by James C. Sherlock
“This nursing home information is confusing, mindbending, and scary. Please draw us a picture to clarify.” Well, readers are right. It is all three of those things. It is meant to be so by some people in the system.
Virginia has some excellent nursing homes and chains, but those are not the subject of this article.
I offer below a chart of a fictional 12-facility chain whose structure permits bad things to happen, often by design. It shows a commercial real estate structure on which some nursing home chains are modeled. Indeed, many of them have been founded by people with their roots in real estate, partnered with others licensed as nursing home administrators and with an accountant. The structure was designed by the real estate industry to generate fees and to protect assets in court.
It is used by the worst of nursing home chain owners to bleed money from the operating companies, leaving little for staffing, building repairs, and other necessities. Annual profits have been seen to exceed 20%. That beats anything else in real estate.
First, the big picture, and then the explanation.

















