The Failures of For-Profit Nursing Homes
The Centers for Medicare & Medicaid Services recently published a report analyzing approximately 16,000 nursing homes in this country and assigned each a rating – from one star to five stars - based on such criteria as health inspections and staffing.
In a less prolific blow then the other shots to the head delivered in 2008 to the theory that an unfettered free market is always the best answer, approximately 27 percent of for profit homes surveyed were given one star, versus 13 percent of non-profit homes. At the top of the nursing home food chain, 19% of non-profit homes were awarded five stars, compared with 9 percent of for profit homes. From this pretty overwhelming data, it is hard to argue that for profit nursing homes provide an equal level of nursing home care to that of non-profit homes. While I am not sure what the profit to non-profit nursing home ratio is in Maryland, I don’t think this conclusion shocks a single Maryland nursing home lawyer. The vast majority of Maryland nursing home cases are against private, for profit nursing homes.
As far as economic systems go, capitalism is approximately one trillion times better than socialism. But providing this one-size-fits-all axiom to every microeconomic equation is going to lead to error. Why does it seem to fail for nursing homes? I don’t know. But my hypothesis is that nursing homes that operate for profit focus too much on the for profit side of the equation at the expense of the patient.
Now, if this logic holds up for all health care related fields, we should have every health care provider and ever pharmaceutical company set up as a non-profit. I think such a system would be a complete disaster.
So why are nursing homes different? Well, I think the free market economy works best when there are natural transparent ways for checks and balances. When a drug fails its recipients, the drug company can expect two things: lawsuits and media coverage which harm profitability. Nursing homes that neglect and abuse the people entrusted to them too often slip by unscathed so they do not spend the time, effort and money to create the systems to prevent inadequate care.
