The New York Times and Harvard Public Health completed studies which found that hedge fund investments in nursing homes resulted in worse customer service than before the investment. What is wrong with nursing home investments by hedge funds? Well, as a general rule in business, employee payrolls total about 50% of the business’ expenses. If you can reduce employee head count you are doing well in business in the name of efficiencies. But, if you are taking care of the elderly and particularly dependent, mobility impaired, or cognitively impaired people, reducing the head count of your nursing or other staff is a recipe for poor care. Reduced staffing correlates closely with reduced quality of care. So, aggressive cost cutting by an investor is not a good sign for your loved one’s health. It’s fairly simple.
I handle a few nursing home cases annually, but I prefer the clear cut ones to the general neglect cases. Two fractured hips in a nursing home in a year is evidence of clear negligence. A patient leaving the premises or elopement, is another clear example of negligence. But, there are many, many cases that I simply cannot get involved in. Poor care that results in a worsening of a debilitated patient is a common theme. Frustratingly often, people come to me to complain that their loved one was not properly attended to and got worse during their nursing home stay. It is plain to me that this is the result of reduced staffing or reduced hours or some sort of business decision by the nursing home ownership. But the prospect of proving how someone worsened from debilitated to more debilitated is not an appealing case to me. It simply holds little potential reward for me as a business. So, absent some federal or state intervention, the neglect will continue. It is ironic that I am forced to forgo pursuing some cases for the same financial reasons that the negligence is occurring in the first place.