The Problem of For-Profit Health Care Includes Long Term Care Services

Some who agree with Not Dead Yet on assisted suicide and euthanasia issues question and even criticize our orientation toward the health care system. This isn’t a forum for exploring overall health care policy in depth, but a few basics are worth mentioning.

The simple truth is that the primary mission of our nation’s for-profit health care system is to maximize profits, or income minus expenses, for shareholders and other types of owners by only spending as much on actual health care as the health care providers can get away with. This simple maxim was affirmed in a recent letter to the editor written by the former head of the national nursing home lobby (deceptively named the American Health Care Association), Paul Willging, in response to a September 23rd New York Times article, “At Many Homes, More Profit and Less Nursing.” In his letter, Willging, now associate director of program applications, division of geriatric medicine, Johns Hopkins University, wrote:

Your article confirmed an opinion I have held for some time. Even as past chief executive of the American Health Care Association, I began to suspect a possibly inherent contradiction between publicly traded and other large investor-operated nursing home companies and the prerequisites for quality care.

Can the investor’s focus (short-term profitability) simultaneously allow a comparable focus on the patient? I think the answer has to do with time frames.

Unfortunately, for many investors, those time frames are short. Earnings growth, quarter after quarter, is often paramount. Long-term investments in quality can work at cross purposes with a mandate for an unending progression of favorable earnings reports.

This is not to deny the existence of quality-oriented corporations. I see in many of them an increasing recognition that the value of the product is indispensable, if only for legislative and regulatory success. Your article suggests, however, that many of them still “don’t get it.”


Unfortunately, back when we in ADAPT began protesting AHCA and Willging in 1990, he used his business knowledge to oppose our civil rights and human rights mission.

The NYT article to which Willging responded focused on a growing trend involving the purchase of nursing homes by large private investment groups which are not subject to the disclosure requirements of publicly traded companies. After examining data available from the federal Centers for Medicare and Medicaid Services, the NYT analysis showed that these homes “have cut expenses and staff, sometimes below minimum legal requirements” and that these homes “scored worse than national rates in 12 of 14 indicators that regulators use to track ailments of long-term care residents, . . . include[ing] bedsores and easily preventable infections . . ..” The article included examples of resulting resident deaths.

So what about the regulators’ response to all this data? It seems that these private investment companies are very clever about using complex layers of corporate structure to both siphon profits and evade accountability. The owners create separate companies to collect their loot in rents and fees, leaving the company that operates the nursing home on a daily basis “holding the bag.” One private investment company executive defended this industry strategy as follows: “Lawyers were suing nursing homes because they knew the companies were worth billions of dollars, so we made the companies smaller and poorer, and the lawsuits have diminished.”

The health care system’s lack of accountability, and never-ending pursuit of ways to further insulate individuals and companies from responsibility for their actions, is perhaps the most significant recurring theme of this blog/web-site. One other way the nursing home industry pursues its interests with policy makers is through political contributions. On these and all nursing home related issues, I highly recommend the work of Steve Gold, an attorney who represents both ADAPT and Not Dead Yet.

No version of the health care system treats people with disabilities well [yet], but we’d rather pursue the goal of full disability respect and inclusion in the context of the fight for health care justice for all. In many health care justice rallies that focus on acute care, I’ve joined the chant, “People Not Profits,” but not all have recognized that this applies equally to long term care. The disability rights movement is sounding the alarm, but for us reform does not mean throwing more money at nursing homes. It means implementing our civil and human right to home and community based services that maximize consumer control while meeting individual needs. This is the solution to the “problem” of the coming wave of aging baby boomers, by the way, not euthanasia.—-Diane Coleman