Skilled Healthcare Group's profits increase dramatically

Shares of Skilled Healthcare Group Inc. surged after the nursing facility operator said its profit rose 29 percent in the first quarter, exceeding Wall Street forecasts.  The Foothill Ranch, Calif., company said revenue grew at its skilled nursing and assisted living business and its ancillary service business, which provides hospice and rehabilitation therapy services. Its profit rose to $10.9 million, or 29 cents per share, and revenue grew 5 percent to $189.5 million.

Reuters says analysts were expecting 27 cents per share and revenue of $194.2 million in revenue. Skilled Healthcare stock climbed 84 cents, or 8.4 percent, to $10.91.   The company said skilled nursing and assisted living facility revenue grew 4 percent to $165.5 million, and ancillary service revenue increased 9 percent to $23.9 million.   A year ago, it reported a profit of $8.4 million, or 23 cents per share, on $180.7 million in revenue.

So why does the nursing home industry spend millions every year for unconstitutional tort reform measures when they are extremely profitable?

OK Representative Cox protects his profits over his constituents

Oklahoma Center for Consumer & Patient Safety
PO Box 4481, Tulsa, OK 74159-0481

FOR IMMEDIATE RELEASE:

Contact: Hugh M. Robert, Ex Dir 918-850-0293 hugh@okccps.org

April 7, 2008

HOUSE COMMITTEE KILLS NURSING HOME INSURANCE REQUIREMENT:

REPLACES BILL TO FAVOR COMMITTEE CHAIR

Tulsa, OK – The Public Health Committee in the Oklahoma House of Representatives considered the amended version of the bi-partisan approved Senate Bill 1549 this morning. Just minutes before the committee meeting was scheduled to begin, Representative Cox, the owner of several nursing homes, submitted a committee substitute which stripped out the insurance requirement. The committee members voted 10-9 to consider the committee substitute, falling one vote short of being able to hear the bill in the form already approved by the Senate.

“It is sad that Dr. Cox put his personal financial interest in front of requiring nursing homes be financially responsible,” said Hugh M. Robert, Executive Director of the Oklahoma Center for Consumer and Patient Safety. Robert went on to say “the Oklahoma Senate had overwhelmingly supported the amended bill and Dr. Cox, who purportedly operates his nursing homes without insurance, today showed his personal financial interest is more important to him than protecting his constituents or the citizens of the State of Oklahoma.”

The amended bill would have required nursing home operators to prove they have sufficient assets to cover claims of resident abuse or neglect. If the nursing home operator fails to keep sufficient assets and does not carry liability insurance the officers, directors and shareholders of the nursing home operator would be personally liable to a nursing home resident or their family when someone is abused or neglected.

One reason Dr. Cox as well as the nursing home lobby has cited for not carrying insurance is that the Medicaid reimbursement levels not being high enough to provide the owners with large profits and pay for insurance. However, this does not take into account the private pay residents and if the issue is with reimbursement rates, then Dr. Cox, in his capacity as a representative should work on reimbursement rates, not blocking a resident or family of a resident from holding responsible a nursing home who abuses or neglects a loved one.

If a nursing home resident is neglected or abused they should have a remedy. Robert comments “we require people who drive cars to carry mandatory insurance, why should nursing homes be any different.” “Forcing nursing home operators to show they are financially sound in order to have a license to take care of our elderly citizens just makes common sense, especially with the growing elderly population” Robert says. Most nursing home operators are for profit and carrying liability insurance is a legitimate cost of doing business. A nursing home does not have to choose between providing good care and being financially responsible, they should be required to do both.

About the Oklahoma Center for Consumer and Patient Safety- Please call 800-994-6025 or visit www.okccps.org.

Budget cuts for home health

Former NY Mayor Ed Koch wrote a great article on the budget cuts to home health that have forced many older citizens into nursing homes.  Below are excerpts of the article:

In the last seven years, while the Medicare budget for nursing home stays has dramatically increased from $13.6 billion to $15.7 billion, home health care has been cut by 25 percent, from $14 billion to $10.5 billion. It is cut further in the Bush administration's proposed fiscal year 2008 budget, which calls for an "inflation freeze" that would slash $410 million in fiscal 2008 and $9.68 billion over five years.

None of this makes common sense. Home care allows the elderly who have become frail to maintain their dignity and independence, sleep in their own beds, use their own kitchens and stay in the house they have long enjoyed (or in the house of a child or relative) - unless their condition deteriorates to the point where moving into an institution is absolutely necessary.

Besides offering a higher quality of life, home care is far cheaper than the alternatives - averaging one-fifth the price of nursing homes and a tiny fraction (3 percent) of the cost of hospitalization. It costs roughly $109 per visit, compared to $499 per day in a skilled nursing facility and $3,838 for hospitalization, according to Medicare statistics.

Starting in 1997, under the Balanced Budget Act, Medicare home health spending was cut by half. This forced the closing of nearly 25 percent of all home health agencies in the United States.

According to the Center for Responsive Politics, "hospitals / nursing homes" gave more than $30 million to candidates in the 2004- 2006 federal election cycles, based on Federal Election Commission data, and they are among the top third of 80 "industries" ranked. Home health does not even rate a mention on the chart.

There are some 1.6 million people in nursing homes today. Sometimes, senior citizens are able to live normal lives and care for themselves, but as people age, many have problems compounded by poor health and need caretakers. They should not be forced into nursing homes for lack of alternatives.

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