Nursing homes and long-term care facilities, during the covid pandemic, have taken heat from government regulators, residents and their families. Now the industry is hearing it from an unexpected source: their investors.
Investors who own large shares of nursing home companies now are demanding that the operators improve staff working conditions and the quality of care.
Nearly 100 investor groups that manage $3.3 trillion in assets in the U.S. and abroad told nursing home companies in a that they should increase staffing levels, boost staff pay, offer paid sick leave, improve resident safety programs and allow staff members to unionize.
It鈥檚 the latest of the nursing home industry, which has come under fire for an epic failure in infection control that spread covid-19 killing residents and staffers across the U.S.
The move by investors was unexpected, since it could reduce their financial returns. But they are worried about the future of the nursing home industry, which experienced a death wave inside its facilities that accounted for 34% of the nation鈥檚 covid toll. That鈥檚 not good for business.
鈥淭hese are great principles that aren鈥檛 necessarily in the best financial interest of investors,鈥 said David Grabowski, a health care policy professor at Harvard University who studies long-term care. 鈥淏ut it鈥檚 hard to know if this has any teeth.鈥
Nursing home industry groups themselves , but they stress the need for higher Medicaid payment rates.
The investors鈥 statement of expectations was sent to major for-profit companies and real estate investment trusts that own nursing homes, including Genesis HealthCare, Ventas, Brookdale Senior Living and CareTrust REIT. It was signed by large investor groups including BMO Global Asset Management, Aviva Investors and the Interfaith Center on Corporate Responsibility.
鈥淭his is a moment to say, 鈥楲ook at what happened during covid. You don鈥檛 want it to happen again,鈥欌 said Christy Hoffman, general secretary of UNI Global Union, a labor-affiliated group that organized the investors鈥 letter. 鈥淭hese workers are treated so badly, and that led to so many unnecessary deaths.鈥
Nursing home care aides, who provide most of the hands-on care, . Mostly women of color, they often work at more than one facility to cobble together a full-time schedule. That increased covid transmission among facilities. These workers generally don鈥檛 get health benefits or paid sick leave, forcing them to come to work even when ill. Few are in unions, which have pushed for stronger safety protections. Annual turnover in the industry occasionally hits 80%.
There were reports across the U.S. that nursing homes did not provide adequate personal protective equipment like face masks and gowns to their workers, had too few workers on duty to properly care for residents, and engaged in shoddy infection control practices such as putting residents with and without covid in the same rooms.
BMO Global Asset Management already has contacted 13 nursing home companies and REITs urging appropriate staffing levels, improved health and safety standards, proper use of PPE, fair wages, pandemic hazard pay and freedom to unionize, said Nina Roth, director of responsible investment at BMO.
If they fail to meet the expectations with reasonable speed, her investment group, which manages or advises on $755 billion in assets, may take shareholder actions against management and ultimately divest from the companies, Roth said.
The American Health Care Association, which represents for-profit nursing home companies, said in a written statement, 鈥淲e appreciate seeing investors taking a considerable interest in the quality of care and workforce challenges.鈥 But it added that for nursing homes to offer more competitive wages and benefits, they need 鈥渕ore reliable resources鈥 from federal and state governments.
While higher payments would help, said UNI Global鈥檚 Hoffman, nursing home companies 鈥渉ave a responsibility to do right by their workers regardless of public policy. We just don鈥檛 want companies to say they鈥檒l do it when the government tells them to do it.鈥
Advocates for nursing home residents say that, if government payment rates are increased, should require nursing homes to show that the additional funds are used for increased staffing and improved services, not for profits or higher salaries for executives.
In line with that, the investors鈥 statement of expectations called on nursing home companies and REITs to publicly disclose whether they are complying with the staffing and quality-of-care targets.
Grabowski said the investors鈥 letter shows they recognize the inevitability of nursing home reform in the wake of the covid catastrophe and want to get ahead of the wave. 鈥淭hey鈥檙e thinking, 鈥榃hy don鈥檛 we be more transparent and improve quality, or else what comes from the government could be ugly.鈥欌
