The Nursing-Home Scandal
Something is seriously wrong in the nursing-home system in California. That is evident in the reports by Claire Spiegel and John Hurst published in The Times in recent days. In extreme cases, negligence has led to death. Some institutions have long histories of non-compliance but remain licensed. Others show no consistency in their operations, meeting state standards one day and being woefully in violation when next inspected.
Particularly troubling is the ability of some operators, including Beverly Enterprises, the largest operator in the nation, to generate substantial profits from individual homes while at the same time providing substandard care. A majority of the nursing homes in the state are run by for-profit companies. A majority of their patients are state-funded under the Medi-Cal program. There appears to be an unresolved conflict between the pressures for profit and the incentives for quality care.
Reform is a state responsibility, for it is the state that is the primary inspector, the primary enforcer of regulations, and the source of funding through Medi-Cal for a majority of the patients. If there is to be a solution, it must come from Sacramento, reinforced by higher standards imposed from Washington on all Medicaid programs, not just Medi-Cal. The problems are not California’s alone, but California appears to have more than its share.
A conspicuous weakness is poor enforcement. More frequent inspections would help. But a more basic problem is that the system is slow to impose sanctions. Fines and penalties can be waived in some cases, including cases of negligent patient care. Because facilities are operating near capacity, the state is reluctant to close down those with histories of violations. There are incentives for prolonged litigation, with the operators allowed to pass on to Medi-Cal the legal fees involved in the appeals process. Clearly, streamlined procedures are required to ensure prompt redress of problems while protecting the patients.
There is a fundamental debate on the way California compensates the nursing homes. Flat fees are paid on a per-capita basis for Medi-Cal patients. This has served to keep per-patient costs among the lowest in the nation, and to keep administrative costs low. But there is no incentive to improve the quality of personnel and the quality of care. And there is no mechanism for holding individual nursing-home operators accountable for how they spent public funds intended for patient care. The state is now studying a new base for compensating the nursing homes. It will be useful only if it addresses the problem of quality, even if that means higher administrative costs.
This is a problem that will grow as the population of the nation ages. That fact alone demands an urgent response from state leaders.
