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That incident, along with complaints by Levang and other residents' families, prompted Minnesota attorney general Mike Hatch to sue Alterra for consumer fraud. The suit was settled, with Alterra agreeing to pay for an outside monitor. The center hired more staff, including a housekeeper, and modified its brochure, replacing the phrase "professionally trained" staff with "trained" staff. But for many of its other Minnesota facilities, Alterra insists having staff provide "holistic" care is effective.
"We could have done a better job," says Alterra president Steven Vick about what happened at the Eagan center. He says such problems are rare. "These events are disappointing, but we work every single day to correct them." Karen Wayne, president of the Assisted Living Federation of America, one of the industry's main trade groups, says problems such as those at the Eagan center have been exaggerated. "When you look at the number of people we serve," she says, "these are isolated accidents and tragic events."
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.