Is Poor Quality Nursing Home Care Related to Closely Held Companies?
Nursing Home Abuse & Neglect lawyer
As a Nursing Home Abuse & Neglect lawyer, it has been my experience that many nursing homes and their ancillary service providers have common ownership. That is, the same persons or entities which own the facility, frequently own the facility’s related management company, real estate holdings company, temporary staffing service, etc. According to an analysis reported in Kaiser Health News of the financial records of nursing home nation-wide, nearly three-quarters of all nursing homes in the U.S. are owned by people who also have vested interest in companies that provide various services to their own. In the industry, these close dealings are commonly known as “related party transactions.”
In theory, related transactions can provide a mechanism for lowering costs and enhancing resources available for care. That is, a single ownership entity may if so inclined, be able to pass along savings or work at a lower profit margin and pass the benefits along to its residents. However, in my experience and those of my colleagues, this rarely, if indeed ever, occurs. In practice, it has been my experience that these related party transactions are used by nursing homeowners to strike sweetheart contracts with their related businesses paying above-market or competitive pricing, and thus affords them a way to siphon excessive profits on the related entity services at the expense of patient care.
Further, using various & multiple corporations allows the owners to create layers of legal protection, making it difficult or impossible for victims and their families to reach the true “responsible” parties in a lawsuit.
As the NJ Nursing Home Abuse Lawyers at Davis & Brusca, LLC know, nursing homes which deal in “related party transactions” tend to have significant deficits in “quality measures” related to patient care. The most common of these shortcomings is in staffing. It stands to reason that a nursing home must have a sufficient number of nursing staff in order to deliver care. If they lack the necessary numbers of qualified nurses, it will be impossible to meet the care needs of the residents and harm will necessarily follow. The Kaiser Health News analysis showed that this fact, which has been our experience, is replicated across the industry. Specifically, the Kaiser analysis revealed that nursing homes which outsource to related organizations “have fewer nurses and aides per patient, have higher rates of patient injuries and unsafe practices, and are the subject of complaints almost twice as often as independent [nursing] homes.”
Targeting the “true” responsible parties takes experience and expertise. The lawyers at Davis & Brusca, LLC, concentrate their practice in Nursing Home Neglect & Abuse. We are leaders in the national organizations seeking justice for victims of nursing home abuse and their families. If you or a loved one were injured while in the care of a nursing home, call our offices today to see how we can put our experience to work for you.
