Another thing jumped out when reading Thompson’s column that was emphasized elsewhere - the focus on Emeritus’s emphasis on making money with a tone of derision. An example was when he wrote about the acquisition of a competing chain of assisted living facilities by Emeritus. Thompson stated the acquisition “helped the company to make another major leap, bouncing from the low-profile American Stock Exchange into the big leagues of commerce, the New York Stock Exchange.”
With no evidence to back it up, Thompson writes “For assisted living chains such as Emeritus, there is a powerful business incentive to boost occupancy rate and to take in sicker patients, who can be charged more.” That statement has to be broken into two parts. It is a recurring theme of Thompson during the interviews, especially with Professor Hawes and former personnel of Emeritus, as to why Emeritus placed emphasis on filling their facilities. On its face it is just silly. Assisted living communities are first and foremost places that provide room and board. Just like any other place that provides such, like a hotel, it would seem they would want all of their rooms occupied. It is just basic common sense.
More importantly, we consulted with Mr. Haffner regarding the additional services provided. He provided detailed financial analysis showing that the marginal returns on the assisted living services are much lower than the basic room and board due to extensive labor costs related to the care. Second, as to the aspect of attracting more “sicker patients,” Haffner stated “Contrary to what was expressed in the show and column, you actually want less frail people because they stay longer. That reduces all the costs related to turnover of units and the related marketing costs to fill the unit. We are not interested in residents staying three to six months because their health issues determine that. That is more a nursing home model.”
Mr. Thompson stated in an interview for NPR’s Diane Rehm show that “I was working on a documentary about issues involving the elderly and I kept hearing from different people, who know that world, that I should look at assisted living. And the more I looked I realized this was a secret world, and there’s a lot of things that people just don’t know.” But Thompson later contradicted that in another interview. There he stated that the reason he focused on Emeritus was because it was the biggest in the industry. In our interview of Granger Cobb before the podcast came out, we asked him why there was such a focus on his company to which he stated “Thompson told me it was because we were the largest company doing assisted living.”
In fact, we found that apparently Thompson looked nowhere else. (We had an interview scheduled with Thompson which he cancelled. We submitted him 15 written questions which he did not answer. He submitted 56 questions to Emeritus which they answered and they provided us copies of the questions and answers. In addition, his Frontline producer Carl Byker did not respond to email requests to an interview.) When we spoke to Michael Weston, Deputy Director of Public Affairs and Outreach Programs for the California Department of Social Services, he provided us a list of the facilities in California Thompson had for which they had requested documents. They had received 6,000 pages of documents on 57 Emeritus California properties.
This brings three points forward. They looked at no other company’s operations. This was confirmed by Rick Grimes, President and CEO of Assisted Living Federation of America (ALFA), who was interviewed by Thompson. He stated “None of our other members were contacted by Thompson. We would have heard about it.” Second, if the California regulators provided 6,000 pages of documents to Thompson on just the Emeritus facilities in California, it is apparent that the Assisted Living industry is not a very secret world. Third, Mr. Weston indicated that Thompson did not interview anyone from the California regulatory agency about Emeritus or request documents for any other Assisted Living companies.
We spoke with Ronald Melusky, Director of the Bureau of Human Services Licensing for the State of Pennsylvania. He also recently became the President-Elect of the National Association for Regulatory Administration. In his capacity as President-Elect he issued a letter to David Fanning, Executive Producer of Frontline, objecting to the show. He told us “One of the things that disappointed me was the lack of referral to the oversight agencies.” He spoke of the fact that focus was on federal regulation. His letter stated “I feel that your program missed an opportunity to better educate the consumers of regulated long-term-care services and their families about the role of public regulators.” He also stated “For each of the horror stories presented by your piece, there are thousands of people who live safely and happily in regulated long-term care settings thanks to effective and dedicated public licensing and regulatory administration programs.” Melusky pointed out that his organization contacted Thompson prior to the broadcast and publication and received no response.
Tomorrow – we see where Frontline/ProPublica were heading with their study.