Understaffing, Neglect Are Common in Profit-Driven Nursing Homes

Nursing homes and assisted living facilities are in business to make money. They know that the U.S. population is aging and living longer, and that their potential clientele is often well-equipped with retirement savings and assets to pay top dollar prices.

For corporations in this $34 billion-dollar industry – including private equity and real estate investment firms with no actual experience or training in caring for the elderly – senior citizens are little more than dollar signs.

And, as a recent article from the Washington Post shows, their focus on profits has come at a price – particularly in how it increases risks for understaffing, neglect, and other hazardous conditions that contribute to injuries, death, exploitation, and nursing home abuse.

Nursing Home Death Highlights Deeper Problems

The Washington Post article – Understaffed and neglected: How real estate investors reshaped assisted living – shares the story of a 97-year-old woman at the Lavender Farms assisted-living facility near Boulder, Colorado who was locked out of the facility during winter. Surveillance footage showed the woman, who had been flagged for close monitoring because of confusion and hallucinations, banging repeatedly on the facility’s locked doors before she succumbed to subfreezing temperatures.

As the article notes, the woman’s death was one of at least 20 cases of neglect, missing residents, or preventable deaths cited at Colorado facilities owned by Balfour Senior Living, a well-known provider of senior housing.

While Balfour has been a respected name in the industry and is known for its boutique hotel-like facilities, the buildings where Balfour operates its homes have been increasingly acquired by investment firms that have shifted the focus to profits and engaged in waves of cost cutting that have left Balfour and other providers in the senior housing business unable to need the basic needs of residents.

This was precisely the case in freezing death at Lavender Farms, where in the weeks leading up to the tragedy, Balfour managers expressed concerns about insufficient staffing and other issues that contributed to problems involving residents roaming corridors at odd hours and wandering outside unnoticed. While Balfour proposed raising wages to hire and retain better caregivers and improve resident safety, their proposed solutions, though sensible, were met with resistance from Welltower, the $40 billion-dollar investment firm that owned Lavender Farms. As one former Balfour executive noted of Welltower in a civil case brought by the woman’s surviving family:

“Their position was: We are trying to increase our profitability. Care is an ancillary part of the conversation.”

The article goes on to discuss how failures at Balfour homes illustrate a deeper problem in the assisted living and memory care industry, which houses and cares for an estimated 1+ million Americans.

It notes how the industry has been reshaped by real estate speculators looking to capitalize on the aging baby boomer generation, and how these investors have used their financial influence to secure the passage of favorable legislation that better positioned them to overtake the industry– including a law passed in 2008 that gave certain investors the ability to hold senior-housing properties tax-free while also taking a portion of their annual income. Typically, these firms manage real estate investment trusts, or REITs, to purchase senior-housing properties.

The result of this law and the growing popularity of REITs focused on investing in senior housing has been profound.

Today, numerous senior housing facilities are now held by investors that – rather than being motivated to provide care and safety to their residents – prioritize ways to produce profits for their shareholders. This often means slashing operating expenses and employing fewer and less experienced caregivers, many of whom are paid less than Starbucks baristas. The results have been devastating to patient care and have resulted in widespread abuse and neglect.

As the Post found in a separate investigation, nearly 100 senior home residents have died in the past five years alone after wandering away from their facilities or being left outside. Insufficient staff, poor training, and neglect are often cited in investigations of these deaths by regulators.

Meanwhile, the investment firms calling the shots at these senior homes are reaping massive profits, enjoying nearly double the return than for investments in hotels or office space, and collecting as much as 30% of residents’ monthly rent checks. Investors also find senior homes more attractive because they gain rental income without direct exposure to the risks of caring for sick and elderly people, as they hire and pay management companies (like Balfour) to run the facilities for them.

Brown & Barron, LLC: Leading the Fight for Victims of Nursing Home Neglect

Brown & Barron, LLC is a nationally recognized trial practice with a legacy for helping seniors and families fight for justice after suffering losses due to nursing home abuse and neglect.

Over our many years practicing in this field, we have seen first-hand how private equity and investment firms have fundamentally changed how senior homes operate and care for residents. As corporations that prioritize profits over people, these entities are more concerned about supporting shareholders than the seniors who pay and trust them, and they routinely engage in harmful practices that greatly increase residents’ risks for suffering preventable harm.

Some of the issues we’ve seen include:

Chronic understaffing and a lack of trained and experienced staff
Inadequate training and supervision
Medication errors, including missed medications and medication mix-ups
Nutritional neglect
Increased falls and physical injuries
Resident wandering, including cases resulting in death
Unnoticed bed sores
Rampant abuse and exploitation

At Brown & Barron, LLC, we’re committed to holding the corporations accountable when their focus on profits comes at the price of devastating consequences for seniors and their loved ones. If you have questions about a potential case involving abuse, neglect, or other failings at a nursing home or senior housing facilities anywhere in Baltimore or the state of Maryland, we’re available to help.

Call (410) 698-1717 or contact us online to request a free consultation.