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"Study: Nursing homes not improving"

Original source:

Sacramento Business Journal

Increased funding bolsters bottom lines but complaints, turnover continue to climb

Sacramento Business Journal –
by Kathy Robertson Staff writer
Friday, April 18, 2008

California nursing homes got a $1.1 billion bump in pay between 2004 and 2006, but the money failed to improve the quality of care they provide, a new study concludes.

Nurse staffing increased slightly, but many nursing homes still fail to meet state staffing standards, and the number of substantiated complaints jumped 41 percent, according to a study by researchers at the University of California San Francisco.

A second study found that 26 percent of California nursing homes made significant new investments in staffing and operations, but the report by researchers at Vanderbilt University in Nashville, Tenn., and the University of California Irvine did not track quality due to lack of data.

The studies come at a time when California's landmark Medi–Cal nursing home funding law is up for reauthorization by the state Legislature and the massive state budget deficit has lawmakers scrambling for ways to cut expenses. So far, the governor has recommended nursing homes be one of the few exempted from proposed budget cuts.

The politics are further complicated by pending negotiations between more than 100 nursing homes and the Service Employees International Union, an aggressive health care union that collaborated with nursing home companies to get the funding bill signed in 2004.

SEIU is embroiled in a nasty internal fight that's quietly pulled the plug on the alliance behind the bill –– and escalated to a public power struggle between international president Andy Stern and Sal Rosselli, president of SEIU–United Healthcare Workers West.

The nursing home industry and state officials say it's too early to judge progress because nursing homes had to wait more than 18 months for the money.

"We felt (the UCSF) report was premature. There is insufficient data to assess the outcomes it is trying to evaluate," said Toby Douglas, deputy director for Medi–Cal, the government health care program for the poor that spends about $3 billion a year on care for nursing home residents.

"It is early," agreed UCSF professor Charlene Harrington, lead author of the study. "But the facilities did get a lot of money, and they made changes. I don't buy the argument that something shouldn't have happened with that."

Staffing up a bit, complaints up a lot

Assembly Bill 1629 by former Assemblyman Dario Frommer, a Los Angeles Democrat, changed the way nursing homes are paid by Medi–Cal, from a flat fee to a cost–based system.

It also imposed a fee on California nursing homes to pull down federal matching money in order to increase staffing and improve quality without added cost to the state. Now, nursing homes that spend more on improvements get paid more.

The law sunsets next year if not renewed by state lawmakers.

Based on assumptions made by the state Bureau of Audits, the program is projected to save the state's General Fund more than $492 million by the end of fiscal year 2008, Douglas said. His department estimates nursing homes got $350 million in new money between 2004 and 2006, not the $590 million cited in the UCSF report.

Average Medi–Cal nursing home revenue increased from $124 per resident per day in 2004 to $152 in 2006, according to the UCSF report. The money bolstered bottom lines in a chronically underfunded industry, but there's no documented improvement in patient care, the studies show.

Nurse staffing increased slightly, and 84 percent of nursing homes met or exceeded minimum state staffing standards of 3.2 hours per resident day in 2006, up from 68 percent in 2004, according to the UCSF report. Only 4 percent met the 4.1 staffing standard recommended by some experts.

Substantiated complaints, an indication of substandard care, rose 41 percent over the same period.

Wages for nursing assistants rose 7 percent but failed to keep pace with inflation. Licensed nurse wages increased 9 percent. Turnover increased slightly.

"The key finding is we don't see any improvement in quality," Harrington said. "As long as you have low staffing and high turnover, you'll continue to have poor quality."

The program allows nursing homes to profit at the expense of residents, said Pat McGinnis, executive director of California Advocates for Nursing Home Reform in San Francisco.

"The report? Nothing surprising about it," McGinnis quipped. "It's what we expected. There's no accountability; nothing that says if you don't staff at 3.2, we won't continue to give you money."

There should be some enforcement teeth built into any reauthorization of the law, she said.

'Canary in a coal mine'

The UCSF report raises issues that should be taken in context, said Maribeth Shannon, a director at the policy monitor program at the California Health Care Foundation, which funded the study.

"It's a canary in a coal mine," she said, "but there are other things going on."

Complaints are up, but state regulators have been under pressure to beef up enforcement, Shannon said. Turnover is worse, not better, but was the wage hike insufficient to keep staff on board or were people leaving for other reasons?

"It goes back to supply and demand," said Dan Skillman, administrator at Roseville Care Center, a 210–bed nursing home. "You accommodate the people you need the most."

Hospitals are snatching up registered nurses to meet their own state–imposed staffing ratios –– and they pay more, Skillman said. So, his RN wages have increased more than those paid to nursing assistants.

"There are so many more variables than give the money and it will be fixed," Skillman said.

John Schnelle, director for the Center for Quality Aging at Vanderbilt University Medical Center and lead author of that report, agrees it's too soon to see changes in quality but says questions loom. This study was funded by SEIU, the nursing home industry and some consumer groups.

"Twenty–six percent of nursing homes in California have done something significant compared to trend. Some have increased staffing, but it's mostly wages," Schnelle said. "It's nice that 26 percent did something, but what about the rest of them?"

Nursing homes aren't getting reimbursed for money they don't spend, countered Darryl Nixon, director of reimbursement for the California Association of Health Facilities, an industry trade group.

Some have been slow to take on new expenses because they are skeptical whether the law will be renewed, he said.

The old flat rate offered no incentive to improve care. The new system does, but nursing homes need assurance it will remain in place before they take bold moves they might later regret, he said.

Alliance dissolves amid labor fight

Upcoming contract negotiations between SEIU and more than 100 nursing homes could ramp up pressure for higher wages –– if a power struggle within SEIU doesn't blow the union apart.

Rosselli launched a public fight against Stern in February, when he accused the international president of caring more about union growth than workers' rights and meddling in plans for upcoming contract negotiations in California. The feud escalated last month when Stern accused Rosselli of administrative improprieties. Then, UHW workers filed a lawsuit in federal court alleging Stern and others violated their free speech rights.

The focus shifted this week to maneuvers related to the union's quadrennial convention in Puerto Rico late next month.

One casualty so far is the California Alliance to Advance Nursing Home Care, a labor–management group created to lobby for AB 1629 and help negotiate labor contracts. The board voted March 10 to dissolve the alliance amid the escalating labor fight, former executive director Scott Carlson said.

"We are not bound up in the alliance anymore and will continue to advocate for our members," said Richard Thomason, policy director for SEIU–UHW.

"In our view, AB 1629 was a necessary first step to improve quality and staffing in California nursing homes," Thomason said. "Under the flat rate, it was a race to the bottom."