Nation’s Largest Chain of Assisted Living Facilities Under ScrutinyAlterra Healthcare Corporation, the nation's largest assisted living facilities chain, has "come under scrutiny in recent months" by state regulators over safety conditions and care quality at some of its centers, the New York Times reports. The company, which operates in 28 states and has the capacity to serve 22,000 patients, has been cited by state regulators in at least five states for "inadequate or untrained staffs," failing to give residents needed drugs and nutritional supplements and failing to protect residents' safety. Assisted living facilities, unlike nursing homes, are state-regulated, with wide variations in regulations and services from state to state. Unstandardized regulations have complicated investigations into Alterra. Among recent complaints, Kansas state officials cited "nearly half" of Alterra's 29 facilities for "deficiencies" in the last year, including one death; Minnesota Attorney General Mike Hatch sued the company in March for misrepresenting "the scope and quality of services" provided at Alzheimer's centers; Colorado officials threatened to shut down an Alterra center following two separate incidents in which residents wandered off the facility; and Michigan officials this summer sought to remove nearly one-third of Alzheimer's patients from an Alterra facility, saying the center "was not licensed to provide the skilled level of care [patients] required." Alterra executives said they disputed some of the state complaints "but have moved promptly to resolve those that are justified." Steven Vick, the company's COO, said, "I am proud of the fact that all of our residences are licensed and that we have done that voluntarily. Our industry is regulated, and surveyors are writing these daily reports because of a process we have fostered." Alterra also denies that its financial woes have hindered operations. The company's stock price closed Friday at $2.75, down from a high of $35.25 in 1998.
A 'Broader Issue'
The Times reports that the company's struggles may be "emblematic" of a "broader industry issue." This year, companies like Alterra were predicted to reap "record profits" as more elderly people "eager to avoid nursing homes flocked to assisted living." Companies rapidly expanded to meet the anticipated influx, but the expansion exceeded demand, leading to "mounting debt and tumbling stock prices." In addition, the companies anticipated serving a healthier population, but continue to attract older, sicker residents. Catherine Hawes, health policy professor at Texas A&M University, said, "It is a fundamental tension that when you have more impaired patients, you need more staff, and that cuts into your profit level" (Meier, New York Times, 11/26). Hawes indicated that assisted living facilities are accepting sicker patients because they need to "fill empty beds with people who can afford to pay." Meanwhile, companies have had difficulty maintaining necessary staff levels to assist the most demanding residents. In a study of over 300 assisted living facilities, Hawes found that 25% staffed only one caregiver for every 20 residents between the hours of 3 PM and 11 PM, and only one caregiver for every 34 residents during the night. Hawes said, "Those staff ratios equate with horrible quality and unbelievably rapid burnout among staff." Unlike federally regulated nursing homes, assisted living facilities have no universally accepted staffing standards. Hawes warned that the combinations of sicker residents and low staff ratios "are on a collision course. It's just a time bomb waiting to go off" (Tofani, Philadelphia Inquirer, 11/26).