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Corporate Accountability

Published on June 7th, 2015

The Boston Globe reported the pattern of problems with the care provided by Synergy Health Centers.  State inspection reports of Synergy’s nursing homes routinely show striking increases in problems since the company arrived in Massachusetts.  Synergy’s expansion in Massachusetts has been rapid — the chain has purchased 10 nursing homes since December 2012 — and with the expansion have come complaints.

For example, the adult diapers supplied by the new owners were so flimsy they left elderly residents soaked in urine. A representative from the state ombudsman’s office insisted that the owner of the nursing home buy a better brand.  The decline has been especially striking at New England Health Center in Sunderland, where families of residents complain about tepid meals, a lack of fresh fruit, insufficient nursing staff, spotty dental care, and questionable treatment for pressure sores.  At Braemoor Health Center in Brockton, which had a blemish-free state review before Synergy took over, health inspectors have been summoned three times in the past year. They found lax infection control, among other concerns, and the nursing home was ordered to make improvements.   In one home, a patient’s pressure sores were neglected for weeks. In another, racks of dishes and utensils floated in dirty water just before they were used to serve food. And in a third, there were not enough nurses.

The Centers for Medicare & Medicaid Services, which shares oversight of nursing homes with state health officials, determined that nurse staffing levels — particularly certified nursing assistants, who provide much of the hands-on care — were not sufficient to meet the needs of patients. And several of the benchmarks that regulators use to measure overall quality of care had slipped, with a growing percentage of the facility’s patients developing pressure sores and urinary tract infections and receiving powerful antipsychotic medications, despite federal warnings about potentially fatal side effects of such medicines for older people with dementia.

At the same time, Synergy’s nursing homes are paying hefty “administrative fees” to “related companies”, which are also owned by Synergy’s founders and chief executives, the company’s financial reports for Sunderland and Brockton indicate. That structure has become increasingly common among nursing home chains, a practice that elder advocates say decreases quality of care and prevent accountability.  The Synergy experience underscores the increasing reach of corporate chains in nursing care and the mounting concerns of patient advocates about the quality of their services.

Annual financial reports from nursing homes open one of the few windows onto the murky inner-workings of such companies, particularly privately held ones such as Synergy. These reports, which the companies must submit to state regulators, require them to detail information about their facilities and list expenses, including the constellation of fees they pay to related companies.

Chains nationwide are increasingly using such fees to shift money to subsidiary companies, shielding nursing home profits if they are sued, said lawyers who represent patients who are harmed. But the accounting practice, they said, makes it hard to track how much money nursing homes are spending on care.

Chains “siphon money away that can be better served and used for the care of the residents and training of staff, and for more staff and supplies,” said David Hoey, a North Reading attorney who has cited this issue in successful lawsuits against nursing homes.  “They will have a realty company, a management company, an employment company that hires the staff, and specialized companies for physical therapy and occupational therapy. It’s a shell game,” said Kris Sobczak, a law partner of Hoey’s.

Genesis HealthCare, one of the nation’s largest nursing home chains, bought competitor Sun Healthcare Group in late 2012, acquiring more than a dozen Massachusetts nursing homes. An uproar soon followed among its Massachusetts employees over the company’s “poverty wages” and unaffordable health care, according to caregivers.

Charlene Harrington, a professor emeritus of sociology and nursing at the University of California San Francisco has studied nursing home oversight issues for more than a decade and has concluded that the system is broken.

“The fact is we don’t have a transparent system and the accountability is ridiculous,” Harrington said. “We are paying billions of dollars out with very little accountability.”

Joe Pioletti
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