By Justin P. Hauke

It’s disturbing to think of nursing home abuse. Many of us have elderly family members or friends living in assisted-living facilities and naturally turn to government regulation to protect them. But before passing new legislation, it’s important to determine whether the proposed regulations will actually have the desired effect of protecting Missouri’s elderly citizens. New regulations, no matter how well-intentioned, may actually serve to decrease the overall level of care in nursing homes, while increasing costs to levels that will force many seniors to forego nursing home care altogether.

Last month, the National Senior Citizens Law Center (NSCLC) hosted news conferences designed to bring attention to what they view as the dubious quality of many of Missouri’s nursing home contracts. In a new research report, the NSCLC argues that many of these contracts violate minimum care obligations required under the federal Nursing Home Reform Act, and similar state statutes. For example, some contracts limit facilities’ responsibility for their residents’ health or personal items, or require a resident’s family or friends to accept personal financial liability for long-term care (even when costs are covered by the state). Both requirements violate federal guidelines for health facilities treating Medicaid patients.

Although unscrupulous nursing home administrators undoubtedly exist, it’s not clear whether the evaders of existing law will be any more likely to comply under new laws, such as the ones the NSCLC is proposing. For example, Missouri passed legislation in 2003 designed to make it easier to report nursing home abuses, and increase the frequency of inspections. The law was well-intentioned, imposing high fees and in some cases prison sentences for non-compliance. Yet the NSCLC’s own findings suggest the legislation has done little to address exploitation in the industry or to remedy existing levels of inadequate care. Why should we expect new legislation to bring different results?

In fact, new legislation has the potential to worsen the current situation. “Minimum care” laws, such as those being proposed, generally have two negative effects: They mandate levels of service that may not be important to actual nursing home residents and their families, driving up overall nursing home costs; and they encourage many facilities to lower their standards to the “minimum state requirement,” adversely affecting the overall level of nursing home care. So before passing new laws, it’s important to determine whether these laws are likely to create “perverse” incentives that diminish, or even supplant, good intentions.

The St. Louis Business Journal reports that Saint Louis nursing home costs are the second-lowest in the country, averaging $42,877 annually. Nationally, the average annual figure is $65,200, with costs reaching as high as $191,385 in some states. These are not small fees, and many Missouri seniors already struggle to stretch their savings to cover nursing home payments for 10 or 15 years of potential care. New regulatory burdens are likely to push these costs even higher.

Consider legislation that would require greater financial disclosure from nursing homes, and allow for 24-hour on-site inspections. This would necessitate hiring additional staff members, driving up costs. As the cost of care increases, nursing homes that have gone the extra mile by providing better service than required may be forced to cut their level of care to the state minimum in order to maintain existing profit levels. In other words, rather than using higher fees to address patient health, facilities would have to devote the money to compliance with government regulations that may not have any affect on overall quality.

A better solution for protecting consumers would be to focus on educating families of nursing home residents about the terms of their contracts and their legal rights, rather than passing the buck to bureaucrats. Many violations highlighted by the NSCLC’s study are well-publicized issues among consumer advocacy groups. Some groups also offer pro-bono legal advice to help find contracts that properly meet a family’s individual needs. The state should work to enforce existing laws, which require facilities to fully disclose the terms of their contracts and inform consumers of their legal and financial rights.

I sympathize with the NSCLC’s desire to protect nursing home residents, but passing new legislation is not the answer. Promoting consumer advocacy and raising awareness is a worthwhile goal. It’s important to provide legal aid that helps ensure families enter nursing home contracts that properly reflect their needs. But mandating minimum levels of service will only increase costs that are already inflated, while spurring an overall decreased level of care. Missouri’s elderly citizens shouldn’t be unnecessarily priced out of adequate facilities in order to satisfy misdirected good intentions.

Justin P. Hauke is a policy analyst at the Show-Me Institute and a graduate student at Washington University’s Olin Business School.

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