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Long Term Nursing Home and Assisted Living Facilities

(5/11/14) Griffin-American Healthcare, a real estate investment trust (REIT) that is the owner of senior housing and skilled nursing facilities, hospitals, medical office buildings, lab space and other properties related to medicine in 30 states and the UK is being offered to be taken over by 4 bidders.

It is estimated that the winning bidder will have to pay at least $3.7 billion for the total package.

The company is a non-traded REIT, meaning it is publically owned, but not traded on a stock exchange. Current offers from the four finalists have topped $12.50 a share, according to people briefed on the price. A deal is expected to be finalized in about 2 weeks.

$21.3 billion of senior housing, skilled nursing facilities and medical office buildings were sold in 2013, up 22% from the previous year, according to RBC Capital Markets. Last year, non-traded REITs returned a record $16.2 billion to investors through listings, sales or mergers, according to Robert A. Stanger & Co., an investment bank that tracks the industry.

(5/9/06)- Himan Brown will donate $1.5 million over a 4 year period of time, to be used to establish a hospice residence with four studio apartments and two two- bedroom apartments at an assisted-living facility in Manhattan. Mr. Brown created and produced some of the old radio programs of the 1930's and 1940's that we loved so much. Among them were "The Adventures of the Thin Man", and the "Inner Sanctum Mysteries".

Mr. Brown's wife Shirley passed away from cancer in 1991. She spent the last few months of her life at home, and Mr. Brown wanted to create the same type of atmosphere for others who had terminal illnesses. He was introduced to officials of the Visiting Nurse service, a group that provides medical care and related services to people in their homes. The organization was co-founded by Lillian Wald in 1893.

"People should die with dignity" said Mr. Brown, and this was one way to help this occur.

(1/13/06)- Brookdale Senior Living Inc announced that it had signed a definitive agreement to purchase 18 assisted living facilities from The Wellington Group LLC for $95 million. Those 18 facilities have a total of 944 beds, and they are located in Alabama, California, Florida, Georgia, Mississippi and Tennessee.

The portfolio is divided into 14 owned and 4 leased properties. Healthcare Realty Trust Inc. will continue to own the 4 leased facilities. The deal is expected to close at the end of the first quarter this year.

Since its initial public offering in November 2005, Brookdale has purchased or has committed to purchase $409 million in senior housing facilities representing 5,789 units/beds. The company owns and operates independent, assisted and dementia-care facilities, with a total of 383 facilities in 31 states, and the ability to serve over 30,000 residents.

(2/18/05)-Governor George Pataki (Rep.) signed into law a bill that places strict licensing regulations on the assisted living industry in New York State. The law went into effect in February 2005. Federal laws regulate the nursing home industry, but there are no federal laws governing assisted living facilities.

Presently there are 36 states that have some form of regulation of the assisted living facilities. Under the new law, state health officials must license all assisted living facilities. The law sets up different levels for certifications for different types of assisted living facilities. The basic license is for assisted living facilities where the residents need help with personal tasks such as bathing, dressing and managing medications, but who are not confined to bed or in need of round-the-clock nursing care.

Facilities that want to accept people who may need 24-hour care or are incontinent, unable to walk without assistance or depend on medical equipment must apply for another certificate that authorizes them to offer "enhanced assisted living." Homes for dementia patients must have another special certificate.

The new law requires an assisted living facility to give each resident an individual service plan, that has to be updated every 6 months. The plan must indicate what will be provided to the resident, how and by whom. The contract for the resident must by in plain language and fully disclose fees and policies.

(6/28/04)-The Wall Street Journal recently had an article dealing with placing loved ones in assisted living facility for short term stay so that the caregiver could get a respite for a short period of time. Many assisted living facilities welcome even a "short stay" visitor to help fill their vacancies. The article entitled "Taking a Vacation At a Nursing Home" also included material about how some nursing homes are also now accepting "short stay" guests to fill their room vacancies.

According to the National Alliance for Caregiving about 22.4 million households now have someone caring for a senior. These short-term stays in an assisted living facility or a nursing home can serve two purposes. On the one hand it gives the caregiver a break so as to be able to have some time solely for themselves, while at the same time it gives the elderly person an opportunity to be exposed to an assisted living facility.

We at therubins do not feel it is appropriate to put a relative in a nursing home only as a short term test, because the resident, knowing that it is only for a short term stay will not be comfortable with the nursing home. This will make it even more difficult if the time arises that you are forced to put the relative in a nursing home.

On the other hand we feel it can be a good way of testing a prospective assisted living facility. Though Medicare and regular insurance will not pay for these short-term stays, long-term care insurance policies will usually cover it, as long as the insured fulfills the same eligibility requirements of the policy. This means that the insured has to be unable to do at least two of the so-called activities of daily living. The policy will usually cover up to 21 days of respite care per year.

There are a few governmental programs that offer assistance in this area. The federal Administration on Aging allocates some money to state and local agencies for this purpose. The Family Caregiver Alliance in California administers a program that gives families grants of as much as $3,600 to help cover a year's worth of respite care, regardless of income. The Lifespan Respite Care Act , which would authorize $90.5 million in grants to community respite care programs, recently passed the Senate and is pending in the House.

Long term nursing care facilities feel under great pressure to meet their financial obligations, and as a result are finding it harder to obtain staff because of the financial strain. In our fact-finding tour through Florida, we found one well managed, long term care facility, which omitted a staff token raise of 25 cents per hour, something they have been doing for years. These were staff members who had been employed for over ten years. These dedicated workers were thinking of seeking work outside of the healthcare industry.

Now in our tour through Wyoming, we have found that 11 out of 38 long-term care facilities are in Chapter 11 bankruptcy. The Wyoming State Joint Labor, Health and Social Service Committee has begun a study of long-term care market and the financial ability of the state to pay for services that will be needed. Wyoming’s Medicaid program is one of the most conservative in the nation and ranks 45th among the 50 states.

According to the statistics we obtained, Wyoming nursing homes had 2772 residents, including 1704 on Medicaid (61.5% of the residents), 407 on Medicare (14.7% of the residents), 661 residents paid for their care with private insurance or personal funds. The total population of Wyoming is nearing 500,000, meaning that less than 0.5% of the residents are in nursing homes.

Dan Lex, executive director of Quality Health Care Foundation of Wyoming, said 12 of the 17 long-term care facilities he represents reported a net dollar loss from their operations with the average loss being 10%. He feels that the Medicaid payments are not covering the costs of a majority of the facilities.

The movement is toward assisted-living residences, which house Alzheimer’s patients and elderly people who require help in daily activities. Such settings provide aid that is less intensive-and less costly- than that offered in conventional nursing homes. Recently, Alternative Living Services Inc. agreed to acquire 21 assisted-living residences from HCR Manor Care Inc. for about $200 million. This transaction is part of a broader alliance announced by the two companies to spend as much as $500 million constructing new assisted-living residences.

In order to meet the growing needs of the elderly for long term care facilities, the US Department of Health and Human Services had asked states to look at community-based alternatives for nursing home residents who do not need full care. This is one of the reasons for the need for assisted-living facilities. This may be appropriate for large cities but what do we do with small communities where these facilities are not available?

Long term nursing care is expensive, ranging from $25,000 to $125,000+ per year depending on what part of the country the nursing home is located. For many it is a financial drain and an unwanted place to be. For others it is the most advantageous and only place to spend the twilight of their life. These places need to be comfortable and affordable without draining a spouse of life savings. No one knows when he or she might be in a position to need such service. Community services are important, but there must be a step-up program so that those who need nursing homes can be provided an immediate space without fear of loss of life's savings.

We have now visited facilities in Massachusetts, New York, Florida, Colorado and Wyoming, all of which are going through a stressful period. As our population ages, we are going to be confronted with a service need that society is not prepared to meet. It appears that the non-profit sites provide better long term nursing care, but even they seek alternative outlets to long term care for financial support i. e. sub-acute care. What is to happen to the frail elderly who need labor intensive medical services after our hospitals deal with the acute exacerbations of their medical condition? Are we prepared for this situation?

Supplement to Long Term Care Nursing Facilities

In President Clinton’s Saturday Sept. 16th radio address he announced he would send legislation to Congress asking for $1 billion in grants to states over the next five years to increase staffing in nursing homes. In our article, "Long Term Care Nursing Facilities", we reported on the nation wide shortage of staff in nursing homes and the precarious financial situation many of them were in. It is another instance of where one of our articles focuses on issues of national importance.

This proposal by the President follows on the heels of a July Congressional report, which attributed some of the medical problems in nursing homes to inadequate staffing. One of the most alarming findings of this report was that 54% of nursing homes fell below an average of two hours a day of personal care for residents by nurses’ aides.

During the coming month, before election time (a time when specific legislation important to Congressional constituents is passed), Congress will consider legislation increasing Medicare reimbursements to nursing homes that were cut in 1997. President Clinton wants his proposal to increase funding for nursing home staffing to be part of this legislation. All this may prove advantageous to the elderly if they continue to make themselves heard.

President Clinton, in his radio address, also identified a problem with nursing homes not paying fines imposed upon them for violation of Medicare rules. He would like the money that is collected from the fines to be used to help offset the cost of training nurses’ aides. The use of the money in this way would seem appropriate only if it doesn’t deprive nursing homes of due process. Legal action of any dispute could be resolved via use of alternative dispute resolution i. e. arbitration, with a finite date of completion of action on each fine. Programs like this have worked in other sectors.

Another proposal in his radio address dealt with posting quantitative detailed information on the Internet about the nature of the staffing provided in each nursing home at different times of day. Such information is more specific but not dissimilar to the information presently posted on the Internet on over 600,000 physicians and 5000 hospitals. As we stated in our article on "How to Select a Nursing Home", this kind of information is helpful in nursing home selection. Much of this information is already available in nursing homes statistical reports and will involve retooling present statistic collection methods at minimal costs. It is time to share it with the public, so the potential users of these facilities can make informed decisions.

The important element in all this legislation would appear to be detailing the guidelines to be followed by nursing homes, not using such ambiguous terminology as "the highest practical physical, mental and psychosocial well-being" as used in the 1997 federal law outlining staffing requirements. There is no question that conditions vary from state to state and from cosmopolitan to suburban to rural areas, which may have to be taken into consideration when the guidelines are developed. Any delay in the development of guidelines will continue to muddy the nursing home issue and result in lowered levels of care to a needy population.

Politics be damned, bipartisan action is called for immediately in nursing home care of residents. It is an area that will probably touch everyone in our society at one time or another. Delay can only make the situation worse.

FOR AN INFORMATIVE AND PERSONAL ARTICLE ON PRACTICAL SUGGESTIONS WHEN SELECTING A NURSING HOME SEE OUR ARTICLE "How to Select a Nursing Home"

Allan and Harold Rubin, MS, ABD, CRC, Guest Lecturer
updated May 11, 2014

http://www.therubins.com

e-mail: hrubin12@nyc.rr.com orallanrubin4@gmail.com

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