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

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The 200 to 250 bed, we f<strong>in</strong>d the same situation, $22 per bed versus
$11, and the 250 to 350 bed, we f<strong>in</strong>d $17.50 versus approximately $11.50.
Aga<strong>in</strong>, not too serious. possibly only a 50-percent variance.
Now, we have been told by various people that it costs more to take
care of an old home than it does a newer home, so we said f<strong>in</strong>e.
The age of the homes are down here. Over here we have a 27-yearold
facility. It costs $19.50 a week per bed to take care of that facility,
and it is 27 years old.
Obviously, it costs more to take care of that than it does one that is
younger.
Over here we have a 1-year-old home, which costs $22.50 per week
per bed, which is more than a 27-year-old home.
The costs on these run anywhere from $800 a week for housekeep<strong>in</strong>g
to $5,000 a week for housekeen<strong>in</strong>c per home.
You asked me earlier, Mr. Halamandaris, why might it be profitable
to buy <strong>in</strong>to a nurs<strong>in</strong>g home operation.
We have found one consistency <strong>in</strong> this whole pattern.
If you will notice, there are C's at the top of some of those bars.
That means those services are contracted out to vendors. We are
currently try<strong>in</strong>g to f<strong>in</strong>d out who the vendors are, and if the cost to the
vendors is <strong>in</strong>creas<strong>in</strong>g the cost to the nurs<strong>in</strong>g home, and, if so. why.
Mr. HALAMANDARIS. Have you done a study show<strong>in</strong>g identity of
<strong>in</strong>terests between the vendors and the nurs<strong>in</strong>g home, <strong>in</strong> other words,
the same people own both?
Mr. LEE. We have several <strong>in</strong>stances of that, but we have more, to
the po<strong>in</strong>t, I th<strong>in</strong>k you may have seen earlier. we have found a strange
set of patterns, where certa<strong>in</strong> vendors are deal<strong>in</strong>g with certa<strong>in</strong> nurs<strong>in</strong>g
homes.
If you have four vendors show<strong>in</strong>g at one nurs<strong>in</strong>g home, you have
the same vendors show<strong>in</strong>g up at a second. and the same show<strong>in</strong>g up at
a third, fourth. and so forth.
Now, it would be f<strong>in</strong>e if these vendors were deal<strong>in</strong>g across the <strong>in</strong>dustry,
we would have no question about it, but why are they selective?
We do not know. It is a fairly simple question. I am not answer<strong>in</strong>g
it. I am just ask<strong>in</strong>g it.
We have one here deal<strong>in</strong>g with every home. No questions asked.
Obviously they are nurs<strong>in</strong>g homes across the board.
What makes them preferable to the others, or the others preferable
to them?
I have no answers. I have only questions. It is up to you gentlemen
to get the answers.
Senator Moss. Does the department of health do any <strong>in</strong>spection of,
or regulat<strong>in</strong>g of vendors?
Mr. LEE. It is not <strong>in</strong> their mandate, sir.
Senator Moss. It is not?
Mr. LEE. No, sir.
Mr. HALAMANDARiS. Does anybody regulate them?
Mr. LEE. Does anybody regulate them?
Mr. HALAMANDARIS. Yes.
Mr. LEE. I understand the operators try to.
Mr. HALAMANDARIS. The operators try to?
Mr. LEE. Yes, sir. Let me give you one other example of this type of
potential, and that is, these are the laundry and l<strong>in</strong>en costs per bed
per week, for the same variety of nurs<strong>in</strong>g homes, from 50 up to 350
beds, <strong>in</strong> group<strong>in</strong>gs of 50.