Matt Gutwein Lied, Big Surprise

The Indianapolis Star belatedly decided to follow up on that chain of nursing homes the Health & Hospital Corporation of Marion Co. has acquired in recent years and is using to fund the new Wishard Hospital I blogged about ad nauseum during last year's special election referendum on the new hospital. An investigative story in today's paper by Heather Giller, Tim Evans, March Nichols and Mark Alesia (not accessible online) carries the headline "Cash flowed in, care lagged." When I questioned HHC CEO Matt Gutwein's assertion that care provided at HHC-run nursing homes was better than other operators in this state, I was dismissed by the Star, which editorialized heavily in favor of the referendum and boasted of Gutwein's achievement of building a nursing home empire that could fund our new county hospital without raising property taxes. Do you think that enormous media buy by Wishard Health Services influenced the Star and other local TV stations who championed the new hospital proposal so fervently last year?

The report finds that HHC's nursing home empire has grown to 39 homes in 22 counties across the state. As I told you during last year's referendum, HHC has an advantage over other non-profit and private operators of nursing homes in this state because it is being awarded additional Medicaid dollars to provide the same care those other nursing homes provide to their residents. According to the report, HHC has received $218 million in additional funding since 2003. One would think that HHC would be required to use those additional funds, about $55 per day per resident, to improve care, but the law imposes no such requirement. As a consequence, HHC uses only 20% of the additional reimbursements for its nursing homes. The rest goes to other projects, in this case, the new hospital. The report found that the longer HHC owns a nursing home, the worse rating of care the facility earns according to federal measures. The report is replete with horror stories of harm caused to patients from receiving bad care at HHC facilities, which are actually run by American Senior Communities (ASC), another point I repeatedly hammered during last year's referendum. HHC has merely created a fiction that it owns and operates these nursing homes so it can siphon off the additional federal Medicaid dollars.

Gutwein, for his part, is sticking by his meme that HHC nursing homes are better run. He disputes the Star's conclusion and says overall care has improved. Besides, diverting the extra dollars to such projects as the new county hospital "benefits taxpayers and public health without compromising the care of about 5,000 HHC nursing home residents." He tells the Star the federal and state data the Star relied upon is not the best way to measure the care at nursing homes. "You would be fair and right if you wanted to write a story that slammed us on quality," Gutwein told the Star. "I understand that there are numbers that you could do that." If anyone should understand how to use facts and figures to twist the truth, it's Gutwein. I called him a liar during last year's referendum and was attacked by the Star. Isn't the Star doing that now without mentioning all of his assertions he made to local media last year?

Readers of this blog also know that I questioned the legality of the arrangement. Today's report gives the impression that HHC is simply taking advantage of a loophole in the law that allows government-run nursing homes to receive a higher Medicaid reimbursement rate. The point I made over and over again was that this was really just a fiction. ASC actually purchases the nursing homes, which it leases to HHC. In turn, HHC enters into operating agreements with ASC to run the nursing homes. I view that as a fraud on the federal and state government to capture higher reimbursement funds from Medicaid. Nowhere in the Star article does it question that arrangement. Instead, it questions the wisdom of allowing "government-run" nursing homes to receive more money without using that money for better care. The article quotes Pat Nolting of the state's Office of Medicaid Policy and Planning as saying there are no state or federal guidelines on how that money must be spent. "This is just a state taking advantage of some very poorly-thought-out-rules," said Joseph Antos, a health policy expert at the American Enterprise Institute. The report mentions what I earlier reported on how the GAO had recommended ending the policy because of abuses, but members of Congress thwarted those efforts. Of course, nowhere in the story does it attribute questions raised by this and other blogs last year on any of the points covered in the story.

The Star's reporters talked to a couple of other government-owned nursing homes in Indiana. Both used all of the additional reimbursements for their nursing homes. Those homes spend about 31% more on staffing than the statewide average. According to the Star report, HHC's nursing homes spend 6% less than the statewide average. It looks like the HHC scam may spread to other county hospitals. Sullivan County's county hospital is contemplating a deal with Magnolia health systems to purchase nursing homes.The county hospital's CEO told the Star the additional funds "could help our hospital develop our campus, improve hospital projects." Isn't it ironic that the recently-passed Obama health care reform plan does nothing to address this loophole that is costing the American taxpayers billions of dollars while comprising the quality of care at our nursing homes?

I'm pleased that the Star has finally got around to doing its job. I"ll await follow-up stories in what I hope becomes a series of stories to determine just how well these reporters did their job. I'm not blaming these reporters. I suspect some of them wanted to do this report last year but were held back by Ryerson, who was totally enamored with Gutwein. It's just another example of why so many Star subscribers have dropped their subscriptions to the Gannett-owned newspaper.

As an observation, the IBJ has a story this weekend about how the Wishard hospital project is saving the local construction industry from "dire straits" it would otherwise be in without the project. Increasingly, we are finding that government contractors are driving policy decisions that are often not in the interest of the general public. Former President Dwight Eisenhower warned about the influence of the military industrial complex over our government. As government has grown over the years to reach every aspect of our life, the number of businesses that exist on government-funded projects has grown exponentially. These businesses largely fund many current officeholder's campaigns. Take a look at Mayor Ballard's campaign disclosure reports and discover how they've put more than a million dollars in his campaign committee's pocket since his election in 2007. It really is a threat to our democratic form of government. The IBJ story reveals that. "Besides Smoot, they are Indianapolis-based Garcia Construction Group Inc., The Hagerman Group, Keystone Construction Corp. and Shiel Sexton Co. Inc., as well as Pepper Construction Company of Indiana LLC, a subsidiary of Chicago-based Pepper Construction Group LLC," referring to the companies awarded contracts to date on the Wishard project. All of them are big contributors to Ballard's campaign committee. Coincidence?