August 12, 2002

Insurance premiums blamed for nursing home closure
___By Kendall Anderson
___Dallas Morning News
___DALLAS--Health care's skyrocketing liability insurance premiums, which have hit nursing homes the hardest, are being blamed for the closure of a string of faith-based, non-profit long-term care centers across the state.
___Last month, Buckner Baptist Benevolences closed its Ryburn facility in Far East Dallas. Buckner, a 123-year-old North Texas institution best known for running the state's largest children's home, also may close some of its five other nursing homes statewide.
___Lutheran Social Services has closed two homes in Round Rock and Lubbock and is shutting down a third.
___Both non-profits blame huge increases in liability insurance and Texas' Medicaid reimbursements, which are among the lowest in the country.
___Advocates and nursing home operators say it's disturbing to see reputable faith-based non-profits with deep community roots leaving the industry.
___Non-profit homes, most of which are faith-based, are more likely to take in people on charity when the government or private assets won't foot the bill.
___"The faith-based and community-based non-profits' driving mission is first to provide the care," said David Thomason, public policy director for the Texas Association of Homes and Services for the Aging, which represents the state's estimated 400 non-profit homes. "It should be very troubling for all Texans ... to be losing the providers whose driving mission is to provide the care."
___The closure of Ryburn, which opened in 1964, signals a worsening of the financial crisis facing Texas' 1,189 nursing homes, some say. Liability insurance rates, tied to litigation costs and the quality of care, have increased on average 1,000 percent since 1998.
___"This is huge, to have the Baptists who've been doing this forever say they cannot do it," said Godwin Dixon, executive director of Grace Presbyterian Village, a non-profit nursing home and assisted-living center in Oak Cliff.
___Despite no major legal settlements or lawsuits, Grace Presbyterian was looking at a fivefold increase in its annual premium, from $90,000 in 2001 to $550,000 this year. Dixon decided to raise the home's deductible from $5,000 to $250,000. His annual premium this year is $200,000.
___Other local homes have cut staff and increased what they charge private-pay patients by up to 20 percent to cover the higher rates. But increasing the patients' cost leads many to sign up sooner for the taxpayer-funded system of Medicaid.
___Buckner President and CEO Ken Hall said he had no choice but to close the Dallas nursing home. The independent and assisted-living units on campus remain open.
___A 1,500 percent increase in premiums since 1998 and the greater risk of litigation in the industry threatened the institution's endowment as well as its children's home in Pleasant Grove.
___"All faith-based people have to balance their call to serve people with the circumstances we're dealing with," Hall said.
___The 55 or so Ryburn residents were moved between June 10 and July 10 to other homes. Finding spots for them was not difficult because nursing homes have plenty of empty beds. But being uprooted takes its toll--physically and emotionally--on frail and ill people, studies show.
___"It is devastating for the residents because they had chosen Buckner as their home--their last home," said Bettina Lang, director of programs at Senior Citizens of Greater Dallas, a non-profit that monitors nursing home care. "For them, this is as catastrophic as losing one's home in a natural disaster such as a fire or flood."
___One resident who was moved said she had no desire to get out of bed as she did every day at Buckner for eight years.
___"I cannot get used to things because I was at Buckner so long. All the girls and nurses knew me there," said the woman, who has no family and requested that she not be identified for fear of problems at her new home.
___"I miss all of them."
___Many nursing home operators say those to blame for the skyrocketing premiums are lawyers. They say most of the industry's dramatic increase in multi-million-dollar jury awards and settlements is not based on poor care but on undiscriminating lawyers who take advantage of negative public sentiment regarding nursing homes and the emotionally charged nature of elder care.
___Most nursing homes settle before trial because the publicity, even if they think they have done nothing wrong, would be damaging.
___The industry supports caps on damages similar to those governing hospital malpractice awards. State law exempts nursing homes, in some cases, from such caps.
___Texas is second in the nation in the number of lawsuits per nursing home facility, at 1.3 annually. Three of the state's top 10 jury awards in 2001 involved nursing homes, according to legal reports.
___Those who advocate for nursing home residents and the lawyers who take such cases say the majority of people who sue don't win any money.
___They also say there would not be so many lawsuits without poor care.
___The insurance industry has said that capping damages would not necessarily reduce insurance rates. That's because malpractice and liability rates were held artificially low before the mid-1990s in an effort to lure clients, insurance analysts confirm.
___Insurance companies made their profits through investments in the stock market. But the declining market and increasing litigation pushed rates up, insurance analysts said.
___"I think it's hardly fair to label lawyers as the chief reason doctors and nursing homes are being asked to pay more for their insurance," said Jeff Rasansky, a Dallas lawyer who represents nursing home residents.
___One approach suggested by nursing home operators and advocates would have insurance companies lower rates for nursing homes with good records and target homes with poor records.
___Dan Lambe, director of the consumer advocacy group Texas Watch, said he hopes the focus on liability insurance won't cloud what he sees as the real issue.
___"The faith-based non-profits like Buckner are some of our better homes," Lambe said. "But the only way to bring down insurance rates is to improve the quality of care.
___"Let's not punish the state's most vulnerable population because insurance companies aren't making the investment income they used to or are not handling claims right or making bad business decisions."
___Reprinted with permission from the Dallas Morning News. Copyright 2002.

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