Providing support and assistance to older people has always been especially appreciated, which is why specialized institutions called nursing homes were created. Currently, there are a large number of large networks of nursing homes in the United States of America. These organizations are gaining more and more popularity and thereby bring a large amount of profit to their founders. However, such financial growth becomes a reason to want more, which results in resorting to illegal measures. Thus, this work aims to study how regulation and litigation contribute to the proper business conduct of large networks of nursing homes.
Organizations that provide services for the care and maintenance of the elderly are commercial entities that are controlled by corporations, which in turn are regulated by shareholders. They invest in a nursing home, hoping to get a return on their investment. The interests of these stakeholders are put higher than concerns about the well-being of residents of nursing homes since shareholders provide the financial aspect of the activities of these anticipations (Harrington, 2020). As a result, there is a decrease in the quality of service, negligence of personnel and management, or vice versa, a lack of specialists to reduce costs. Harrington and Edelman underline that “many resident grievances regarding basic care and residents’ rights, clinical measures of poor quality, and state deficiencies” (2018, p. 1). Moreover, it is important to emphasize that most of the nursing homes in America are commercial, which only contributes to the spread of this factor.
In order to gain the greatest benefit, some institutions resort to incorrect and sometimes illegal measures. One of these is the overestimation of the price of the services provided. Hence, a clear indicator of the quality of medical care and care for the elderly is how much money institutions overpay for Medicare (Bos et al., 2017). To improve this aspect, some managers provide incorrect information and describe services in reports that may not be necessary for treatment and care. Studies show that in 2012, about 30% of the accounts of commercial nursing homes were improper, and only 12% of non-profit institutions for the older generation were involved in the same violation. Thus, an unjustified increase in the cost of services is a driving force for people to receive unnecessary and dangerous services for their well-being, which at the same time have a beneficial effect on the financial condition of the owners of the organization. Thus, overstating health insurance bills is not only illegal but also directly harms patients. In this case, in addition to useless treatment services that require compensation, commercial nursing homes may subject patients to testing and treatment that they do not need to reimburse.
Another way to circumvent the law is to refuse to provide assistance and care services, justifying this by not covering these costs with state benefits. In addition, in order to reduce the cost of institutions, a significantly smaller number of staff is hired than is actually required. Thus, due to the lack of nurses, various injuries and diseases are more common in commercial nursing homes. The most common physical injuries that occur are falls and bedsores, and overtreatment of patients are just some of the most common complaints in commercial homes.
Management Practice to Balance Stakeholder Value
To solve the problem of unlawful actions of the stakeholders in nursing homes, there is a need for the implementation of the practical management theory. Moreover, it can help with the issue of balancing shareholder value with patient care. Research shows that “shareholder theory argues that shareholders are the ultimate owners of a corporate’s assets and thus, the priority for managers and boards is to protect and grow these assets for the benefit of shareholders” (O’Connell & Ward, 2020, p. 1). A scientific paper by Harrington et al. called was chosen to consider this issue. “The effects of regulation and litigation on a large for-profit nursing home chain.” This study is a valuable source for examining and provides the necessary information for a better understanding of the problem. The authors of the scientific paper consider the contribution of state regulation and collective civil litigation to compliance with standards regarding the number of personnel and their qualifications for the provision of services (Harrington & Edelman, 2014). In addition, the focus is on corporate management strategies and the financial condition of an extensive commercial network of nursing homes.
Researchers have shown the presence of a significant number of shortcomings and violations in connection with the short consolidation of legislative norms and rules in relation to institutions for the elderly. Thus, in the course of the work carried out, data from 2003 to 2011 were studied, providing information on court proceedings and the establishment of necessary regulations. The focus of the authors was the trial with the American network of nursing homes Skilled Healthcare Group, called Lavender v. Skilled Healthcare Group.
The theory that can be used to balance the value of shareholders is the theory of corporate management. It can also be applied to the general improvement of the work of nursing homes and other medical institutions. It is characterized by efficiency and expediency in relation to the problem raised in the study. A special place in it is occupied by the concept of leadership as a driving force for the introduction of regulatory and legal changes (Epstein et al., 2018). Moreover, corporate management can contribute to improving the functioning of medical institutions for the elderly through marketing. In addition, the application of this theory will help to eliminate the problem of staff shortages and the dismissal of residents. Therefore, corporate governance in relation to stakeholders will help maximize their profits by controlling costs and maintaining a high level of occupancy of nursing homes.
Skilled was accused of forming a joint venture with its affiliated nursing homes and was held accountable for its incorrect services and illegal activities. It is explained that “because the litigation exposed the inadequate staffing and poor quality, the court took steps to elicit minimal compliance with California’s staffing law and stimulated an investigation of resident abuse by the state attorney general (Harrington & Edelman, 2014, p. 804). Such measures as the regulation of the activities of organizations and the injunction showed positive dynamics. Henceforth, there was a necessary filling of the necessary staff and improvement of the quality of services provided. On the other hand, the legally initiated changes had a negative impact on the financial impact on medical institutions.
Impacts of Regulatory Action on Organizational and Financial Decision Making
Regulatory and legal acts are necessary to establish order in the regulation of the healthcare system and for the for-profit healthcare setting. In relation to the investigated case of Lavender v. Skilled Healthcare Group, the federal law of the United States of America emphasizes the importance of compliance with established generally accepted quality standards for obtaining funds under the health insurance program. As such, specialized sanctions were established in the form of monetary fines (fines), refusal to pay for admission, temporary managers and cancellation of certification in accordance with the Consolidated Budget Coordination Act of 1987 (Harrington & Edelman, 2014). In addition, designated centres should conduct supervision and analysis of compliance with the federal quality of medical care. Moreover, they exercise control over the conclusion of contracts with government agencies and representatives.
In this process, it is also necessary to pay attention to the examination of periodic surveys and investigations of complaints to improve the quality of service provision. The main obstacle to the implementation of the above measures is the fact that the system of regulation of nursing homes in the United States is characterized by decentralization. This feature implies the presence of unique regulatory, legal and judicial aspects for each area. Therefore, this circumstance leads to problems and differences in the severity of punishment for violation of the law. Moreover, it is noted that some states often abstract from the guidelines established by the state. This behaviour leads to a deterioration of the data collected and can seriously interfere with the process of identifying deficiencies and violations and do not adequately investigate complaints from patients, employees and organizations.
In addition, differences in the legislative system in the states lead to the imposition of generally accepted sanctions for violations of legal norms. In addition, incorrect regulation of the activities of nursing homes, insufficient funding, the influence of industry and other vital factors. Moreover, they can also explain inefficient regulatory activities and differences in states. The source taken as a basis in this scientific paper notes that large network nursing homes are much more difficult to regulate (Harrington & Edelman, 2014). This is especially evident in institutions with a missing number of employees and the presence of multiple violations of federal norms and rules.
Violation of regulatory and legal requirements is also facilitated by the fact that shareholders of large networks of nursing homes have control over the profitability and budget of their institutions. Thus, marketing, information and contract services provide companies with greater competitiveness and thereby reduce anxiety among the management of organizations. In addition, the network business in the medical field has an advantage in terms of resources for transferring litigation as painlessly and at a lower cost as possible, and the fines of regulatory authorities are often small in comparison with them. Due to the presence of multiple connections, the owners of large networks have the opportunity to provide political opposition to the legal aspect of their activities. For these reasons, regulatory activities to resolve the problem of illegal actions are important for the introduction of public health and well-being in this area.
Thus, federal legislation should directly affect the functioning of nursing home chains and influence the decision-making process on their changes. Legal actions are used to eliminate quality problems, and the number of court cases with significant claims has increased (Harrington & Edelman, 2014). The main reasons for filing lawsuits against organizations providing medical care and care were related to several factors. Among them are shortcomings in functioning, commercial property, negative living experience and location, and the number of nursing staff. The primary outcomes are monetary compensation to plaintiffs and punitive damages. The source notes that nine out of ten claims receive compensation, but only 10 per cent are brought to court (Harrington & Edelman, 2014). This circumstance is adverse since such a solution to the problem cannot lead to sufficient changes in the sphere.
The difficulty of dealing with the problem also lies in the fact that large networks of nursing homes continue to find various ways to circumvent legal and legislative aspects. Complicating corporate structures and spreading through the creation of subsidiaries are among them. The second method was applied in the case of the Skills organization, which nevertheless incurred the necessary responsibility for its actions. When it comes to litigation, many heads of institutions providing assistance to the elderly use their legal connections and financial resources to stretch the decision-making process. Thus, conditions are created in which the conduct of court proceedings significantly increases in monetary cost. The last factor that can also significantly worsen the situation is the availability of insurance from the accused party. Thus, the need to strengthen the strength of regulatory and judicial acts has value and importance for exerting more significant influence and reducing the level of fraud in nursing home networks.
As the case study shows, regulatory and class actions should be aimed at creating best practices for implementing changes. However, this issue requires substantial processing and research since companies still have ways, methods and connections to hide from the legislation. Regulatory legal and regulatory acts should have a positive role in the emergence of institutions where the well-being of the population is not put first. In addition, they will help with solving the problem of a shortage of personnel, the general improvement of services and goods, which are often provided free of charge and provided for the preservation of the largest number of personnel. Thus, managers should have a clear vision of how these actions can significantly better affect their practice and reputation than illegal actions.
Sustainable and Patient-Centric Practices (Ethical Reasoning)
To solve the problem under study, it is necessary to introduce sustainability practices and a patient-centric approach in the for-profit healthcare chain of the organization. Thus, it is primarily necessary to improve the quality of medical care in nursing homes and at all levels of business. In addition, it is essential to solve the problem of staff shortage and compliance with regulations and legal acts. To do this, there are several courses of action that will help in the process of developing resilience and patient orientation.
The first step to achieving these goals should be to collect data and analyze the results of patient treatment. This is due to the fact that the more the state and organizations receive more authority to develop and improve the provision of assistance using accurate data. Such knowledge includes not only trends in morbidity, life expectancy or mortality but also patient reviews of nursing homes and suggestions for changes. In addition, it is necessary to analyze the already available data of a large network of nursing homes. Another advantage of this approach is to assist in making decisions on sustainability and identifying weaknesses and strengths.
Moreover, the involvement of data collection and research specialists can assist in ensuring patient-oriented practice. When considering shareholder engagement, information analysis helps to improve the billing process and control and, at the same time, increase the organization’s revenue. The development of innovative technologies helps to collect data using Internet technologies through various studies and surveys on patient satisfaction. The last aspect is the monitoring of health, general well-being and costs throughout the entire period of medical care.
The next aspect is the application of an effective strategy for achieving goals and evaluating them in the long and short term. This step should be performed after analyzing and researching all possible data. This will help to avoid possible risks and delineate areas for improvement. Improving the quality of healthcare and the provision of medical care to the elderly population is a constantly evolving and transforming process. This is due to the fact that people live in a world that is subject to many social, economic and political changes. Thus, companies must first plan changes, then implement them and at the final stage analyze the effectiveness and the results obtained.
In order to achieve sustainability and patient orientation, it is also necessary to provide more comprehensive access to medical services. This can be achieved by eliminating the practices of large networks of nursing homes to raise prices for services (Bogodistov et al., 2021). In addition, having access to medical care is the single most crucial factor for improving the quality of medical care and treatment outcomes. Moreover, it is important to provide the population with the opportunity to purchase insurance to expand their opportunities to receive medical care and care. In addition, improving access to health care means improving how and where patients can get it. Thus, it is important to limit the separation of the healthcare sector in order to serve patients well and to make care more convenient.
In order to form a patient-centred commitment and policy, it is necessary to take measures to involve people in the process of providing health services. It is noted that medical specialists who earn money from the beginning are better prepared for this aspect than other interested persons (Konetzka, 2021). The advantage of nurses and doctors is due to the fact that they are able to act as a link that unites all the different aspects of care and supports patients throughout the entire period of medical care.
As a final step, it is essential to mention interaction and cooperation with other organizations as a way to build a sustainable and patient-oriented institution. In this case, the business has a special influence not so much on interaction but on the exchange of previous experience. This aspect is to conduct research and learn from other organizations regularly. In addition, such a measure will help make the process of providing care and care in nursing homes much more effective since the institution will already know in advance the effectiveness and quality of a particular measure. Applying all these measures, it is necessary to take into account ethical thinking, which will help to avoid negative consequences, since it takes into account the interests of people and staff in the first place. Moreover, the development of ethical principles can improve the workplace environment and contribute to the development of a positive customer experience.
To find organizations for cooperation and interaction, organizations can explore the Internet as a valuable source in the era of digitalization of the healthcare sector. Most organizations are happy to share information to improve the lives of all patients. Another may be territorial interaction, but this aspect is not as easy about existing in some groups as others. Thus, some nursing home patients today are less restricted by location and often benefit from changes in the care of basic procedures.
Thus, this scientific work considered the problem of large networks of nursing homes in relation to regulatory and judicial norms. Particular attention is paid to the fact that an increasing part of these institutions is commercial houses that are managed by large corporations. This characteristic determines the prioritization of the opinion of these parties and the achievement of the greatest financial benefit for them in any way.
The most damaging thing is that in such homes, despite the prevalence, they resort to illegal practices and neglect the value of patients. In this regard, there are problems with inadequate medical care, lack of staff and unjustified increases in fees for some services. Furthermore, for example, there are many lawsuits that, although they can change a specific organization, however, it requires a larger scale for the most effective regulatory and federal documents for control. Thus, commercial nursing homes often care more about outcomes than patients and staff because of all these factors. Moreover, taking into account the inadequacy of regulatory impact in some cases, it also supports the point of view of the need to use laws on the rights of residents to take legal measures. Lawsuits about improper representation in nursing homes are also a way to ensure compliance with rules and regulations.
References
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Bos, A., Boselie, P., & Trappenburg, M. (2017). Financial performance, employee well-being, and client well-being in for-profit and not-for-profit nursing homes: A systematic review.Health care management review, 42(4), 352-368. Web.
Epstein, M. J., Elkington, J., & Herman, B. (2018). Making sustainability work: Best practices in managing and measuring corporate social, environmental and economic impacts. Routledge.
Harrington, C. (2020). The nursing home industry: A structural analysis. Critical perspectives on aging, pp. 153-164.
Harrington, C., & Edelman, T. S. (2018). Failure to meet nurse staffing standards: A litigation case study of a large US nursing home chain. INQUIRY: The Journal of Health Care Organization, Provision, and Financing, 55. Web.
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