Corporations step in to run nursing homes

Mary Zahn

Jul. 27, 2008 (McClatchy-Tribune Regional News delivered by Newstex) -- The corporate nursing home industry was born in 1965 after Medicare and Medicaid began to provide funding for facilities that took care of poor, elderly individuals too ill to live on their own, said Alice Hedt, executive director of the National Citizens' Coalition for Nursing Home Reform.

Before that, she said, care for the aged was primarily in community-based, mom-and-pop facilities or county-owned facilities.

"They were not licensed or regulated and were primarily owned by people in the community," she said. That changed gradually as nursing home corporations formed and took advantage of the new source of funding.

In 1987, Congress passed a law that required nursing homes to be licensed, meet basic standards of care and be subject to inspections.

Some of the smaller homes closed because they could not afford to stay open, others closed because they could not keep up with the new regulations and still others shut their doors because of the competition from larger nursing home chains.

Today, most for-profit nursing homes in Wisconsin are either owned by small investors who operate a few homes or large national corporations that have hundreds, said Brian Purtell, director of legal services for the Wisconsin Health Care Association. He added that a handful are still locally owned and operated by independent owners.

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