New York State In-depth

A cautionary tale about where the money is going?

John O’Connor

A new optimism is fueling the senior housing industry these days.

Many operators are really excited about a post-pandemic recovery. One where occupancy is rising and COVID-19 headaches are fading.

In this sense, one hears more and more about the emergence of innovative corporate structures. It’s a concept that can have many benefits. But unfortunately, it can also have its downside.

In other words, there can be a very fine line separating legitimate business practices from shady shenanigans. A new report from Kaiser Health News strongly suggests some operators are working on both sides of this road.

The gist of the KHN article is that owners of several communities in New York diverted funds that should have been used to care for residents or patients into their pockets.

In particular, the article alleges that during the peak of COVID-19, lavish payments have been made to go to real estate, administrative and staffing companies that are financially linked to nursing home owners across the state. The play implies that New York was hardly the only place where such activity took place.

“Even during the worst year of the New York pandemic, when homes were desperately understaffed and their residents dying by the thousands, some owners managed to make millions of dollars,” said Bill Hammond, senior fellow at the Empire Center for Public Policy. a think tank in Albany, New York is quoted as saying.

The story goes on to tell what was to be expected: families of residents who complained about inadequate staffing and care were met with pro-industry claims that everything was on the up.

It’s not fun for me to say, but frankly, the evidence here against the industry is at least a little embarrassing. Because even if nobody is convicted of misconduct, some of what is reported here hardly casts this field in a good light.

My advice? Use caution when considering what type of entity to associate your name with. Not just for the next year or two, but for the long term.

John O’Connor is the Editorial Director of McKnight’s Senior Living and its sister media brands, McKnight’s Long-Term Care News, which focuses on skilled nursing, and McKnight’s Home Care. Read more of his columns here.

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