Better Than A Nursing Home?

(3 of 4)

The "tragic but isolated" rebuttal has been the industry's mantra as it has tried to stave off government regulators. The argument has worked in the past, in part because there are few national statistics on the frequency of problems at assisted-living facilities. The most comprehensive study, a 1999 survey of assisted living in four states by Congress' General Accounting Office, found that 27% of surveyed facilities had been cited for five or more quality-of-care violations in a two-year period and that 11% had been cited for 10 or more violations. HHS's new national study will point to more evidence of widespread neglect: 26% of residents surveyed who needed help with toilet use sometimes didn't receive it.

To the health inspectors called in when problems arise, the incidents are anything but isolated. "These facilities are chronically understaffed, and the staff is chronically undertrained," says Kary Hyre, long-term-care ombudsman for the State of Washington, whose office gets about 1,250 complaints a year. The HHS study found that 25% of the facilities that purport to offer the highest level of services had only 1 caregiver for every 20 residents on the 3 p.m.-to-11 p.m. shift and just 1 for every 34 residents overnight. "Once the facilities are built, their main expenses are staff and food," says Catherine Hawes, the national study's lead researcher. "So when the companies squeeze, that's what gets shortchanged." Hawes also points out that most states require more training for manicurists and dog groomers than they do for assisted-living caregivers.

Trade-group chief Wayne admits that during the industry's boom, "many companies did not have time to focus on the infrastructure," including training of staff. But the growth, especially in big cities, happened so quickly that many facilities could not fill their beds. So companies have put on the brakes: construction is at its lowest level in five years. This has allowed facilities, says Wayne, "to focus on what's important." But the slowdown has left many assisted-living companies short of cash. And allegations of neglect have sparked a surge of liability lawsuits, driving up liability-insurance costs as much as 800%. Wall Street, in response, has fled. Alterra's stock, as high as $33 a share in January 1999, now sells at 23[cents] a share. Two other assisted-living companies filed for bankruptcy earlier this year.

To survive, some facilities are taking in or holding on to sicker residents and increasing the fees they charge to serve them. Sunrise Assisted Living, one of the few companies whose stock price has remained steady, told its investors it is now marketing to "the frailest of the frail." This is welcome news for many residents and their families who believe that the ability to "age in place" is a blessing, even if their care needs are changing. Carrie Cyphert, 89, who suffers from advanced Alzheimer's disease, has been in an Alterra memory-care facility in Portage, Mich., since September 1999 at a cost of $42,300 a year. In July 2000 state health inspectors cited the Portage facility for several violations, including medication errors and insufficient staff. The state tried to force Cyphert and nine other residents to move to higher-care facilities, contending that if they didn't move, Alterra would in essence be operating a nursing home without a license. Several of the families sued. Says Cyphert's daughter Judy Petrick, who was pleased with the care her mother was getting, regardless of the regulatory violations: "I didn't think the state had the right to tell me or anybody else where my mother could live if I'm paying for it."

Therein lies the dilemma for those who wish to regulate assisted living. The vast majority of residents pay for their own care, and according to industry surveys, most are satisfied. Even at the height of turmoil at the Eagan center, several families wrote thank-you letters for the "wonderful" and "tender" care and for providing a place "just like home." So how to justify government intrusion? Michigan decided it couldn't, and the state swiftly passed a law that allowed Cyphert and all other assisted-living residents to stay as long as they wish if the family, the doctor and the provider all agree to it. "Isn't that wonderful?" beams Alterra president Vick. "Free choice has risks, but as long as the operators and residents agree, I think it's a win-win for America."

As states across the U.S. rewrite their rules governing assisted living, most, like Michigan, have deferred to the wishes of the industry. Many of Kentucky's new regulations apply only to facilities that have yet to be built. Alabama has just six inspectors to oversee more than 300 assisted-living centers. In Minnesota attorney general Hatch proposed a consumer-rights bill that would require facilities to disclose fully such key information as staff training and treatment protocol. But even that bill was watered down so much--it includes no required training or inspection--that Hatch now admits that "it won't do much."