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Is the Nursing Home Industry Actually Facing Financial Problems?

The most common excuse made by those who own and operate nursing homes for providing substandard care is that they do not have enough money to raise their standards. This is perhaps most pronounced when it comes to proper staffing levels. Each Illinois nursing home neglect lawyer at our firm knows that much suffering and neglect at these facilities can be traced back to the simple fact that there are often not enough employees providing care for the residents at any given time. When staff members are stretched far too thin, basic caregiving steps are skipped, resulting in the problems like malnutrition, dehydration, pressure sores, and similar preventable harms.

When called on the fact that staff levels are too low, most facilities claim that it is simply impossible to hire more employees because of financial concerns. But are those claims accurate?


As Families for Better Care recently explained recently, the industry has incredibly healthy profit margins. The group’s executive director summarized after reviewing the industry’s books that “the industry’s own reports…[reveal] surging revenues, strong profits, and expansion through acquisitions. The industry is wallowing in strong profits while failing to provide quality care.”

Our Chicago nursing home neglect lawyers know that the reality is much different than the claims made by those running these facilities. For example, Medicare made reimbursement changes last year that owners claimed would cripple them. However, profits remained steady and CEO salaries and investor profits didn’t budge. As usual, many facilities decided to absorb any reimbursement reductions by cutting front-line staff members. In other words, they had no problem sacrificing care quality and tolerating nursing home neglect so long as benefits for owners and operators remained strong.

These findings were recently reinforced by a recent research effort from Avalere Health. The group surveyed industry respondents involved in care at nearly 3,000 nationwide long-term care facilities. Of that group, about 37% were firing direct care workers-those most responsible for ensuring proper treatment of seniors and disabled residents. Nearly three out of four facilities were cutting rate structures for those workers, and about half of facilities were planning on taking away benefits from the critical employees.

These labor cuts will have severe consequences for residents at these facilities. In many situations it is often impossible for care workers to provide a proper level of care when they are so understaffed. As a result, it is often only a matter of time before certain preventable accidents happen at these facilities, such as a fall, wandering accident, or similar tragedies. Family members of those at these homes should be aware of all staffing issues that might affect the care their loved one receive.

It is important to distinguish that these trends generally represent the for-profit sector of the industry. Non-profit and public facilities generally engage in far less obvious cuts to care workers. Of course, these facilities are not forced to sustain profit margins for stockholders or CEO salaries. Therefore, ensuring profit resources are provided to front-line care workers is a priority at many of these homes which is reflected in the overall quality of treatment.

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