Despite Declining Medicare Reimbursement Rates and Declining Quality of Care, Nursing Home Profits Have Surged

April 9, 2012
By Parker Scheer LLP on April 9, 2012 9:32 AM |

On October 1, 2011, Medicare slashed their reimbursement rates to nursing homes by 11%, which resulted in concerns that jobs would be lost due to declining revenue and thus quality of patient care would suffer. However, 2011 year-end and 4th quarter earning statements among publicly-traded nursing homes were strong and many had better than expected operating results.

Unfortunately, despite rising profits, patient care in most nursing homes is mediocre at best and executives tend to target labor costs as a means to offset any decline in reimbursement rates. So, while investor profits surge, more patients are the victims of neglect and abuse.

Given the amount of money at stake - record annual revenues up 198% in 2011 - executives at nursing homes are going to maintain status quo, or worse, cut patient care even more and turn a greater profit for investors. At present, there is no way to monitor these nursing homes because the corporate structure makes it almost impossible to determine the actual entity responsible for running the facility. This loophole results in no one entity having overall responsibility - and in turn, culpability - for poor patient care.

For the complete article, click here.