When the plane had climbed to 13,500 feet, I checked the wind one final time and nodded to the pilot. Then, with the usual mixture of terror and exhilaration, I slowly pushed off the wing mount and into the stuff of dreams. Within ten seconds my body had reached terminal velocity, the speed at which air resistance equals the force of gravity. I was in free fall.
Unfortunately, human language skills – only 160,000 years old – are inadequate to describe my experience during the next minute, but sufficient to say that I now understand why sky divers routinely risk their lives for those precious sixty seconds. I broke the free fall 3,800 feet above the target or “jump run” by deploying my pilot chute, which in turn caused my main canopy to unfold and grab a piece of the early morning sky. As my feet touched solid ground, I pondered the realization that I was now irrevocably stuck between earth and the heavens.
For a moment, let’s imagine another scenario. One in which something goes wrong.
Same skydiver, same free fall. But this time, when he reaches for his pilot chute to deploy the main canopy, he discovers to his horror that there is no chute assembly. No pilot chute, no primary chute and no reserve. There is only panic. And waiting. In his last moments of consciousness, hurtling toward a Mobil Mart at 160 miles/hour, he glances skyward. Planes as far as the eye can see. Jumpers leaping through twin-prop bay doors fill the air like locusts; their numbers so great they virtually block out the sun. He wonders how his obituary will read, as the sky rains a steady downpour of terror and flailing limbs.
And not a parachute among them.
The American long-term health care system is caught in an uncontrolled free fall – plunging to earth in a death spiral. And each day, thousands of individuals – rich and poor, black and white – stand on line at 15,000 feet, sipping a glass of Chardonnay or reading a book, only to find themselves moments later plunging towards earth and their inevitable destiny. And it is all so unnecessary.
There are times, however, when skydiving metaphors let us off the hook. They take us miles from the ugly, nauseating, wretched, truth of what we really do to our chronically ill and our frail elders – and, thus, to each other and ourselves. So I will help us remember. Not from some misguided sense of benevolence, but of necessity. I, too, am one of the walking wounded; a 62 year-old resident of an assisted living facility,
A single drop of perspiration trickled slowly down the right side of his face and into the corner of his eye. He winced at the sting and remained motionless – waiting patiently for his victim. Even he would have chuckled at the thought that this kill – through an ironic twist of history – would ultimately cast him in a major role as a catalyst in the genesis of the nursing home industry. But right now, he had no time for such idle thinking. When the rolling command car turned onto Elm Street – heading for the Stemmons Freeway – he began searching for the specially designed 1961 Lincoln convertible.
Immortality was now moments away.
Today, they would finally understand the depth of his political insight and the nature of his social commitment – the students at PS 117 in the Bronx, the Marine Corps, his mother, Marguerite and brother, Robert, and his wife, Marina Prusakova. He spotted the Lincoln, squeezed off a round, and watched as one of the car’s passengers stiffened and pitched forward in his seat. There would be other bullets, but they were unnecessary; Lee Harvey Oswald had already delivered the intended message.
Two hours and thirty-eight minutes later, Vice President Lyndon Baines Johnson paced nervously aboard Air Force One as it sat on the tarmac at Love Field, Dallas, waiting for the body of his Commander-in-Chief. When the final transition team member boarded the plane, the Vice President – struggling with grief, traumatic anxiety, and chest pains, placed his hand on the King James version of the Bible, and opened a new chapter in American history.
Despite John Fitzgerald Kennedy’s boyish appeal, good looks, and enormous popularity with the American people, Congress refused to take his legislative agenda seriously. In large part, this indifference was the result of his narrow victory (118,000 votes out of some 70 million cast) over Richard M. Nixon, and suspicion that vote fraud may have contributed to the victory (his father’s relationship with Chicago mayoral icon Richard Daley was no secret, and Illinois had proven critical to Kennedy’s win).
And while it’s true that Kennedy would never live to see his “New Frontier” embraced by Congress, in a speech on May 22, 1964, President Johnson simultaneously handed off the Kennedy torch and brought flame to his own when he said, “We have the opportunity to move not only towards the rich society, and the powerful society, but towards the Great Society that demands an end to poverty and racial injustice, to which we are totally committed in our time.”
Some would say the Great Society was, in fact, John Kennedy’s New Frontier in different packaging. But this time, Congress was dealing with “one of its own,” and felt it was politically astute to demonstrate its willingness to work with the new president in a time of crisis.
When Johnson first introduced his plans for a Great Society to Congress, it was seen as a bold and sweeping musical score, but the real symphony was yet to come.
After his landslide re-election in November, 1964, he stepped up to the podium, raised his baton, and brought the House (and Senate) to its feet with the remainder of his populist program.
During the next four years, Congress would enact no less than 400 pieces of legislation related to the Great Society, and although it was fellow Democrat, Harry S. Truman, who originally introduced the concept of a Medicare-like program some 20 years earlier during his administration, it was Johnson who would push the legislation through Congress in 1964, followed by Medicaid in 1965 – both as Amendments to the Social Security Act of 1935.
And it was no accident that the Social Security Act (SSA) was the progenitor legislation for the birth of Medicare and Medicaid, the two components of the Great Society that would ultimately fuel the explosive growth of the nursing home industry in the late ’60’s – because contrary to popular belief, it was the SSA that created the industry in the first place.
It was passage of the SSA that prohibited Old Age Assistance (OAA) dollars from going directly to residents in public institutions, thus creating the need for both private and non-private alternatives. In 1950, amendments to the SSA broadened its scope, extended OAA into the public medical institutions. With a stroke of the Executive pen, the creation of the nursing home industry was now complete… and the oldest Baby Boomer was just starting kindergarten.
Much of the long-term care facility expansion in the United States began in earnest around 1970, and was fueled by a real estate investment mentality.
Here, the primary motive was to obtain financing in order to build a facility, operate the facility at a profit while paying down the mortgage, and waiting for the moment when the equity in that facility was sufficient to collateralize a mortgage on a second facility. And so on. The goal, therefore, of the nursing home owner, like any commercial real estate investor, was to find the “tenants” to pay down that debt in order to make this cycle work. In a perfect world, this would ultimately leave the owner with at least two attractive options: s/he could then maintain ownership in a now debt-free perpetual money machine or sell it for a tidy profit in order to invest in another facility and begin the fruitful cycle yet again.
But the real heart of this story is not an analysis of the methods business owners chose to finance the construction of new nursing homes in the late ’60s, nor is it a blanket critique of that industry itself.
The real heart of this story is the tenants.
Skilled nursing facilities quickly became one of the most popular investments in America, fueled by demographics indicating that the aging Baby Boomers’ demand for nursing homes would outstrip supply forever. But there was one small glitch. The states, which finance the care for two-thirds of the nursing home residents through the Medicaid program, didn’t want the expansion. The states had already discovered at great expense, “that when you build a Medicaid bed, someone will fill it.” They decided a line needed to be drawn in the sand, as they could no longer afford (or were unwilling to attempt) to raise taxes sufficient to pay for the rise in care. This fueled the Certificate of Need (CON) revolution – in short, to add a bed to the system, the developer had to prove to the state that there was a need for that bed.
Savvy developers found the CON application a mere speed bump in the development process, while others found the whole business far too Draconian for their tastes, and looked for other development opportunities, such as assisted living facilities. These facilities were less regulated because the states did not provide Medicaid funding for their residents. In fact, as we will later see, the sudden rise in popularity of these facilities was unprecedented. The speed of expansion quickened until supply outstripped demand – unthinkable just 20 years ago.
This sudden “reality check” forced those who subscribed to the investment in real estate mentality to rethink the other end of their profitability equation — expenses. The largest expense after debt service in the nursing home industry is staffing.
The collective decision the nursing home industry made next taught us a valuable lesson: The industry decided that Certified Nursing Assistants(CNAs) – those individuals entrusted with the hands-on care of our nation’s oldest citizens – would receive the same job opportunity as a fast food burger flipper, the primary difference being that the fast food worker generally has more on-the-job training and although they receive the same substandard wage and lack of opportunity, the CNA is responsible for the care and well-being of our parents and grandparents.
These low wages forced the long-term care industry to compete for entry-level staffing. Even the skilled positions, nurses and therapists, received the lowest wages available. The end result of this competition was that the facilities were able to attract and retain two types of people: those that other employers didn’t want and those who genuinely enjoyed caregiving.
The substandard CNA wages, coupled with an untenable top-down management style and a higher-than-average number of on-the-job injuries (usually from lifting without assistance) ultimately created a position the equivalent of the Indian “untouchable” caste.
In retrospect, what effect did the industry’s decision to lower wages in order to stimulate profitability have? A generation of lonely, sick, frail souls had entrusted their care to us, and we let them down. Again. Badly.
Each year the number of nursing home abuse cases, including rape, rises. Each year the number of both civil negligence and criminal manslaughter nursing home cases rises. We have put the lives of young American men and women on the line to protect Somalians who are in less danger than many of our parents and grandparents.
Any way you cut it, the result of the real estate investment mentality has been the commoditization of residents. This was not always the case. There was a time when most facilities were owned and operated by members of the same community. More recently, however, as ownership evolved into large chains of providers, this focus on care was lost. Residents became thought of as real estate tenants who paid rent rather than living beings who needed loving care.
The government, increasingly concerned about the effect this real estate investment mentality was having on residents, intervened by placing more stringent regulations on facility owners, threatening the loss of government funding for non-compliance. But the large nursing home chains would have no part of this carrot-and-stick business. They simply raised rates, putting more downward pressure on an over-stressed and under-funded system. Some owners even left the business entirely, taking other opportunities that offered fewer regulatory headaches. The end result was that nursing home rates rose much more rapidly than general cost of living indices, and less regulated elder care facilities – such as assisted living and continuing care retirement communities — became very attractive.
Providers unable to deliver care with the low funding and government oversight on care were forced out of business. This only exacerbated the problem. As the supply of providers dropped and the need for beds increased, the pressure on the system reinforced the image that the providers weren’t giving the residents adequate care.
The effect of free fall at terminal velocity on the human body is significant. The government funding is inadequate so care suffers. Care suffers so there is more government regulation putting more pressure on the care providers. This added regulation increases administrative expenses. These expenses decrease the profitability of the facility. The decreased profitability limits the affordable funding options to build and operate the facility. This causes the lenders to increase the interest rates on their loans to the facilities. This further decreases the profitability and additional cuts are made in the caring (staffing) portion of expenses. Residents don’t want to pay more for their care because they receive less of it personally.
The problem’s potential solution continues to point to more funding. The inadequate government funding is further reduced because of budget concerns. The faster the private pay rates are increased, the quicker people run out of money and turn to Medicaid to pay for their care. As the gap between private pay rates and Medicaid rates widen, more facilities look to reduce the number of (or eliminate) Medicaid residents. Private pay residents want to avoid the facilities with a high number of Medicaid residents because they find their payments are subsidizing the Medicaid residents’ inadequate funding.
The death spiral continues.