John O'Connor illustration
McKnight’s Editorial Director John O’Connor
John O'Connor
John O’Connor

A renewed sense of optimism is fueling the senior living sector these days.

Many operators genuinely are excited about a post-pandemic rebound. One in which occupancy levels increase and COVID-19 headaches recede.

Along those lines, we’re hearing more and more about the rise of innovative corporate structuring. It’s a concept that can have a lot of upside. But alas, it can have its downside as well.

Put another way, it can be a very thin line that separates legitimate business practices from dubious shenanigans. A new report from Kaiser Health News strongly suggests some operators are working both sides of that street.

The gist of the KHN piece is that owners of multiple communities in New York redirected money that should have been used for resident or patient care into their pockets.

Specifically, the piece alleges that during the height of COVID-19, lavish payments flowed into real estate, management and staffing companies financially linked to nursing home owners throughout the state. The piece implies that New York hardly was the only place where such activities occurred.

“Even during the worst year of New York’s pandemic, when homes were desperately short of staffing and their residents were dying by the thousands, some owners managed to come out millions of dollars ahead,” Bill Hammond, a senior fellow at the Empire Center for Public Policy, a think tank in Albany, New York, is quoted as saying.

The story goes on to report what might be expected: Families of residents complaining about inadequate staffing and care, countered by pro-industry claims that everything was on the up and up.

It gives me no pleasure to say this, but frankly, the evidence here against the industry is, at a minimum, a bit embarrassing. For even if no person is convicted of wrongdoing, some of what’s being reported here hardly puts this field in a good light.

My advice? Proceed with caution as you consider what kind of entity you want your name affiliated with. Not just for the next year or two, but for the long run.

John O’Connor is editorial director for McKnight’s Senior Living and its sister media brands, McKnight’s Long-Term Care News, which focuses on skilled nursing, and McKnight’s Home Care. Read more of his columns here.