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

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TRENDS IN LONG-TERM CARE TUESDAY, JANUARY 21, 1975 U.S. SENATE, SUBCOMMITTEE ON LONG-TERM CARE OF THE SPECIAL COMrMITTEE ON AGING, New York, N.Y. The subcommittee met, pursuant to notice, at 10 a.m., at 14 Vesey Street, New York County Lawyers Association, New York, N.Y., Hon. Frank E. Moss, chairman, presid<strong>in</strong>g. Present: Senator Moss and Congressman Edward I. Koch, a Representative from the State of New York. Also present: William E. Oriol, staff director; Val J. Halamandaris, associate counsel; John Edie, professional staff member; John Guy Miller, m<strong>in</strong>ority staff director; Patricia G. Oriol, chief clerk; and Kay Dann and Dona Hopper, clerks. OPENING STATEMENT BY SENATOR FRANK E. MOSS, CHAIRMAN Senator Moss. This hear<strong>in</strong>g will come to order. Those who are stand<strong>in</strong>g, please take your seats. This is a hear<strong>in</strong>g of the <strong>Special</strong> <strong>Committee</strong> on Ag<strong>in</strong>g of the U.S. <strong>Senate</strong>, be<strong>in</strong>g conducted by the Subcommittee on <strong>Long</strong>-<strong>Term</strong> <strong>Care</strong>. My name is Frank E. Moss, U.S. Senator, and I am chairman of the Subcommittee on <strong>Long</strong>-<strong>Term</strong> <strong>Care</strong> of the U.S. <strong>Senate</strong>. I welcome all of you here this morn<strong>in</strong>g. We hope that we can run this hear<strong>in</strong>g <strong>in</strong> an expeditious but thorough manner, and we would appreciate as much attention and decorum as we can have here so we can get on with the work that is before us. Many of you may know that I have been <strong>in</strong>vestigat<strong>in</strong>g nurs<strong>in</strong>g home problems, as chairman of this subcommittee, s<strong>in</strong>ce 1963. Look<strong>in</strong>g back, I can see some progress <strong>in</strong> both the availability and the quality of nurs<strong>in</strong>g home care. In 1965 our committee was <strong>in</strong>strumental <strong>in</strong> the enactment of medicare and medicaid. In 1967, I <strong>in</strong>troduced, and the Congress enacted, important reforms requir<strong>in</strong>g nurs<strong>in</strong>g homes funded under Federal programs to meet certa<strong>in</strong> uniform m<strong>in</strong>imum standards. Start<strong>in</strong>g <strong>in</strong> 1969, we began the present series of hear<strong>in</strong>gs, entitl<strong>in</strong>g the series "<strong>Trends</strong> <strong>in</strong> <strong>Long</strong>-<strong>Term</strong> <strong>Care</strong>." This is the 23d hear<strong>in</strong>g <strong>in</strong> that series. The major questions for discussion today are, What's wrong with nurs<strong>in</strong>g homes? Why won't the system work? In the years we have been study<strong>in</strong>g the question we keep f<strong>in</strong>d<strong>in</strong>g five root causes of our problems: (2873)
2874 First. Our Nation and our Federal and State governments have no consistent, coherent policy with respect to treatment of the <strong>in</strong>firm elderly. Second. Physicians avoid nurs<strong>in</strong>g homes; their visits are few and far between. Third. Nurses <strong>in</strong> nurs<strong>in</strong>g homes are few-only 56,000 for all 23,000 homes-which means that 80 to 90 percent of the care is given by untra<strong>in</strong>ed aides and orderlies. Fourth. The present reimbursement formulas employed by the States <strong>in</strong> their medicaid programs conta<strong>in</strong> built-<strong>in</strong> f<strong>in</strong>ancial <strong>in</strong>centives <strong>in</strong> favor of poor care; and f<strong>in</strong>ally, Fifth. The <strong>in</strong>spection and enforcement system is a national farce. These last two po<strong>in</strong>ts provide the major focus of today's hear<strong>in</strong>g. I am <strong>in</strong>terested to learn more about New York's unusual cost-plus reimbursement formula for nurs<strong>in</strong>g homes; frankly, it is enough to make defense contractors drool with envy. It appears to me that almost everyth<strong>in</strong>g is covered; even legal fees to fight the health department are reimbursable. I can't imag<strong>in</strong>e a formula which is better tailored to the <strong>in</strong>dustry's self-<strong>in</strong>terest. The message your legislature has given the operators is clear: Spend, spend, and spend. For whatever you spend, you will be reimbursed with a profit. This leads to the unwholesome situation of nurs<strong>in</strong>g home after nurs<strong>in</strong>g home runn<strong>in</strong>g <strong>in</strong> the red and even show<strong>in</strong>g what is called negative equity computation, while pay<strong>in</strong>g vast sums <strong>in</strong> salaries or rent very often to friends and relatives. Also of <strong>in</strong>terest is the process which sees nurs<strong>in</strong>g home after nurs<strong>in</strong>g home cont<strong>in</strong>ually sold and repurchased among <strong>in</strong>terconnected corporations. The purpose of such "boomerang purchases" apparently is solely to <strong>in</strong>crease the sell<strong>in</strong>g price and hence the value of the property. S<strong>in</strong>ce cost-plus <strong>in</strong> New York means 10 percent profit computed on the operators' value or equity, the operators are tempted to <strong>in</strong>flate that equity. I have also been told that the State of New York has only 16 auditors for 16,000 health care facilities. Furthermore, if a nurs<strong>in</strong>g home's books are so jumbled that they are un<strong>in</strong>telligible, the penalty is only that it is paid the average reimbursement paid by the States to nurs<strong>in</strong>g homes <strong>in</strong> its size and geographical area. Some penalty. The questions I have raised highlight the importance of today's hear<strong>in</strong>gs. By act of Congress, all States must have cost-related reimbursement for their medicaid nurs<strong>in</strong>g homes <strong>in</strong> effect not later than January 1977. What we have already learned is that New York may demonstrate that we are mov<strong>in</strong>g 180 degrees <strong>in</strong> the wrong direction. There are of course other issues which should merit our attention: The fragmentation of responsibility for <strong>in</strong>spections so that everyone and no one is responsible; the fact that <strong>in</strong>spectors are too few or untra<strong>in</strong>ed or that their recommendations are too often ignored. To what extent does political <strong>in</strong>fluence serve to keep substandard homes open? Who owns New York's homes, and what are the consequences? Is organized crime <strong>in</strong>volved? To date the subcommittee has issued some 4.5 subpeiuis for this hear<strong>in</strong>g <strong>in</strong> an effort to answer some of these questions. lVitneses will
Page 1 and 2: TRENDS IN LONG-TERM CARE 45-716 0 H
Page 3: CONTENTS 'Page Openin</stro
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 and 38: 2905 to perhaps crowd more patients
Page 39 and 40: 2907 Senator Moss. I wonder if, s<s
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
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2931 UNITED STATES OF AMERICA QCong
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2933 submit it, and we will see tha
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2935 No impropriety of any k<strong
Page 69 and 70:
2937 Did I understand you to say th
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2939 made clear we were submitt<str
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2941 Senator Moss. Thank you. I wou
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2943 was married, I thin</s
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2945 Rochdale Park, not known to me
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2947 Dr. BERGu.rAN1. No. not plesen
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ado . 2949 Dr. 3EoG31AN. Very rarel
Page 83 and 84:
2951 A couple of housekeepi
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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
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APPENDIXES Appendix 1 LETTERS RELAT
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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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