bellies or mortgage rates.  Being a nurses’ aide is very hard, mentally and physically and the pay poor.  The Wall Street Journal today estimates, that five million “direct care” workers will be needed to meet demand, an increase in 48% from 2010.

While conditions in the entire industry need to improve, both workers and patients in the private nursing home facilities are among the most abused in any industry. The rate of occupational injury for nurse’s aides, who are mostly women, is higher than construction or factory work says the Journal. This also leads to a high turnover rate that is detrimental to the patients as well.  People with dementia can be extremely aggressive and workers can be punched, kicked, spat on and abused in all sorts of ways.  It is a great public service these workers provide and they are often the person closest to the patient who may rarely or sometimes never see a relative.  The pay is normally under $12 an hour and as a nurses’ aide at Harden’s nursing homes in Texas you can earn $8.25 an hour, a

whopping $1 above the minimum wage.

In 2011 the Government Accountability Office undertook an analysis of the country’s ten largest for-profit nursing home chains.  When compared to others, these top ten for-profit chains had:

• The lowest staffing levels;
• The highest number of deficiencies identified by public regulatory agencies; and
• The highest number of deficiencies causing harm or jeopardy to residents

The Government Accountability Office (GAO) reported in 2011 that nursing facilities acquired between 2004 and 2007 by the top ten private equity firms:

• Had more total deficiencies than not-for-profit facilities;
• Reported lower total nurse staffing ratios; and
• Showed capital-related cost increases and higher profit margins, compared to other facilities. http://www.medicareadvocacy.org/2012/03/15/non-profit-vs-for-profit-nursing-homes-is-there-a-difference-in-care/

Higher profit margins are the key. If a “chain” of supermarkets or a “chain” of movie theaters must make profits, surely a “chain” of medical facilities for the elderly must. The term “chain” should be enough to put an end to such an arrangement; it’s as bad as the tem “flipping” the coupon clippers invented for trading in human shelter.  We are all witnessing what the market does to an industry when profits need boosting.  Who knows how many people die, how pervasive the suffering of these older people, especially when there are no living relatives and the taxpayer is paying the bills.  We don’t have to look much further than the aftermath of Katrina or other disasters to see how voraciously the entrepreneur, the private sector, dips their snouts in to the public trough.  Hedge funds and other Wall Street firms have bought thousands of these facilities over the years looking to make a buck.

A case in point is Habana Health Care; a Florida nursing home bought by a group of investment firms.

Habana Health Care Center, a 150-bed nursing home in Tampa, Fla., was struggling when a group of large private investment firms purchased it and 48 other nursing homes in 2002.

The facility’s managers quickly cut costs. Within months, the number of clinical registered nurses at the home was half what it had been a year earlier, records collected by the Centers for Medicare and Medicaid Services indicate. Budgets for nursing supplies, resident activities and other services also fell, according to Florida’s Agency for Health Care Administration.

The investors and operators were soon earning millions of dollars a year from their 49 homes. 

Residents fared less well. Over three years, 15 at Habana died from what their families contend was negligent care in lawsuits filed in state court. Regulators repeatedly warned the home that staff levels were below mandatory minimums. When regulators visited, they found malfunctioning fire doors, unhygienic kitchens and a resident using a leg brace that was broken.“They’ve created a hellhole,” one woman whose mother died after a huge bedsore became infected by feces told the Times.  The New York Times:.

This woman and others sued Habana but suing these characters is much like the experience small farmers (those that haven’t been driven from their land yet) are having with Monsanto.* They have the money, you don’t, and in our system, money trumps morality or the righteous. It certainly trumps the views of a worker.  Nurse’s aides say that they have more residents to care for than they can handle.  This contributes to poor service. Of course the worker gets blamed for that, as their opinions are irrelevant.  The statement by a representative from the industry association carries much more weight and he says it’s “difficult” to determine whether inadequate staffing leads to a higher injury rate or poor care.

As for suing them, the NYT article also points out:

“But private investment companies have made it very difficult for plaintiffs to succeed in court and for regulators to levy chainwide fines by creating complex corporate structures that obscure who controls their nursing homes.”

“By contrast, publicly owned nursing home chains are essentially required to disclose who controls their facilities in securities filings and other regulatory documents.”

Disclosing ownership. That’s one thing investors don’t like to do and one of the many reasons public ownership is opposed.

Lew Little, the CEO of the aforementioned Harden Healthcare in Texas is very sympathetic say I sarcastically.  He tells the WSJ that, "These people are the actual backbone of nursing-home care.”  How nice of him, unfortunately though there’s nothing he can do, "We'd love to be in a position to increase aides' pay,..” he tells the Journal, but sees, "no clear path" for raising wages due to cuts in Medicaid and Medicare. He omits what might block that path and that is corporate profits.  It fact, it appears profits don’t exist; he just left them out. Little is the 2013 Chair of the Greater Austin Chamber of Commerce and former president of Bank of America in Austin, just the man to supervise the care of older sick people. 

Another Harden VP is Chris Roussos who previously held management positions with King Pharmaceuticals and Élan Pharmaceuticals. These people are not who you want to manage the care of our sick and elderly unless they do so under the direction of a publicly controlled agency where their skills can be directed toward patient care as opposed to profit making.

In 1987, the US Congress enacted the Nursing Home Reform Act.  Unfortunately, “Congress has also been preoccupied with limiting expenditures. It has never appropriated sufficient funds to enforce the provisions of the Act or funded the personnel and training necessary to inspect nursing homes frequently and intensively.” Says Americans For Democratic Action.

Well this comes as no surprise. The problem is that Congress has been “preoccupied” all right; preoccupied with “appropriating sufficient funds” required for costly wars around the world on behalf of US corporations.  Preoccupied with bailing out bankers, hedge fund managers and other coupon clippers whose activities are a drain on society. Preoccupied with protecting the rights of those who own capital as opposed to those whose Labor creates it.

The market is not a friendly beast and capitalism is not a friendly system of production. This relatively small example of its inefficiency in relation to the global crisis of capitalism cannot be remedied permanently within the capitalist system.  The health of the members of society cannot be left in the hands of bankers and investors; it cannot be a business because for business profit comes first, and in the health care business, it comes before the health of the client.

As a socialist I see the only way to solve this is for the sickness industrial complex to be taken under public ownership and control. Those that use it and work in it from the surgeon to the orderly; the sick and the community whose members it serves both nationally and locally should govern it.  That would mean the pharmaceutical and all industries connected to medicine and its distribution including research and development. The money is there; it is simply misallocated which also means that the financial institutions and the allocation of capital has to become a collective process based on need not for profit.

In the immediate term, health care should be a public service available on demand for whoever needs it.  We need a national health care system in the US. In addition, we must raise the minimum wage to $20 an hour. 

Most nurses aides I’m sure want to do a good job, want to ensure their patients are treated well, but there is a limit to this. In a publicly managed and run nursing home system nurses aides could receive better training, work shorter hours, especially important due to the nature of the work, and the industry can be more transparent. Most importantly, our fathers, mothers, grandparents would be able to receive the care they deserve toward the end of their lives; they’ve earned it.

Let’s get the coupon clippers and big business out of health care.

* See the movie, Food Inc.