Beverly Enterprises : For Nursing Homes, Big Isn’t Best

On the surface, the nursing home seemed pleasant enough. The lawns were carefully trimmed, and the floors were polished to a high gloss.

But beneath the surface, the Oak Meadows Nursing Center in the San Jose suburb of Los Gatos festered with health care problems. Three years ago, state health inspectors charged that the home’s negligence contributed to the deaths of four patients, one of whom died after “crater-like . . . foul-smelling” bedsores poisoned her blood.

Then this winter, health officials revoked Oak Meadows’ license after accusing the staff of patient neglect as well as falsification of medical records. That prompted the sale in February of the facility by its longtime owner, Beverly Enterprises Inc.--the largest nursing home chain in the nation.

‘An Atrocity’

Conditions at Oak Meadows were described as “an atrocity” by Mary Louise Mock, head of the California Department of Health Services’ licensing office in San Jose, especially because “(Beverly) is not a little . . . mom and pop (company) that has no resources. It’s a billion-dollar corporation.”

Beverly Enterprises is, in fact, a company that takes in more than $2 billion in revenue annually, two-thirds of it in public funds. Headquartered in Pasadena, Beverly runs one out of every 14 nursing homes in the United States. Its 1,052 facilities house more than 100,000 patients.

But, as illustrated by the Oak Meadows experience and dozens of others, Beverly’s size has not always translated into quality care. Today, Beverly is on probation in California and in trouble elsewhere.

Health officials have filed reports alleging patient deaths from neglect, rapes of residents, cases of gangrene or amputation caused by infected bedsores and filthy living conditions that included a case in which ants crawled over patients, even entering one woman’s respiratory system through her tracheotomy wound.

Even with such problems, Beverly has shown steady profits until last year when it suffered a pretax loss of $60 million nationwide. Still, Beverly reported $10 million in before-tax profits last year on its approximately 90 California facilities. Analysts are divided over future prospects of the company nationwide, some predicting a quick rebound and others foreseeing a continuation of depressed earnings.

Beverly President David R. Banks said he expects nationwide profits to return later this year. As for the quality of patient care the chain provides, he said:

“We do have some problems. But I would say that 90-plus percent of our facilities do a great job and that we will make sure that the other 5% of the ones that have had some problems will get corrected.”

Health officials say some Beverly homes do provide good patient care--the Royal Oaks home in Galt has been described as among the best in the state--but records show that the chain has repeatedly come under attack for allegedly substandard health care in states across the nation:

- In Washington state, health officials have forbidden Beverly from opening any new homes because of the chain’s bad track record there.

By mid-1987, Beverly had amassed health care fines in Washington that represented half the total for the entire state, according to Mike Wills, a top state health official.

Robert Van Tuyle, Beverly chairman of the board, acknowledged problems in Washington: “We have misjudged our capacity to operate efficiently.”

- In Maine, health officials last year recommended that the company be denied permission to open any homes in the state.

“They just didn’t meet our . . . standards,” said John Dickens, director of projects review in the state Bureau of Medical Services.

Beverly’s Vice President Jack MacDonald said the primary reason Beverly bowed out of the state was for internal financial reasons.

- In Missouri, where half a dozen Beverly facilities have been threatened in the last three years with license revocation, the St. Louis County Grand Jury is investigating allegations of criminal neglect of patients at the Villa Capri nursing home last year while it was under Beverly’s ownership, according to county officials.

The probe follows reports by county inspectors of patients being repeatedly dropped or injured when moved by untrained aides, of gaping bedsores--including one on a man’s hip that measured 8 inches by 5 inches--and of dangerously unhygienic conditions. One patient reportedly was served breakfast while lying in feces.

Beverly officials acknowledged having some problems in Missouri but said they were unaware of any criminal probe.

- In Michigan, where Beverly operated about one-fifth of the state’s nursing homes last year, a Health Department memorandum reported last fall that the chain accounted for almost half the facilities facing denial of Medicaid payments because of substandard patient care.

Beverly officials acknowledge that some of their Michigan nursing homes had problems providing quality care but say that those facilities have been improved and voluntarily sold.

- In Texas, where Beverly operates 134 nursing homes, state officials suspended Medicaid payments to 24 homes in 1986 because of hazardous health deficiencies and revoked the license of one.

MacDonald said Beverly has addressed the problems that were cited and “we’ve been doing a very good job.” Texas officials say the chain’s health care in the state has improved.

- And in California, in what a top health official called a “shot that was heard all around the nation,” Beverly entered into a settlement with the state in October, 1986, in which the chain paid an unprecedented $724,000 in fines and was put on probation. The landmark settlement followed a bitter legal battle in which the state attorney general’s office accused Beverly of providing care so poor that it caused or contributed to the deaths of nine patients.

Beverly remains on probation in California, and company officials acknowledge their continuing concern about the quality of care provided by their homes in this state.

“We’re looking at our entire operation in the state of California as to its performance,” MacDonald said.

Reports Cited

But nationwide, Beverly officials maintain that their homes on the whole are somewhat above average. They base this contention on federal Health Care Financing Administration reports that list only those nursing homes that are in the most serious trouble. According to this data, 7.7% of Beverly’s homes were threatened with loss of federal funding because of poor health care, compared to 9.5% for all homes across the country.

Beverly officials say the company’s problems are symptomatic of the nursing home industry as a whole, which, they complain, is over-regulated and under-reimbursed.

“We pretty well mirror the industry,” Beverly President Banks said.

About 70% of the nation’s nursing homes are operated by for-profit companies such as Beverly. Like other operators, Beverly is reimbursed an average of about $50 per day for providing care to those patients whose bills are paid with government health care dollars.

The biggest expense for the nursing home industry is labor, with 70% of the work force composed of low-skilled, poorly paid nurse’s aides.

“To hold down costs, most of the care is provided by nurse’s aides who in many nursing homes are paid very little, receive relatively little training . . . and are required to care for more residents than they can serve properly,” the Institute of Medicine, a prestigious research organization, noted in a recent report.

Banks said Beverly last year raised wages about 50 cents across the board, costing the company a total of $90 million. He acknowledged that nursing salaries still are not competitive with other health care fields such as hospital work but contended that Beverly cannot afford additional raises.

Meanwhile, a recent survey placed three top Beverly officials on a list of the 100 highest paid executives in California.

$1.3 Million for President

Beverly President Banks, who ranked 21st in the state, received a total of $1.3 million in salary, bonuses and long-term compensation such as stock options during 1986, according to the survey by the consulting firm of Mercer-Meidinger-Hansen. Executive Vice President William M. Wright received more than $1 million, and Chairman Van Tuyle got $776,200, the survey found.

Van Tuyle said the company’s losses last year put a freeze on top salaries and eliminated six-figure bonuses.

Despite the recent losses, company officials say they are trying to upgrade health care in their homes and across the industry. They point to a new joint venture with the Red Cross to develop a national nurse assistant training program, a new $7-million company training center in Atlanta and an expanded internal quality control program.

But so far, a spokesman acknowledged, the company has failed to attain a “consistent level of quality in service.”

It was the discovery in 1985 of poor conditions at Oak Meadows that touched off the dispute between the state and Beverly that, in turn, led to the current scrutiny of the chain’s homes.

The dispute began when state health inspectors compiled a record alleging “horrible patient care” at Oak Meadows and two other San Jose-area nursing homes owned by Beverly, according to Mock, head of the area’s health inspection office.

Inspectors reported that some patients were so neglected that their bedsores had blackened and consumed flesh down to the bone. Numerous and gross medication errors were reported, including a morphine sulfate overdose more than seven times what was prescribed. They noted repeated delays in calling paramedics during emergencies and repeated instances of patients left unattended in urine-soaked beds. Feces was found smeared on bathroom floors and even left on a patient’s bedside meal table.

In two especially shocking documents, inspectors reported that ants had swarmed over the body of one patient at the Julia home in Mountain View and had to be suctioned from the tracheotomy wound of another patient at the facility.

Beverly spokesman MacDonald said, in regard to the ants, “There is another side to that story.” But he declined to elaborate because of the possibility of a lawsuit. As for the other allegations made by inspectors, Beverly officials said they consider them to be closed cases and declined to comment further.

As state officials pursued the license revocations of the three San Jose-area homes, they also denied Beverly’s applications to operate six new nursing homes, touching off a legal battle over the quality of patient care offered by Beverly throughout the state.

‘Something Is Very Wrong’

“Something is very wrong at Beverly Enterprises,” concluded Deputy Atty. Gen. Janet Sherwood in a 1986 legal brief that pointed to more than 50 citations for life-threatening conditions issued to Beverly facilities in California within a 15-month period.

Inspection documents amassed by state officials set forth the allegations against Beverly homes.

For example, a severely retarded, physically helpless woman drowned Dec. 11, 1985, when left unattended in a bathtub of the Lynwood Care Center in Los Angeles County, one of several homes for the developmentally disabled operated by Beverly.

Two elderly patients died at the Oakdale Convalescent Hospital in Stanislaus County in the summer of 1985. One death occurred July 23 when a restraining device to keep the patient in bed was improperly tied around his chest, shoulder and neck, resulting in strangulation when the hospital bed was subsequently cranked up by a staff member.

The other patient died Sept. 18 of complications related to gangrene of the right foot that developed from blackened bedsores.

Even as officials of Beverly and the health department discussed a possible settlement of the dispute in the summer and fall of 1986, an 89-year-old patient at the Beverly Manor Convalescent Hospital on Main Street in Burbank was raped, records show.

And at the Beverly Manor Convalescent Hospital in Panorama City, employees reported hearing a “cracking sound” like “a leg came off” or a “pillowcase ripping” as they lifted a patient to change her sheets. The poorly trained staff, according to a state citation, had fractured the patient’s leg.

Even so, Beverly and the State Department of Health Services reached an agreement Oct. 10, 1986, that allowed Beverly to continue to operate on probationary status the three nursing homes in the San Jose area. The agreement also granted Beverly provisionary licenses to operate six new nursing homes.

Under terms of the settlement, all these facilities will lose their licenses if Beverly homes in the aggregate does not maintain a level of care equal to the average level of care provided by non-Beverly homes throughout the state over two annual grading periods.

Further, Beverly agreed to pay $724,000 to the state, representing 75 cents of every dollar in fines outstanding against the company for health care violations throughout the state. The company admitted there were “grounds for disciplinary action” against some of its facilities but did not admit to any specific charge of wrongdoing.

In interviews with The Times, Beverly declined to comment on allegations of poor health care made before the settlement, maintaining that the cases are closed.

Settlement Criticized

Some critics of the settlement said Beverly was let off too easily.

“Anybody who’s had such a history of providing inadequate care in so many of their facilities, I think that they shouldn’t be allowed to operate,” said Pat McGinnis, executive director of the Bay Area Advocates for Nursing Home Reform in San Francisco. “You don’t have so many people die and so many people suffer . . . and then slap them on the hand. (A penalty of) $600,000 or $1 million to Beverly Enterprises is nothing.”

But Paul H. Keller, chief of field operations for the state health department’s licensing division, defended the settlement.

“I think other states took notice,” Keller said, “that this was . . . a very smart move on California’s part, to hold Beverly’s new licenses hostage while they cleaned up their horror stories.”

But reports compiled by health inspectors show that even after the settlement, the horror stories continued.

Between October, 1986, and October, 1987, health inspectors reported numerous problems, including the following:

At Novato Convalescent Hospital in Northern California, a virtually immobile 93-year-old woman was found suffocated, face-down in her bed, because the nursing staff did not position her to “keep her from rolling over.” The failure of aides to safely prop up the woman--deaf, blind and a double amputee--was cited by investigators as a “a direct proximate cause” of her death.

At the Beverly Manor Convalescent Hospital in Los Altos, a diabetic man with an abnormal blood sugar level was allowed during a three-day period to become dehydrated and fall into a coma before he was finally taken to the hospital. And at a home in Anaheim, a patient lost 20 pounds in two weeks without getting the attention of the staff dietitian.

In Yreka and Chico, health inspectors found that two patients--one 92 years old and bedridden and the other described as “confused” and strapped to a chair--were virtually imprisoned in shower rooms where they were left alone, with the lights off, doors closed, and with no nurse call buttons.

In Yreka, Beverly is paying the attorney fees of a nurse facing abuse charges in connection with the incident. The company fired a nurse in connection with the Chico incident, according to a Beverly spokesman.

Beverly spokesman MacDonald said the company has formally contested most of the citations made by inspectors against its homes since the settlement was signed, and in other instances the chain has presented plans of correction to health officials. He added that he is checking to be sure corrections have actually been made.

But last October, nearly a year after the signing of the landmark settlement, state health inspectors walked into the Beverly Park Convalescent Hospital in Fresno and were stunned by what they saw.

‘Were Just Horrified’

“My . . . staff (members) went in there, and they were just horrified at the conditions that they had found,” recalled Flora Galbraith, district administrator of the state health licensing office in Fresno. “It was sort of overwhelming to them.”

Inspectors compiled 52 pages of health care deficiencies at the facility, resulting in more than $100,000 in fines paid by Beverly.

Beverly spokesman MacDonald said the home’s deficiencies have been corrected since then.

Despite these recurring problems, state officials announced in December that Beverly Enterprises had passed the first of its two annual probationary tests prescribed by the settlement.

The agreement established a complicated rating system to compare the quality of care offered by Beverly to that provided by non-Beverly homes in the state. The system calls for giving points for poor care, with more serious violations given more points than lesser infractions. Theoretically, the higher the score, the worse the home.

Beverly was required, under terms of its probation, to provide a level of care equal to the average care level offered by non-Beverly homes.

After 12 months of scoring the 1,000 nursing homes throughout the state, the evaluation showed that the Beverly facilities in California narrowly passed the first year of probation.

Overall, Beverly compiled an average score of 51.1 points--less than two points better than the 53 points averaged by non-Beverly homes. Some of Beverly’s facilities posted low scores--reflecting what state officials say is relatively good care--while others scored abysmally high.

Nevertheless, state officials appeared pleased. “This is an encouraging progress report,” state Health Director Dr. Kenneth W. Kizer said in a news release.

“We are delighted that we were able to beat the industry average,” added Diane McCarthy, spokeswoman for Beverly’s Western Division.

But nursing home critic McGinnis in San Francisco responded: “If that’s average care, you can imagine what below average is like. . . . The average care in this state is not good.”

What is “average” nursing home care in California?

The 188-bed Beverly Manor Convalescent Hospital on Main Street in Burbank scored 47--or slightly better than the average of 53 points.

During an inspection last year of the home, health officials noted 25 pages of deficiencies. They found half a dozen patients lying in wet beds. One was nude, lying among wet towels and covered only partially by a folded sheet. Some patients needed oral care, while others had crusty eyelids or dried food on their faces. In several cases, the beds had no blankets or spreads. More than a dozen patients had not been given timely physical exams. Medical records were found to be inadequate.

Beverly officials promised health officials they would correct these and other deficiencies.

Evaluation Method Questioned

The reliability of the state’s method of evaluating nursing home care is perhaps most seriously called into question by the scoring of Beverly’s Oak Meadows Convalescent Hospital in Los Gatos--the troubled home in which Beverly’s most serious health care problems first surfaced in 1985.

In March of 1987, state inspectors reported an above-average score of 21 points for Oak Meadows. It appeared to be a clear victory for health officials in their drive to improve patient care there.

But by the end of the year, inspectors revisited the home in response to a patient complaint and were horrified by their findings. In just nine months, Oak Meadows’ score had deteriorated to 200 points.

The home was cited by health officials in December and in January of 1988 for once again neglecting dangerous bedsores. Two patients had to be hospitalized for treatment of their ulcerous flesh. On one, a bedsore cavity beneath the skin measured 15 cubic inches.

Another patient had to be hospitalized to have a soft contact lens surgically removed because--contrary to a doctor’s orders to clean the lens daily--the nursing home staff had left it in her eye for three months and covered up the neglect by falsifying treatment records, according to health inspectors’ reports.

Inspectors cited Oak Meadows for “numerous medication errors” and a “practice of blatant repeated falsification of treatment records. . . . “

Beverly was fined $124,000 for the new round of violations at Oak Meadows--and this time the state followed through with its threat to revoke the facility’s license.

Beverly sold Oak Meadows in February but continues to operate 86 homes in the state.

COMPARING BEVERLY WITH NURSING HOMES IN CALIFORNIA SELECTED EXPENSES IN CALIFORNIA

Total Total Expense Per BEVERLY Nonprofit For-Profit Patient Day ENTERPRISES Facilities Facilities Housekeeping $2.09 $2.44 $2.05 Dietary Serv. $5.27 $8.09 $5.79 Social Serv. $0.85 $1.15 $0.76 Admin. $6.29 $7.76 $7.26 Nursing $21.06 $27.52 $19.84 TOTAL $35.56 $46.96 $35.70

WAGES IN CALIFORNIA

Registered $10.19 $10.93 $10.57 Nurses Hourly Rate Nurse’s Aide $4.70 $4.93 $4.52

* Source: 1985 data from the California Office of Statewide Health Planning & Development PROFITS IN CALIFORNIA

Total Total BEVERLY Nonprofit For-Profit ENTERPRISES Facilities Facilities Net Pre-Tax Income Per Patient Day +$4.62 -$2.50 +$1.88

Total Total BEVERLY Nonprofit For-Profit ENTERPRISES Facilities Facilities Net Pre-Tax Income Per Health-Care Revenue 9.68% -4.06% 3.85% Number of Facilities 90 173 1,029