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April 10, 2024
Consumer Voice
Wednesday, April 10, 2024, 2:00 to 3:00 p.m.
Consumer Voice has long been a proponent of increased transparency and accountability in nursing home finances. Data and research show that roughly 75% of nursing homes use related party transactions. These common transactions permit some nursing home owners to hide how profitable their facilities really are. On March 4, 2024, a new paper, “Tunneling and Hidden Profits in Health Care” was published by Dr. Ashvin Gandhi and Dr. Andrew Olenski. Their paper looked specifically at related party transactions in nursing homes and “tunneling.” Tunneling is the process by which nursing home providers “covertly extract profit by making inflated payments for goods and service to commonly owned related parties.” This paper, a first of its kind, found that in 2019, 63% of nursing home profits were “hidden” in related party transactions. In other words, the reported profits by the industry are roughly 1/3 of what they truly are.
Join Consumer Voice in welcoming the authors of this groundbreaking study to discuss their methodology, findings, and what steps they recommend be taken to address the lack of transparency and accountability that allows nursing homes to continuously claim poverty as to why they are unable to provide high-quality care.
This timely study pulls back the curtain on nursing home finances and challenges the industry narrative that they are not paid enough in Medicare or Medicaid dollars. Importantly, it shows that when money is diverted away through “tunneling” reforms such as a minimum staffing standard face uphill challenges, as the industry claims it cannot do better with more money.
