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Government Led Investigation Shows For Profit Nursing Homes Have Highest Profits, Fewest Staff

An investigation by the Government Accountability Office (GAO) has revealed that for profit nursing homes have the highest profit margins, but the lowest staffing ratios compared to non profit and government run facilities. Nursing homes that are a part of a chain or network of nursing homes are the biggest offenders, with 19% higher profit margins than their counterparts.

Data Collection Made Difficult by Less than Forthcoming Nursing Homes
The largest obstacle that investigators faced was the reliability of data made available to them by the Centers for Medicare & Medicaid Services (CMS). GAO is responsible for ensuring that government agencies are properly functioning within the parameters of the responsibilities and duties entrusted to them. While CMS regulates all Medicare and Medicaid funding, the data given to them by nursing homes is believed to be somewhat unreliable, as the facilities are asked to self-report all data on expenditures. The motivation is there for nursing home operators to hide profits any way they can so as not to tip off the government that they are getting wealthy from Medicare reimbursements.  Therefore, the data passed on by CMS to the Government Accountability Office cannot be considered a reliable source. Knowing this makes the information reported to CMS even more frightening than it would be if taken at face value.

Study Findings Show For Profits Invest Less in Resident Health & Wellness
Through a review of reported nursing staffing hours, the expense data reported to CMS, as well as through interviews with government officials and nursing home experts, GAO learned that nurse staffing ratios (the number of nurses per resident) is lowest at for profits. They also discovered that profit margins are highest at for profits. It seems unbelievable that the facilities making the most money spend the least amount of money paying staff to care for their residents, but it’s true and likely significantly worse than what has been reported to CMS.

The report specifically revealed that

  • PROFIT MARGINS:
    For Profits>Non Profits>Government Run
  • STAFFING RATIOS:
    Non Profits>Government Run>For Profits

Based on the expense data given to CMS, the Government Accountability Office was able to determine that for profits, especially chains, spend less money on not only staffing, but on expenses related to indirect patient care. Examples of indirect patient care include things like medical supplies, maintenance and housekeeping of the facility, continuing education for nursing and clinical staff, and resident nutrition.

The revelations are hardly groundbreaking for those who have been involved in preserving and protecting the rights of America’s elderly. But for anyone who is just considering a nursing home, currently has a loved one residing in a facility, or has lost someone who was a nursing home resident, the GAO report revelations will likely cause unease. As always, the nursing home neglect and abuse attorneys at Levin & Perconti encourage you to consider your options when making such a life-changing decision. CMS maintains a database of all nursing homes in the United States that receive federal funding and is a helpful tool when deciding which facility would make the best home for you or your loved one. We hope that you will use Nursing Home Compare and that you ask the right questions regarding staffing, investments in resident health and safety, and past violations. It has been made evident that even with reported half truths from the facilities, many nursing home operators are not in business to care for the elderly, but to profit off them.