Here's a true story. A 93-year-old woman who had been living in a nursing home for five years was admitted to the hospital and died of dehydration. (a) Inquiries into the cause of death found that the woman had had neither food nor drink for as long as 48 hours. A lawsuit was quickly brought against the nursing home for negligence. But the nursing home's managers cried foul, pointing out that there was more to the story: The woman was suffering from severe end stage Alzheimer's disease, and she had refused to eat or drink. The nursing home caregivers had wanted to insert a feeding tube, but the family would not let them do so until they received results of a test for cancer. When permission to insert the feeding tube was granted, it was too late. The nursing home was not at fault, the managers pleaded.
Believing the facts were favorable to its defense, the nursing home's owner, a prominent long term care (LTC) company, decided to take a stand against the plaintiff's attorney, who was active in litigation against LTC facilities. The verdict? A $78 million judgment for the plaintiff! Many observers of this case were dumbstruck, wondering what had gone wrong. With decisions such as this one, it is not surprising that the LTC industry is confronting a professional liability crisis.
The Price of LTC Ownership
If you are a financial leader of a hospital or integrated delivery system (IDS) that owns one or more nursing homes, you are no doubt well acquainted with this crisis affecting LTC facilities. By some reports, as much as 21 percent of the Medicaid payment increase for long term care over the past seven years has gone to cover the cost of professional liability insurance--more than $7 billion. (b) In states where the crisis is most acute, some LTC facilities today are unable to find any professional liability insurance at all, and so they go without. For example, more than half of Texas's roughly 330 LTC facilities have elected to go "bare." (c)
Although such statistics paint a bleak picture, some industry observers argue the worst is over, cheered by recent tort reform legislation in Florida, Texas, and other states, and by the Bush administration's commitment to support these reforms specific to health care. (d) These optimists also point to the AARP's surprising change of position in December 2003, to support caps in Florida on pain-and-suffering awards in nursing home eases. (e) As additional evidence of a positive trend, they cite the aggressive strategies many LTC companies are taking to deal with this crisis, which include compartmentalizing assets (and thus related risks) in separate legal entities, instituting arbitration agreements on admission, and exiting the most litigious states altogether.
These strategies are all important, but they will not be enough. The past half century has seen a dramatic increase in the use of litigation as a force of change in a number of industries. Now it is long term care's turn. Indeed, the baby boomers, once thought to be the "pot of gold" for the LTC industry, may turn out to be its bane. Collectively, the boomers--who are accustomed to getting what they want through use of their wealth, votes, and lawyers--are intensely focused on the LTC industry, demanding changes for their parents' current care and their own anticipated care, and achieving many favorable outcomes against LTC facilities. Either in settlements or in court, they are winning--and winning big.
What can be done, then, to resolve this crisis, mitigate the staggering costs of professional liability insurance, and improve the fortunes of LTC providers? A major part of the problem seems to be the public's perception of long-term care.
A Skewed View of LTC Providers
Any review of the literally thousands of cases against LTC providers will disclose an obvious trend: plaintiffs frequently prevail, either through settlements or lawsuits. This is true even when the facts seem to be favorable to the defendants, as in the case described at the beginning of this article. In a speech delivered at an American Health Lawyers Association seminar a few years back, one of the leading plaintiff attorneys in the field offered a clue to the reasons for this trend: When suing a nursing home, he said, "the facts of the case do not matter."
What matters has been the approach used by the plaintiff's attorneys, which has been incredibly consistent. Again and again, the most successful plaintiff's attorneys have made their case first and primarily against the LTC industry and then, to a lesser degree, the LTC company; finally, the facility is used as a "case in point." The consistency of their arguments goes further, by using six common negative characterizations of the industry:
* LTC is a heartless industry that warehouses the elderly in terrible conditions for profit. Money-hungry millionaires, who neither understand nor care about residents or their families, are running the business.
* The LTC industry is based on a corrupt business plan--billing the government millions of dollars for care it intentionally does not provide.
* Profits are placed before residents through understaffing and underpayment of workers.
* Nursing homes typically fail to meet even minimal industry and government standards.
* LTC managers routinely lie to families about the quality of care provided to get residents in the door.
* When things go wrong, nursing homes typically engage in a cover-up--further proof that they don't care about residents and their families.
The defense in these cases too often fails to effectively counter these arguments, or to even attempt to argue against the majority of the case presented against them. Instead, they tend to focus on case specific facts, thus missing the point.
Going on the Quality Offense
These findings indicate a need for a shift to an offensive strategy. Each LTC provider, whether it is stand-alone or IDS-owned, needs to be able to show clear evidence that it does not fit these stereotypes--evidence that is readily apparent to anyone who examines the facility's day-to-day operations. To this end, each facility's programs, systems, staffing, training, management tools, and incentives should be designed to reflect a culture of caring and service excellence. This impression should be immediately evident not only to residents and their families, but also to key parties-in-interest, including state survey agencies and accreditation bodies.
In short, the best way to begin to solve the LTC industry's professional liability crisis is to implement quality initiatives that not only greatly improve meeting and exceeding expectations, but also provide powerful arguments that counter the negative characterizations of nursing homes. As each LTC provider implements operational changes that promote service excellence, the tide will begin to shift for the industry as a whole.
So what steps are needed Io bring about a change in the perception of long term care and, more important, your facilities? Consider the following.
Manage expectations while building trust. The effort to foster trust and realistic expectations should start from before each resident's admission and continue throughout the resident's stay. An assessment tool should be used in the preadmission process to help resident and family members sort through their emotions and concerns to arrive at realistic goals and expectations. Families and residents should be given the right tools and information to make informed decisions as to whether this particular LTC facility will provide the appropriate level of care for them. Specifically, the facility should provide information that clearly explains what the facility can and cannot accomplish specific to the resident's condition, what should be expected in an LTC environment, and the possible outcomes (including negative ones) that aged persons with similar conditions might reasonably experience.
The facility also should take steps to ensure that its relationship with residents and their families remains positive. To this end, the nursing home should provide residents and families with professionally developed educational materials to inform them of what they should do to promote quality outcomes, and include "dialog tools" to ensure consistency of communication. The rest dent's contract also should incorporate a provision addressing the principle of "informed consent." Such elements should be designed with a view not only to manage customers' needs and expectations, but also to be persuasive evidence in a court of law that the nursing home has made a good-faith effort to fully and accurately inform residents and their families about what they can reasonably expect.
