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| Push for Profits Left Nursing Homes Struggling to Provide Care | Push for Profits Left Nursing Homes Struggling to Provide Care |
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| When the pandemic struck, the majority of the nation’s nursing homes were losing money, some were falling into disrepair, and others were struggling to attract new occupants, leaving many of them ill equipped to protect workers and residents as the coronavirus raged through their properties. | When the pandemic struck, the majority of the nation’s nursing homes were losing money, some were falling into disrepair, and others were struggling to attract new occupants, leaving many of them ill equipped to protect workers and residents as the coronavirus raged through their properties. |
| Their troubled state was years in the making. Decades of ownership by private equity and other private investment firms left many nursing homes with staggering bills and razor-thin margins, while competition from home care attendants and assisted-living facilities further gutted their business. Even so, many of their owners still found creative ways to wring profits out of them, according to an analysis of federal and state data by The New York Times. | Their troubled state was years in the making. Decades of ownership by private equity and other private investment firms left many nursing homes with staggering bills and razor-thin margins, while competition from home care attendants and assisted-living facilities further gutted their business. Even so, many of their owners still found creative ways to wring profits out of them, according to an analysis of federal and state data by The New York Times. |
| In many cases, investors created new companies to hold the real estate assets because the buildings were more valuable than the businesses themselves, especially with fewer nursing homes being built. Sometimes, investors would buy a nursing home from an operator only to lease back the building and charge the operator hefty management and consulting fees. Investors also pushed nursing homes to buy ambulance transports, drugs, ventilators and other products or services at above-market rates from other companies they owned. | In many cases, investors created new companies to hold the real estate assets because the buildings were more valuable than the businesses themselves, especially with fewer nursing homes being built. Sometimes, investors would buy a nursing home from an operator only to lease back the building and charge the operator hefty management and consulting fees. Investors also pushed nursing homes to buy ambulance transports, drugs, ventilators and other products or services at above-market rates from other companies they owned. |
| These strategies paid off handsomely for investors, but they forced nursing homes to skimp on quality. For instance, for-profit nursing homes — roughly 70 percent of the country’s 15,400 nursing homes and often owned by private investors — disproportionately lag behind their nonprofit counterparts across a broad array of measures for quality, The Times found. Also, they are cited for violations at a higher rate than nonprofit facilities. | These strategies paid off handsomely for investors, but they forced nursing homes to skimp on quality. For instance, for-profit nursing homes — roughly 70 percent of the country’s 15,400 nursing homes and often owned by private investors — disproportionately lag behind their nonprofit counterparts across a broad array of measures for quality, The Times found. Also, they are cited for violations at a higher rate than nonprofit facilities. |
| The toll of putting profits first started to show when the outbreak began. No nursing home could be completely prepared for a pandemic as devastating as Covid-19, but some for-profit homes were particularly ill equipped and understaffed, which undercut their ability to contain the spread of the coronavirus, according to interviews with more than a dozen nursing home workers and elder-care lawyers. | The toll of putting profits first started to show when the outbreak began. No nursing home could be completely prepared for a pandemic as devastating as Covid-19, but some for-profit homes were particularly ill equipped and understaffed, which undercut their ability to contain the spread of the coronavirus, according to interviews with more than a dozen nursing home workers and elder-care lawyers. |
| The pandemic “has brought a lot of these issues to the forefront,” said David Grabowski, professor of health care policy at Harvard Medical School. “With this huge health crisis and economic downturn, we are all of a sudden seeing how risky it is to have the ownership split between the real estate side that has the most valuable asset and the operator, who is left with much less.” | The pandemic “has brought a lot of these issues to the forefront,” said David Grabowski, professor of health care policy at Harvard Medical School. “With this huge health crisis and economic downturn, we are all of a sudden seeing how risky it is to have the ownership split between the real estate side that has the most valuable asset and the operator, who is left with much less.” |
| Controlling the real estate gives investors, including real estate investment trusts, leverage to raise rents. Separating the real estate from the operating business can also help limit liability in wrongful-death lawsuits, because the latter typically has little cash and few assets. | Controlling the real estate gives investors, including real estate investment trusts, leverage to raise rents. Separating the real estate from the operating business can also help limit liability in wrongful-death lawsuits, because the latter typically has little cash and few assets. |
| “The structure is designed to keep liability on the company that has the fewest assets and the most debt,” said William Murray, a plaintiffs lawyer who specializes in suing nursing homes. | “The structure is designed to keep liability on the company that has the fewest assets and the most debt,” said William Murray, a plaintiffs lawyer who specializes in suing nursing homes. |
| Private equity firms and other investors first gravitated to nursing homes more than a decade ago, betting that aging baby boomers would create demand irrespective of economic cycles and counting on a steady stream of Medicare and Medicaid reimbursements. | Private equity firms and other investors first gravitated to nursing homes more than a decade ago, betting that aging baby boomers would create demand irrespective of economic cycles and counting on a steady stream of Medicare and Medicaid reimbursements. |
| A recent report on private equity buyouts of nursing homes, which studied 119 transactions from 2000 to 2017, said private equity owners tended to put “high-powered profit maximizing incentives” first. The researchers found that after private equity stepped in, nursing staff hours per patient fell 2.4 percent, and staff quality as measured by federal regulators fell 3.6 percent. | A recent report on private equity buyouts of nursing homes, which studied 119 transactions from 2000 to 2017, said private equity owners tended to put “high-powered profit maximizing incentives” first. The researchers found that after private equity stepped in, nursing staff hours per patient fell 2.4 percent, and staff quality as measured by federal regulators fell 3.6 percent. |
| “The quality of care declines after the private equity buyout, which seems to reflect staffing cuts,” said one of the report’s authors, Sabrina T. Howell, assistant professor of finance at New York University’s Stern School of Business. | “The quality of care declines after the private equity buyout, which seems to reflect staffing cuts,” said one of the report’s authors, Sabrina T. Howell, assistant professor of finance at New York University’s Stern School of Business. |
| Ruthie Moore, a 68-year-old certified nursing assistant who works at Burbank Rehabilitation Center, a for-profit nursing home in Illinois owned by a prominent local investor, said she had been overwhelmed with patients even before the pandemic. The facility provided below-average staffing that was also highly inconsistent, records show. On some days, there was one certified nursing assistant for every 10 residents, according to payroll records. On other days, there was one for every 19. | Ruthie Moore, a 68-year-old certified nursing assistant who works at Burbank Rehabilitation Center, a for-profit nursing home in Illinois owned by a prominent local investor, said she had been overwhelmed with patients even before the pandemic. The facility provided below-average staffing that was also highly inconsistent, records show. On some days, there was one certified nursing assistant for every 10 residents, according to payroll records. On other days, there was one for every 19. |
| Things got much worse when the virus hit, Ms. Moore said. Residents, including ones with possible symptoms of Covid-19, were mixing with other patients. Personal protective equipment was scarce, and members of the staff were told to wear the same mask for up to two weeks, she said. | Things got much worse when the virus hit, Ms. Moore said. Residents, including ones with possible symptoms of Covid-19, were mixing with other patients. Personal protective equipment was scarce, and members of the staff were told to wear the same mask for up to two weeks, she said. |
| Six residents of the Burbank facility have died of Covid-19 and 41 others have fallen sick, according to local reports citing state health officials. The facility gets a one-star rating — the lowest ranking in the federal government’s five-star rating system for nursing home care. In a document filed with federal regulators for 2018, Burbank’s operator listed assets of $4.4 million and liabilities of $10 million. | Six residents of the Burbank facility have died of Covid-19 and 41 others have fallen sick, according to local reports citing state health officials. The facility gets a one-star rating — the lowest ranking in the federal government’s five-star rating system for nursing home care. In a document filed with federal regulators for 2018, Burbank’s operator listed assets of $4.4 million and liabilities of $10 million. |
| “Had we had more staff and protective equipment, there would have been fewer deaths,” said Ms. Moore, who recently began showing symptoms and is awaiting a diagnosis. | “Had we had more staff and protective equipment, there would have been fewer deaths,” said Ms. Moore, who recently began showing symptoms and is awaiting a diagnosis. |
| Burbank’s owner is a Chicago-area investor, William Rothner. He and his family run a network of companies that have stakes — owning a piece of either the operating business or the building — in at least 60 nursing homes across the country, according to disclosures and other documents. Companies owned by Mr. Rothner also provide ventilators, pharmaceuticals, management services and payroll services to many of those facilities, according to financial filings with Illinois. | Burbank’s owner is a Chicago-area investor, William Rothner. He and his family run a network of companies that have stakes — owning a piece of either the operating business or the building — in at least 60 nursing homes across the country, according to disclosures and other documents. Companies owned by Mr. Rothner also provide ventilators, pharmaceuticals, management services and payroll services to many of those facilities, according to financial filings with Illinois. |
| Most of the nursing homes in which Mr. Rothner has an interest in Illinois reported a net loss from operations in 2018, regulatory filings show. For instance, the Parc at Joliet, which has had at least seven coronavirus-related deaths, reported an operating loss of $714,000. But other companies that Mr. Rothner owns charged the home $1.4 million in rent as well as $138,000 in professional fees and $335,000 in fees to an affiliated pharmaceutical supply company, among other charges, according to those filings. | Most of the nursing homes in which Mr. Rothner has an interest in Illinois reported a net loss from operations in 2018, regulatory filings show. For instance, the Parc at Joliet, which has had at least seven coronavirus-related deaths, reported an operating loss of $714,000. But other companies that Mr. Rothner owns charged the home $1.4 million in rent as well as $138,000 in professional fees and $335,000 in fees to an affiliated pharmaceutical supply company, among other charges, according to those filings. |
| Mr. Rothner said in an email that there had been no “recent citations for inadequate staffing” and “no valid assertions or claims on inadequate P.P.E.” at Burbank. He also said his firm, Altitude Health Services, monitored management fees taken by the separate firms that run the nursing homes to make sure they were not excessive. He added that his firm provided ancillary services at competitive prices that were often lower than other companies and complied with all regulations. | Mr. Rothner said in an email that there had been no “recent citations for inadequate staffing” and “no valid assertions or claims on inadequate P.P.E.” at Burbank. He also said his firm, Altitude Health Services, monitored management fees taken by the separate firms that run the nursing homes to make sure they were not excessive. He added that his firm provided ancillary services at competitive prices that were often lower than other companies and complied with all regulations. |
| Updated July 7, 2020 | |
| The coronavirus can stay aloft for hours in tiny droplets in stagnant air, infecting people as they inhale, mounting scientific evidence suggests. This risk is highest in crowded indoor spaces with poor ventilation, and may help explain super-spreading events reported in meatpacking plants, churches and restaurants. It’s unclear how often the virus is spread via these tiny droplets, or aerosols, compared with larger droplets that are expelled when a sick person coughs or sneezes, or transmitted through contact with contaminated surfaces, said Linsey Marr, an aerosol expert at Virginia Tech. Aerosols are released even when a person without symptoms exhales, talks or sings, according to Dr. Marr and more than 200 other experts, who have outlined the evidence in an open letter to the World Health Organization. | |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. | Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. |
| A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. | A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| Mr. Rothner’s company also owns the buildings for two nursing homes in Sussex County, N.J., where more than 60 residents have died of Covid-19 and where 17 of the bodies were hidden in a small on-site morgue. His company leases the facilities for about $8 million a year to Alliance Healthcare, which runs the nursing homes. | Mr. Rothner’s company also owns the buildings for two nursing homes in Sussex County, N.J., where more than 60 residents have died of Covid-19 and where 17 of the bodies were hidden in a small on-site morgue. His company leases the facilities for about $8 million a year to Alliance Healthcare, which runs the nursing homes. |
| On Thursday, federal health regulators said they had fined the operator $220,000, and that the fine could keep growing until the problems are remedied. Specifically, regulators found that one of the facilities was not following infection control safety practices and guidance recommended by federal officials during the pandemic. | On Thursday, federal health regulators said they had fined the operator $220,000, and that the fine could keep growing until the problems are remedied. Specifically, regulators found that one of the facilities was not following infection control safety practices and guidance recommended by federal officials during the pandemic. |
| The nursing home industry is pushing for broad immunity in the wake of the pandemic. So far, 16 states, including New York, New Jersey, Michigan, Georgia and Illinois, have already approved measures granting immunity from lawsuits — a development that worries longtime critics of the industry. | The nursing home industry is pushing for broad immunity in the wake of the pandemic. So far, 16 states, including New York, New Jersey, Michigan, Georgia and Illinois, have already approved measures granting immunity from lawsuits — a development that worries longtime critics of the industry. |
| “A lot of these nursing homes are trying to get immunity because of Covid, and that is really scary because some of these companies are so negligent,” said Charlene Harrington, a professor emerita of nursing at the University of California, San Francisco. Many for-profit nursing home operators report meager profits only because income is “drained off in their management contracts,” she said. | “A lot of these nursing homes are trying to get immunity because of Covid, and that is really scary because some of these companies are so negligent,” said Charlene Harrington, a professor emerita of nursing at the University of California, San Francisco. Many for-profit nursing home operators report meager profits only because income is “drained off in their management contracts,” she said. |
| Not all nursing home buyouts have worked well for private equity firms. In 2018, HCR ManorCare, which was the nation’s second-largest nursing home operator, filed for bankruptcy protection — a decade after the Carlyle Group, a big private equity firm, acquired it. When it filed, ManorCare had $7.1 billion in debt, and its facilities had racked up numerous citations for failure to treat infections and properly monitor residents’ medications, records show. | Not all nursing home buyouts have worked well for private equity firms. In 2018, HCR ManorCare, which was the nation’s second-largest nursing home operator, filed for bankruptcy protection — a decade after the Carlyle Group, a big private equity firm, acquired it. When it filed, ManorCare had $7.1 billion in debt, and its facilities had racked up numerous citations for failure to treat infections and properly monitor residents’ medications, records show. |
| Years before ManorCare declared bankruptcy, Carlyle sold the homes for $6.1 billion to a real estate investment trust, a move that largely wiped out the debt of the nursing homes. ManorCare then rented many of those facilities. | Years before ManorCare declared bankruptcy, Carlyle sold the homes for $6.1 billion to a real estate investment trust, a move that largely wiped out the debt of the nursing homes. ManorCare then rented many of those facilities. |
| In November, Senators Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio sent letters to four private equity firms, including Carlyle, seeking information about their involvement with nursing homes. Carlyle, in its response to the two Democrats, said that patient care had not been affected during the bankruptcy and that all employees were paid. A spokeswoman for Carlyle, which no longer owns any nursing homes in the United States, declined to comment. | In November, Senators Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio sent letters to four private equity firms, including Carlyle, seeking information about their involvement with nursing homes. Carlyle, in its response to the two Democrats, said that patient care had not been affected during the bankruptcy and that all employees were paid. A spokeswoman for Carlyle, which no longer owns any nursing homes in the United States, declined to comment. |
| A representative for Ms. Warren said that only Formation Capital, an Atlanta private equity firm that specializes in nursing home investments, hadn’t responded. | A representative for Ms. Warren said that only Formation Capital, an Atlanta private equity firm that specializes in nursing home investments, hadn’t responded. |
| Formation led the buyout of Genesis Healthcare, the nation’s largest nursing home operator, in 2007; Genesis returned to the public markets seven years later. The private equity firm has a consulting arm that sells services to nursing homes, including some that Formation owns or has a financial interest in. | Formation led the buyout of Genesis Healthcare, the nation’s largest nursing home operator, in 2007; Genesis returned to the public markets seven years later. The private equity firm has a consulting arm that sells services to nursing homes, including some that Formation owns or has a financial interest in. |
| Formation has said in a filing that it had policies “that are intended to mitigate this potential conflict of interest.” The firm did not respond to requests for comment. | Formation has said in a filing that it had policies “that are intended to mitigate this potential conflict of interest.” The firm did not respond to requests for comment. |