The Kaiser Family Foundation, which has long served as a regulator for the health care industry, released a report earlier this year on a trend that many consider worrying: for-profit investor groups are increasingly buying up nonprofit nursing homes.
Since 2015, KFF reported, 900 nonprofit nursing homes and senior living communities nationwide have changed ownership, with more than half taken over by for-profit operators. For-profit groups now own more than 70% of the roughly 15,000 nursing homes in the United States, which care for more than 1.3 million residents.
Wisconsin’s nursing homes are a major part of this. For-profit companies have either taken over nonprofit facilities run by religious orders or even county governments, or are currently negotiating to do so.
The reasoning is simple. Medicare and Medicaid don’t reimburse the homes enough to cover their costs, the nonprofits claim. As a result, they can’t afford to keep them open. How the for-profits can change that while still providing the same level of care is a perplexing question. The fact that Medicare and Medicaid recently increased their reimbursement rates may provide a clue.
All of this is currently playing out in neighboring Sauk County, where the county council is considering selling its Medicare-rated five-star nursing home to a nonprofit organization it oddly refuses to name. The county council’s decision to negotiate a sale has sparked an uprising among citizens.
More than 1,000 residents have signed a petition opposing the sale of the highly regarded health center, which was built in Reedsburg just 16 years ago. More than 100 people opposed the sale. Reportedly, 34 were against and one was in favor.
Board Chairman Tim McCumber said the county has not adequately met the needs of the residents it currently serves and has never been able to break even.
“There was always a delay in collecting taxes,” he told the local newspaper.
But Judith Brey, who lives in the district and led the petition, pointed out that many other government services do not generate profit, but the district still offers them because they are a public good.
“We need more input and more evidence that this makes any sense,” Brey said. “And it doesn’t. We can afford it.”
But equally galling is the board’s refusal to disclose which nonprofit it is negotiating with. Opponents rightly complain that the potential buyer should be public knowledge. How else, they argue, will citizens know whether the new owner is a legitimate company?
This week, opponents of the sale held a conference call with Attorney General Josh Kaul’s office and asked him to inform the county board that it was a violation of state transparency laws.
An independent search of federal records by the Baraboo News Republic found the potential buyer to be a large nursing home operator called ARIA Health Care. In Wisconsin, the for-profit company owns three nursing homes in the Milwaukee area, as well as facilities in Waukesha, Brookfield and Mitchel Manor in West Allis.
The newspaper reported that ARIA’s Brookfield and Waukesha facilities had 26 and 17 reported deficiencies, respectively, in 2023, according to news organization ProPublica, including allegations of inadequate ulcer treatment and resident monitoring, as well as sanitation concerns. Medicare gives the facility four stars, while the Sauk County facility has only five stars.
However, the CEO has not confirmed that ARIA is the interested party.
This is another reason for the gap between the government and the people.
Dave Zweifel is editor emeritus of The Capital Times. [email protected], 608-252-6410 and on Twitter @DaveZweifel.
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