Care crisis squeezes finances of seniors

Trial lawyers and care providers accuse one another of greed as residents' costs keep rising.

By LUCY MORGAN

© St. Petersburg Times, published January 31, 2001

TALLAHASSEE -- About 10 years ago, Dr. Charlotte Maguire moved into the Westminster Oaks retirement community on the outskirts of town, guaranteeing her a place to live for the rest of her life.

If Maguire, 82, needs nursing home care, the Presbyterian non-profit organization that operates 14 different communities in Florida will provide it. But for now, Maguire lives in the house she built on Westminster's grounds. Former Gov. Reubin Askew also built a retirement home in the same complex.

But Maguire, Askew and thousands of senior citizens across Florida are now facing huge increases in the monthly fees they pay as Westminster and other owners try to cope with spiraling liability insurance increases.

At Westminster, administrator Sandie Hugg says they've notified residents that monthly fees will increase at least $300 a month. Maguire currently pays about $530 a month, up from $350 in 10 years.

And Westminster has yet to find liability insurance.

"It's incredible," Maguire said Tuesday after accompanying Hugg and other health care providers to a news conference where they called for legislation to cap big lawsuits awards against nursing homes.

The Florida Health Care Association, a group made up of nursing home owners and other health care providers, wants legislators to impose limits on compensatory and punitive damages that can be awarded in suits against nursing homes and other long-term care facilities.

They hope that limits like those in place for other medical malpractice lawsuits will bring down the cost of liability insurance.

"You don't mind insurance companies making money. I know they have to pay the piper when the lawyers get these high fees," Maguire said. "But it's a real problem for all these people who put their life savings in it and don't have money enough to pay."

At Westminster and hundreds of other communities, elderly residents pay a substantial amount of money up front and monthly fees for life. When they die any houses or apartments they have purchased become the property of the continuing care center. Westminster Shores in St. Petersburg and Westminster Woods in Bradenton have similar operations.

Across Tallahassee, the nursing home patients at Miracle Hill, a 120-bed non-profit facility that provides care mostly for Medicaid patients, there are fewer choices.

Miracle Hill administrator Freddie Franklin says his liability insurance is going up from $52,000 a year to $350,000 a year -- and he doesn't know where he'll get the money to pay it.

With Medicaid reimbursements established by state and federal law and only 2 percent of his patients paying their own way, there is no place Franklin can recover that much money, he said.

The residents of these care centers and nursing homes are at the heart of an escalating battle between health care providers for the elderly and the state's aggressive trial lawyers.

The Academy of Florida Trial Lawyers insists the problem stems from the poor care extended to some patients by greedy nursing home owners.

It will be up to Gov. Jeb Bush and the Legislature to decide whether they are dealing with greedy lawyers or greedy nursing home owners.

Bush agrees that the situation is a crisis, but said he doesn't know whether legislators should impose caps on damages.

"It's a complicated issue that needs to be worked out," Bush said Tuesday.

His own long-term care commission considered the situation for months and decided to make no recommendation.

Nursing home owners say they are being driven out of business by greedy lawyers who solicit clients from the obituary pages of the newspaper.

Franklin said lawyers go first to the state agency that regulates nursing homes to look for reports of bad care and then solicit clients when their relatives die. Many of them use disgruntled former employees to bolster their cases, he added.

Trial lawyers denied they were the cause of the problem. They blamed for-profit nursing homes.

"If the for-profit nursing homes will turn over their assets, remove themselves from management and put all the money they get into long-term care, I'll close down," promised Jim Wilkes, a Tampa trial lawyer who has won a number of multimillion-dollar verdicts against nursing home owners.

"We are working as hard as we can to fix a broken system," Wilkes said. "They just want to engage in personal attacks."

"Stocks of major nursing home companies have increased 400 to 600 percent, even for the ones in bankruptcy," Wilkes added.

And if legislators need an example of nursing home greed, they need look no further than the example of Dr. Robert Elkins, who built Integrated Health Services Inc. into a Fortune 500 company.

Elkins had the nerve to go into bankruptcy court and ask and get approval of a $55-million severance package.

"I wish we made the kind of money he makes," Wilkes said. "Those kinds of numbers are hard to conceive."

- Times staff writer Julie Hauserman contributed to this report.

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