As Nursing Home Industry Fights Life-Saving Minimum Staffing Rule, Top Industry Executives Were Paid Tens of Millions of Dollars

September 16, 2024

As Nursing Home Industry Fights Life-Saving Minimum Staffing Rule, Top Industry Executives Were Paid Tens of Millions of Dollars

Rule Would Save 13,0000 Lives Annually; New SEC Filings Reveal Nursing Home Executives Were Paid Nearly $70 Million in 2023.

"The basis of your opposition to minimum staffing standards appears to be quite simple: greed."

Text of Letter (PDF)

Washington, D.C. - Today, U.S.Senator Elizabeth Warren (D-Mass.), along with Senators Bernie Sanders (D-VT) and Richard Blumenthal (D-Conn) and Rep. Jan Schakowsky (D-IL), wrote to the CEOs of three major nursing homes, Brookdale Senior Living, Ensign Group, and National HealthCare, rebutting industry claims that nursing homes can't afford to meet new minimum staffing requirements put in place by a Biden-Harris administration policy.

This rule would have an extraordinary impact on nursing homes residents, saving 13,000 lives per year. But the nursing home industry is staunchly opposed. While company executives argue they cannot afford to hire more nursing home staff, new SEC filings show that CEOs for three of the largest publicly-traded nursing homes were paid nearly $70 million in 2023. That comes on top of a staggering $650 million in dividends, buybacks, and compensation paid out to top shareholders and executives between 2018 and 2022.

"It is insulting that the for-profit nursing home industry, which receives billions of taxpayer dollars annually to run its operations, appears to prefer lining the pockets of its executives and shareholders rather than creating sustainable working conditions for nurses and staff," wrote the lawmakers. "The basis of your opposition to minimum staffing standards appears to be quite simple: greed."

For years, the nursing home industry has had a chronic inability to provide good pay and working conditions for nursing home staff. In fact, the average nursing home loses more than half of its nursing staff within a year due to poor pay, lack of benefits, high workloads, inadequate training, poor management, and lack of career advancement. To top it off, the workloads of nurses and other nursing home staff are far too high: on average, certified nurse assistants (CNAs) in nursing homes provide care to 13 residents per shift, with 1 in 10 CNAs in the United States responsible for 19 or more residents at a time.

"These conditions make it impossible to provide high-quality care and create a vicious cycle in which nursing homes with higher staff turnover contribute to poor nursing home conditions, leading to even more turnover," wrote the senators. "All the while, executives get rich - regardless of whether the nursing homes they oversee provide high-quality care."

The new SEC filings show that these companies collectively increased their executive pay by nearly 25 percent just last year, and reported record-high profits in the first two quarters of 2024. These data reveal that these companies have the money available to provide high-quality care - but instead are using it to enrich themselves.

Implementation of President Biden's new minimum staffing standard will save 13,000 lives annually; yet, industry opposition to this rule continues, and a Congressional Review Act (CRA) resolution to overturn it may come up in the Senate imminently.

Senator Warren has led the fight for stricter oversight of nursing homes and increased transparency:

• In July 2024, Senator Warren released a new analysis, conducted by researchers at the University of Pennsylvania, which finds that President Biden's rule setting minimum staffing standards in nursing homes across the U.S. would save approximately 13,000 lives per year.
• In July 2024, Senator Warren and Representative Schakowsky (D-Ill.) sent a letter to two of the largest trade associations representing the nursing home industry slamming them for opposing CMS's final nursing home staffing rule.
• In June 2024, Senators Warren and Ed Markey (D-Mass.) introduced the Corporate Crimes Against Health Care Act of 2024 to root out corporate greed and private equity abuse in the health care system.
• In May 2024, at a hearing of the Senate Committee on Finance, Senator Warren questioned Michael Topchik, M.A., executive director for the Chartis Center for Rural Health, on the impact of the Centers for Medicare & Medicaid Services (CMS) newly-finalized minimum staffing rule on quality of care and called out private insurers in Medicare Advantage (MA) for their greedy - and often unlawful - payment practices that threaten to shut down rural hospitals nationwide, blocking seniors from getting the care they need.
• In May 2024, Senators Warren, Richard Blumenthal (D-Conn.), and Bernie Sanders (I-Vt.), along with U.S. Representatives Lloyd Doggett (D-Texas) and Schakowsky sent letters to three of the largest public, for-profit nursing homes in the country - Brookdale Senior Living, Ensign Group, and National HealthCare Corporation - highlighting the discrepancy between their opposition to a CMS proposal to set minimum staffing levels for nursing homes, and the industry's massive payouts in buyouts, dividends, and salaries to executives and shareholders, totaling almost $650 million dollars since 2018.
• In April 2024, at a hearing of the Senate Special Committee on Aging, Senator Warren highlighted the impact of low staffing levels on quality of care in nursing homes. As of the time of the hearing, CMS was finalizing the rule that would require every nursing home to have a sufficient number of staff on hand to protect and care for residents.
• In November 2023, Senators Warren, Blumenthal, and Sanders released a new report: Residents at Risk: Quality of Care Problems in Understaffed Nursing Homes and the Need for a New Federal Nursing Home Staffing Standard. The report revealed that, across a broad range of health outcomes, nursing homes with higher staffing levels that meet the requirements in the CMS proposed rule provide higher quality care than homes with lower staffing levels.
• In May 2023, at a hearing of the Senate Special Committee on Aging, Senator Warren called out corporate owners of nursing homes, including private equity firms and Real Estate Investment Trusts (REITs), for their failures to protect patient safety and use of complex legal arrangements to avoid regulatory scrutiny.
• In May 2023, Senators Warren, Chuck Grassley (R-Iowa), and Bob Casey (D-Pa.) and Representatives Lloyd Doggett (D-Texas) and Katie Porter (D-Calif.) sent a bipartisan letter to Health and Human Services (HHS) Secretary Xavier Becerra and CMS Administrator Chiquita Brooks-LaSure, calling on CMS to strengthen and finalize its proposed rule to make nursing home ownership more transparent.
• In December 2022, a Government Accountability Office (GAO) report requested by Senators Warren and Ed Markey (D-Mass.) found increases in both the number and the severity of care deficiencies cited at State Veterans Homes (SVHs) across the nation, citing an increase "from 424 in 2019 to 766 in 2021."
• In May 2022, Senator Warren and lawmakers sent a letter to private equity giant KKR for the grossly substandard care and unsafe living conditions in group homes it owned for people with intellectual and developmental disabilities.
• In February 2022, testifying before the Senate Budget Committee, Senator Warren called out private equity firms' predatory practices of buying up distressed companies; stripping workers of benefits, fair pay, and safe working conditions, and reaping billions in profits. She noted that research shows that private equity ownership of nursing homes led to a 10% jump in short-term mortality rates.
• In August 2021, Senator Warren and lawmakers launched an investigation into private equity ownership of for-profit hospice companies and subsequent reductions in the quality of care.
• In March 2021, Senator Warren released Genesis's response to her January 2021 letter and sent a letter to the company, revealing new information that the company CEO - who left the company in near bankruptcy in January 2021 - has been awarded $8 million in salary and bonuses since the start of the pandemic. Senator Warren raised new questions about why the company lavishly rewarded its CEO after more than 2,800 of its residents died of COVID-19 and despite the fact that he left the company in dire financial conditions.
• In November 2019, Senators Warren and Sherrod Brown (D-Ohio), and Representative Mark Pocan (D-Wisc.) wrote to four private equity firms that invested in companies providing nursing home care and other long-term care services, citing reports that show private equity investment has played a role in the declining quality of care in nursing homes and requesting information about each firms' management of this sector.

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