Trends in Long-Term Care - U.S. Senate Special Committee on Aging

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2906 CURRENT ASSETS VS. CURRENT LIABILITIES 12-31-73 25 NURSING HOME OPERATIONS ILOiI IN THOUSANDS OF DOLLARS cX ASSETS LIABILITIES , a p1164.9 146 I-00 CD A B C D E (82.5)
2907 Senator Moss. I wonder if, s<strong>in</strong>ce the reimbursement formula is based on costs, why would these people show negative balances? Mr. LEE. These are total current operat<strong>in</strong>g assets. These are assets versus liabilities, not total assets versus liabilities. Senator Moss. Operat<strong>in</strong>g? Mr. LEE. Yes. Just current liabilities as opposed to current assets. This is not the operat<strong>in</strong>g statement per se. This is the end product of the operat<strong>in</strong>g statement. Senator Moss. Would not this go up <strong>in</strong> any way <strong>in</strong> that reimbursement formula? Mr. LEE. I am not as familiar with that as Terrence is, but I don't know if that affects it. Mr. MOAN. No; this does not affect the. reimbursement formula, except that the <strong>in</strong>stitution that is heavily <strong>in</strong> debt, probably does not have any equity, so, therefore, the equity portion of your reimbursement would be zero, would be negative equity, and would be zero. Mr. HALAMANDARIS. Does this <strong>in</strong>dicate to you that they are milk<strong>in</strong>g the corporations, and <strong>in</strong> effect pull<strong>in</strong>g everyth<strong>in</strong>g they can out of them? Mr. LEE. I would say if somebody pays $260,000 <strong>in</strong>to a bus<strong>in</strong>ess that has this k<strong>in</strong>d of a balance sheet, I would still like to know what they show them to get them to buy <strong>in</strong>to it. Mr. HALAMANDARIS. 'What are you tell<strong>in</strong>g us? Mr. LEE. My po<strong>in</strong>t is simply that they are buy<strong>in</strong>g <strong>in</strong>to a broke bus<strong>in</strong>ess. If you buy <strong>in</strong>to a bus<strong>in</strong>ess with a negative net equity, and if you buy <strong>in</strong>to a bus<strong>in</strong>ess los<strong>in</strong>g money cont<strong>in</strong>uously every year, and the formula for payment is not the normal formula for payment of a private <strong>in</strong>dustry bus<strong>in</strong>ess, but rather a government formula. Mr. HALAMANDARIS. You are suggest<strong>in</strong>g that they are buy<strong>in</strong>g on the basis of the reimbursement formula here now <strong>in</strong> the State of New York, come hell or high water? Mr. LEE. I am suggest<strong>in</strong>g that, and I am also suggest<strong>in</strong>g, I am suggest<strong>in</strong>g that someth<strong>in</strong>g other than this has conv<strong>in</strong>ced them that the nurs<strong>in</strong>g home bus<strong>in</strong>ess is a good bus<strong>in</strong>ess. Mr. HALAMANDARIS. What perhaps? Mr. LEE. I have not the vaguest notion. Mr. HALAMANDARIS. Could you speculate? Mr. LEE. Sure, if there is money to be made, that is why you buy a bus<strong>in</strong>ess. Mr. HALAMANDARIS. If there is money to be made, why does not it show up on this chart? Mr. LEE. I have not the vaguest notion. These are their reports. Mr. HALAMANDARIS. How could they maneuver, and convert profit <strong>in</strong>to liabilities? Mr. LEE. Well, let me give you one or two of the items that show up on this, from the basic formula, let me give those to you rather quickly, if I may. In the case of home No. 8, we have loans to owners and related parties of $202,620 that year. Senator Moss. Loans? Mr. LEE. Yes, sir; loans. In the case of nurs<strong>in</strong>g home H down here, we have, strangely enough, loans of $207,141, from a bus<strong>in</strong>ess that is <strong>in</strong>solvent to related parties.
Page 1 and 2: TRENDS IN LONG-TERM CARE 45-716 0 H
Page 3 and 4: CONTENTS 'Page Openin</stro
Page 5 and 6: 2874 First. Our Nation and our Fede
Page 7 and 8: 2876 Senator Domenici, of New Mexic
Page 9 and 10: 2878 (5) Dealings
Page 11 and 12: 88o Did we leave any out? Mr. HoMFI
Page 13 and 14: 2882 Mr. HALAMIANDARIS. May we have
Page 15 and 16: 2884 designed to secure publicity,
Page 17 and 18: 2886 down at that poin</str
Page 19 and 20: 2888 [The letter referred to above
Page 21 and 22: - HE-2 HE-2 OPERATOR'S STATEMENT OF
Page 23 and 24: 2892 Senator Mloss. Now, equity, is
Page 25 and 26: 2894 It is technically at the actua
Page 27 and 28: 2896 However, there are very few, f
Page 29 and 30: 2897 A year later, she sold it back
Page 31 and 32: 2899 The cost of the sale was $246,
Page 33 and 34: 2901 much the reimbursement formula
Page 35 and 36: 2903 There is no change in<
Page 37: 2905 to perhaps crowd more patients
Page 41 and 42: $23 22 21 I., 19 18 17 16 15 14 2 2
Page 43 and 44: 4duI . LINEN/LAUNDRY COSTS PER BED
Page 45 and 46: 2913 matter, they do act, and they
Page 47 and 48: 2915 Senator Moss. Is that when it
Page 49 and 50: 2917 Food was not covered or <stron
Page 51 and 52: 2919 MS. JARVIS. Yes; I am. Senator
Page 53 and 54: 2921 We went through the rooms, and
Page 55 and 56: 2923 I would like to start with a s
Page 57 and 58: 2925 I do feel that bed rest and th
Page 59 and 60: 2927 Did he do everythin</s
Page 61 and 62: 2929 Rooms that could be used-such
Page 63 and 64: 2931 UNITED STATES OF AMERICA QCong
Page 65 and 66: 2933 submit it, and we will see tha
Page 67 and 68: 2935 No impropriety of any k<strong
Page 69 and 70: 2937 Did I understand you to say th
Page 71 and 72: 2939 made clear we were submitt<str
Page 73 and 74: 2941 Senator Moss. Thank you. I wou
Page 75 and 76: 2943 was married, I thin</s
Page 77 and 78: 2945 Rochdale Park, not known to me
Page 79 and 80: 2947 Dr. BERGu.rAN1. No. not plesen
Page 81 and 82: ado . 2949 Dr. 3EoG31AN. Very rarel
Page 83 and 84: 2951 A couple of housekeepi
Page 85 and 86: 2953 I think we ca
Page 87 and 88: 2955 Congressman KOCH. But give us
Page 89 and 90:
2957 Mr. NAFTALIS. Mr. Bergman, and
Page 91 and 92:
APPENDIXES Appendix 1 LETTERS RELAT
Page 93 and 94:
Appendix 2 BERGMAN FAMILY NURSING H
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1-4 2963 E. Frank Klein</st
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2965 1X. Busincs.s
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2967 includ<strong
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2969 and may be deemed, in<
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2971 On January 31, 1968 First Conn
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2973 Appendix 3 SUBPENAS ISSUED DUR
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2975 UNITED STATES OF AMERICA Congr
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2977 UNITED STATES OF AMERICA iongr
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2981 UNITED STATES OF AMERICA Eongr
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2983 UNITED STATES OF AMERICA onffr
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2989 UNITED STATES OF AMERICA . IIo
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2993 UNITED STATES OF AMERICA Conre
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2997 - UNITED STATES OF AMERICA Con
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3005 UNITED STATES OF AMERICA QCong
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3007 UNITED STATES OF AMERITCA (Con
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3011 UNITED STATES OF AMERICA Ctong
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3013 UNITED STATES OF AMERICA ¢ong
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3015 d. Reason for patient's admiss
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3023 UNITED STATES OF AMERICA Conqr
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3027 UNITED STATES OF AMERICA Conay
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3031 STATE OF NEW YORK OFFICE OF TH
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Appendix 4 LETTER FROM EUGENE HOLLA
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