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Big chain builds up long list of shortfalls in state inspections

Sunday, September 22, 2002

By Gary Rotstein, Post-Gazette Staff Writer

HCR Manor Care, the largest owner of nursing homes in Pennsylvania and one of the biggest chains in the country, has quietly amassed an inferior record on state inspections.

The recent survey performance of the Toledo, Ohio-based chain reflects a key finding from the Pittsburgh Post-Gazette's analysis of state Health Department data: For-profit homes in Pennsylvania are cited for far more deficiencies than nonprofit or government-run facilities.

The Manor Care record in Pennsylvania

And despite the company's stellar image historically among the biggest providers, Manor Care's Pennsylvania homes show up with serious problems 4 1/2 times more commonly than the state average.

The analysis of 30 months of data focused on 33 nursing homes with the worst survey records among 761 in the state. Those 33 were those receiving at least 40 deficiency citations overall, including five or more in the serious categories known as "actual harm" and "immediate jeopardy."

The breakdown by type of ownership showed 24 of 331 for-profit homes in that worst-survey category. By comparison, just eight of 381 nonprofit homes and one of 42 county-owned facilities were on the list.

Nine of 47 Manor Care homes, or 19.1 percent, fell into the worst deficiency category compared with 4.3 percent of homes statewide.

The chain's homes also have run up a long list of state penalties. They have a total of 14 temporary bans on admissions, 29 provisional licenses and 32 fines totaling $242,500 since 1998.

Most of Manor Care's nine facilities in the Pittsburgh area are no exception, though many are in attractive, modern, suburban buildings with no hint of problems inside.

Seven of the nine have received provisional licenses or fines since 2000. It is atypical for nursing homes to be dealt either of those punishments -- fewer than 10 percent receive them each year.

The federal government also has punished Manor Care in Pennsylvania by levying about $550,000 in fines against 18 of its homes since 2000. Some consumer groups question how much such costs matter, to a company that generated $2.7 billion in revenue and net income of $68.5 million last year.

Other national and state studies also have shown a marked difference between for-profit and nonprofit homes in staffing levels, deficiency citations and quality of care.

William Aaronson, an associate professor of healthcare management at Temple University, said some of the free-market quality incentives that normally exist for private businesses don't apply to nursing homes. For one thing, most people select a home out of desperation rather than through comparison-shopping.

"The reality is that nursing home administrators in for-profit chains are extraordinarily pressured to turn a profit in each nursing home. That could mean, and often does mean, the administrators don't make decisions necessarily based on the best care to patients," he said.

His 1994 research study on Pennsylvania nursing homes found higher staffing levels and fewer pressure sores -- one telltale marker of general care -- in nonprofit homes.

Pennsylvania is an unusual state in that more than half of nursing homes are nonprofit, reflecting the many religious groups that started elder-care programs in the 19th century. Nationally, two-thirds of nursing homes are for-profit.

It is unclear whether Manor Care's many deficiencies are a state phenomenon or a national issue for the company. No national data exist for tracking inspections and enforcement actions against homes that have common ownership but operate in different states.

Quality concerns about Manor Care also have arisen elsewhere, although industry analysts say it was historically considered a premiere chain and remains ahead of competitors in financial management.

The Associated Press reviewed the survey inspection records of Iowa nursing homes last year and found that Manor Care homes had more deficiencies than other chains, and on average had at least twice as many citations as other facilities.

Pennsylvania Health Department officials say their job is to review each facility separately, and they don't make assumptions about the quality of care just because other homes in the same chain have problems. Of the 47 Manor Care homes, 24 have had no licensing problems or enforcement actions against them since 1998.

But the chain's Harrisburg operation has had more problems than any other facility in Pennsylvania, with citations for 181 deficiencies in 30 months, eight times the average of similarly sized facilities.

It is the only home in the state with a Provisional IV license, meaning the Health Department is supposed to shut it down if problems aren't corrected by February.

"The Harrisburg home is an embarrassment to everybody. I don't understand why they can't get it fixed," said Deputy Health Secretary Richard Lee, though adding the state still wants to work with the company to see improvements rather than closing.

Lee said Manor Care has "some good facilities, some bad facilities," but hasn't caused state officials any widespread concerns.

Industry insiders and outside analysts who were told of Manor Care's recent record in Pennsylvania usually expressed surprise.

"Most of us in the industry sort of look at them as a model company. ... They've always had a decent reputation," said Peter Burke, a consultant with Brandywine Senior Care Inc., which owns and manages homes in Pennsylvania, New Jersey and Delaware.

A recent analysis of Manor Care from Credit Suisse First Boston raved about the company's finances in comparison with its competitors. Unlike five other large chains, it avoided bankruptcy during major restructuring of the federal government's Medicare reimbursement program in the late 1990s.

The company is known for its low percentage of residents covered by Medicaid, the government subsidy program that pays less per day to nursing homes than either Medicare or private payors.

"[Manor Care] has a track record for efficiency," said the Credit Suisse First Boston report. "As a consequence, it has been more successful at operating profitably [under a prospective payment system] than most nursing home companies."

When asked to respond to the data compiled about its Pennsylvania facilities, the company described a patient population with extensive care needs.

"HCR Manor Care cares for high acuity patients with complex medical conditions," its printed statement said.

Manor Care homes generally have a higher proportion of Medicare patients than most nursing homes. Those residents are frequently admitted from a hospital for temporary care. They generate the highest revenues for nursing homes, because of their medical needs.

"Patients with unstable health status have a greater opportunity for the sudden change in a patient's condition, resulting in the increased probability of a survey deficiency in the zero tolerance regulatory environment," the company's statement said.

Manor Care also noted that its Pittsburgh-area facilities with previous provisional licenses --in Bethel Park, Green Tree, Monroeville and North Hills and Sky Vue Terrace, in the Spring Hill section of the North Side -- have regular licenses now.

Nine of Manor Care's 47 homes in Pennsylvania do not carry the Manor Care name. In the Pittsburgh area, those include not only Sky Vue but Shadyside Nursing and Rehabilitation Center and Heartland Health Care Center, also in Shadyside.

Neither Heartland nor Manorcare Whitehall have received fines or provisional licenses in recent years.

Inspection records available on the state Health Department's Web site show past problems in the chain's other local facilities from medication errors, excessive weight loss and pressure sores, too many injuries in accidents, slow response to call bells, failure to stop patients from abusing one another, and lack of therapy, among other deficiencies.

The company said it could not discuss specific cases, such as William Walker's death, because of confidentiality concerns.

The March 20 death of Walker, 86, a former North Side barber, led the state to slap a $6,500 fine and provisional license on Shadyside Nursing and Rehabilitation Center. A $5,000 federal fine was also issued.

Walker was supposed to be monitored hourly by staff while sleeping because of a history of falls. An alarm was to be attached to Walker's clothing to signal the staff of any movements from bed.

When he was found on the floor of his room after 8 a.m., asphyxiated from his neck being caught in a bed rail, the alarm was on his bureau instead of his clothes. It had been nearly three hours since an aide checked on Walker, according to the state's report.

The childless widower with dementia had no family members, and was looked after by a friend, Ardella Tiller, with power of attorney. She said his care had appeared satisfactory during four years at both the Shadyside facility and Manorcare North Hills before that.

But she was surprised when she saw the death certificate listing asphyxiation as the cause of death. She had assumed he died naturally of a heart attack or something similar, and the nursing home had volunteered no information about it when contacting her.

"At first, I thought it was just the age he was at," which prompted his death, Tiller said. "Then I found out it wasn't really his time."

Maureen Wilkins, a blind and bedbound but mentally alert resident of Manorcare Whitehall, said the facility is clean and free of odors with many helpful staff.

But Wilkins, the president of the residents council there, said she and other patients frequently talk about how daytime staffing levels seem low, resulting in long waits for assistance.

"You're waiting for a bedpan, and might wait for hours, and it should not be that way," Wilkins said. "It would be OK even if they got there within a half hour, but they just ignore the call light."

Manor Care officials say they have been making progress on staffing issues recently through national welfare-to-work programs and other initiatives, which have reduced the need to employ temporary workers from agencies.

Manor Care is the result of a 1998 merger between two companies, Health Care and Retirement Inc., or HCR, and the former Manor Care based in Gaithersburg, Md.

It was HCR officials who took over primary management, even though Manor Care was bigger and had a high reputation for quality from the mission-like approach of the Bainum family, who controlled it.

The company in recent years has been increasing its percentage of Medicare-paid patients, the biggest revenue generators in a nursing home, while keeping its lower-reimbursement Medicaid patients to 32 percent, well below industry norms.

Alan Rosenbloom, president of the Pennsylvania Health Care Association, said he was unfamiliar with any problems by Manor Care in the state.

When told of the disparity between for-profit and nonprofit homes in state inspection surveys, Rosenbloom said it might be due in part to financial advantages from operating as a nonprofit.

He noted that nonprofits are more likely than for-profits to be part of a continuing-care campus, where revenues from private-pay residents in independent apartments or assisted-living can help support nursing home costs.

Also, because those private-pay residents are often inclined to move into a faith-based or other nonprofit home, there's less reliance in those facilities on Medicaid residents, for whom reimbursements may not cover the true cost of care.

A report by Charlene Harrington, a University of California-San Francisco researcher of staffing issues, found that for-profit facilities averaged 5.89 deficiencies per home in 1998, 47 percent higher than non-profits and 43 percent higher than government nursing homes.

Rosenbloom and Ron Barth, his counterpart at PANPHA, the state association representing primarily nonprofit homes, said that survey results alone don't tell much about a home, and a consumer should learn the reasons for a deficiency to determine its importance.

But Barth did see financial advantages to being a nonprofit, in terms of the level of staff that can be provided and other plusses.

"More money is probably put into resident services because all money generated ultimately goes back into services," rather than shareholders, Barth said. He noted that many nonprofit operators also have benevolent funds to supplement the low-income cases they care for.

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