The Political Economy of Nursing Homes

The nursing home industry receives three- quarters of its income from government. The industry earns high profits while providing poor patient care. Considerable swindling of government funds occurs. One category is nickel and diming, which consists of clipping every possible dollar from government money as it passes through nursing home accounts. Another method—large scale and often within the law—involves the manipulation of ownership and mortgages. There are several causes for the failure of government to control nursing home swindles. While there is no lack of regulations, the will to enforce them is lacking. Industry lobbyists are especially influential at the state level, where the Medicaid rate is set. The federal govern ment has failed to collect basic information about the industry and denies the public ready access to the reports on nursing home inspections. The industry's immunity from regulation, in large part, results from the lack of countervail ing pressure from the public.