Money & Nursing Home Care: Large Chain Sold for $845 Million

The connection between money and nursing home neglect is well-documented. Our Illinois nursing home attorneys work on many cases where financial incentives are, in one way or another, connected to the underlying harm that seriously injures (or even kills) local seniors. Of course there is no way to entirely take finances out of the long-term care industry, as all business is motivated by profit. However, that does not mean nothing can be done to ensure a better balance between proper care and the pursuit of money for owners and operators of long-term care facilities.

At the very least, it is crucial to discard the canard that these industries are unable to make a profit when reasonable regulations are put into effect to ensure decent care for the seniors who rely on them. Nursing home neglect is simply unacceptable, and it is perfectly reasonable to require conduct that eliminates the most serious risks of harm, even if those requirements come at some cost to the business.

Yet, time and again these companies devote many resources fighting even the most basic requirements that residents receive a certain amount of certified nursing care each day. The problem certainly exists in Illinois. We have often reported on the struggles to actual enforce current nursing home laws. While helpful laws were passed recently with a focus on patient safety, it remains to be seen if those laws are actually followed. Laws are no good on paper–they must translate into actual action. Yet, when large profit margins are on the line, many companies chose to fight every step of the way to maintain the status quo.

These industries can afford it–the largest chains are worth hundreds of millions (or billions) of dollars.

For example, Reuters reported earlier this week on the latest sale in the industry with one company buying a large assisted-living group for $845 million. Specifically, the story reports that Health Care Real Estate Investment Trust Inc. bought the large group of senior living facilities owned by Sunrise Senior Living Inc. It was described as “an all-cash deal to bulk up its assisted living portfolio as affluent baby boomers prepare to retire.” The deal involved 20 wholly owned senior housing communities as well as 105 “joint venture housing properties.”

This latest deal is only one of various large senior center purchases worth hundreds and hundreds of millions of dollars.

The story noted that a 2007 law allows these real estate investment trusts (REITs) to grow larger. And they have been doing just that. Specifically, the legislation allows these companies to earn rent on properties they lease to others and then acquire operating income by retaining independent management for a fee.

What does all of this mean to regular community members? Be diligent about the way that money affects the care received by your loved ones–particularly at private facilities involved in these sorts of nursing home conglomerates. Ask almost any Chicago nursing home neglect attorney and they’d likely report working in situations where financial pressures at those homes led to staffing reductions, lax training, and other problems which contributed to mistreatment of residents.

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