A recent study compared the long-term care industry in California, Ontario, Canada, England, and Norway as to the extent to which ownership of nursing facilities has shifted from the public sector to private for-profit and not-for-profit companies, and how this shift affects the transparency of information and accountability for public reimbursement.

The international study found that increases in the percentage of private companies correlated with lower spending on nursing and direct care services. While less was spent on direct care services in private facilities, profit margins in private facilities were much higher than in their public counterparts.

According to the study summary by The Center for Medicare Advocacy, the study found:

“a striking aspect of the study is its description of the nursing home industry in each of the four locations. The contrast between California (2012) (with 99% of facilities privately-owned, including 69% on a for-profit basis and 51% owned by chains) and Norway (2013) (with 90% facilities municipally-owned) is stark.”

  • In California, 35% of nursing home expenditures are devoted to direct care, in Norway, 60%.
  • California nursing facilities spend, on average, 15.5% of their revenues on administrative costs, in Norway, 3.3%.
  • Profit margins in 2011 were 6.5% in California, with chains enjoying profit levels that were double other facilities, and total profit margins increasing 42% over the study period, 2007-2012; in Norway, municipal facilities (90% of the facilities) do not have profits.

You an read a review of the study by The Center for Medicare Advocacy at the below link.

International Study: Privatization of Long-Term Care Facilities Does Not Lead to Greater Transparency or More Care

About Jerry

Jerold E. Rothkoff, a practicing New Jersey and Pennsylvania attorney, is the Principal of the Rothkoff Law Group, an elder care law firm. Jerry dedicates his practice to serving clients in the areas of life care planning, long-term care planning, Medicaid & VA benefits, and advocacy for the elderly and disabled. He is past President of the NJ Chapter of the National Academy of Elder Law Attorneys, former chair of the elder law section of the NJ State Bar Association, and past President of the Life Care Planning Law Firm Association. Jerry continues to be an outspoken advocate for the rights of the elderly and disabled. He writes for and gives presentations regularly to attorneys and other professionals about legal issues related to seniors and those with disabilities. Jerry’s community activities include the Twilight Wish Foundation, the Delaware Valley Stroke Council, the Alzheimer’s Association, as well as numerous other advocacy groups. When not in the office, Jerry spends time with his wife, Erica, and their five children, eighteen-year old identical twin girls, Liza and Julia, fifteen-year old fraternal twin boys, Evan and Gregory, and six-year old Aitan.

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