Predatory Healthcare

Predatory Healthcare Pricing

“Because I Can”

Remember Martin Shkreli? He is the New York vulture capitalist who bought the drug company that makes EpiPens, inexpensive devices that can save your life if you get stung by a bee and go into anaphylactic shock. That would have been acceptable, except that Shkreli then jacked up the unit price five hundred plus percent, putting Epi-Pens out of reach of many who need them. His justification essentially was “I did it because I can.” He instantly became the poster child for all that is wrong with American healthcare.

If you think predatory healthcare pricing is limited to big cities in the East, let me introduce you to Ascension Senior Living, a Catholic healthcare system that provides long term care to the elderly, especially those with debilitating diseases like Dementia, Alzheimer’s, Huntington’s and other independence robbing cognitive maladies.

Those who have lost the freedom to come and go to the fog of brain disease or injury are often placed in long term care facilities called “assisted living” or “memory care” units when they can no longer safely be cared for in the community. Those confined to these facilities who have no money or limited incomes can receive government assistance, usually funded by Medicaid, to pay the cost of their care.

If your grandmother was able to amass some retirement savings before becoming afflicted with memory loss or the ability to make rational decisions and has to be placed in “assisted living,” there is no government assistance until her savings are depleted, so she pays the full cost of her care until her money is gone.

Most “assisted living” facilities accept both Medicaid funded and private pay residents. Both are supposed to receive the level of care appropriate to their individual needs without respect to who pays the bills. The rates charged to Medicaid funded residents are regulated by state and federal rules. The rates charged to those who pay their own way are not.

In my retirement, I work part-time providing guardianship services by court appointment for those suffering from diseases that impair their ability to make decisions on their own and need someone to make fundamental decisions to make sure they receive adequate care and treatment. Guardians can also be appointed to manage the financial assets for those in their charge. Guardians must follow an objective standard with respect to decisions made for their wards, both personal and financial, that requires them all to be made with the ward’s “best interest” as the foremost consideration.

In these dual roles as a guardian, I am responsible for an 80 plus year old person with dementia who has been placed at Alexian Village, an “assisted living” facility in Northern Milwaukee County, for several years. My ward’s condition is stable and no one anticipates that the level of care provided by Alexian Village staff will increase substantially in the near future. The level of care and the quality of life provided has been excellent. Because my ward has money saved, the rate charged by the facility for services provided was about $5,400 per month, which is average for similar facilities in the area.

Ascension Senior Living recently purchased Alexian Village. The new owners decided that they needed a greater profit margin from Alexian. In order to justify rate increases, they came up with an 11 page assessment questionnaire that purports to measure how much staff time a resident will need to receive the care they need. After “assessing” my ward, without my knowledge or consent, the new managers decided that my ward was on “Level Two” and would be required to pay an additional $1,200 per month.

The problem with this 20+% bump, $14,000 more per year, is that Alexian Village is not going to provide any additional services or staff time to my ward for these additional payments. After I complained about the arbitrary and unconscionable increase, the regional vice-president asked for a meeting where they announced they had recalculated the assessment and figured out my ward was really at “Level One,” lowering the additional payment for the same level of service to a mere $800 more per month or $9,600 more per year. The justification offered amounted to little more than a Shkreliesque, “Because we can.”

Ascension management knows they have a captive and vulnerable population. They know it would be terribly disruptive and damaging for those in their care to be uprooted from all they currently know and moved to a more reasonably priced facility. Ascension raised the unregulated rates for those who can pay just to turn a larger profit.

If you need to start looking for “assisted living” for an elderly parent or grandparent, consider anyplace else other than Alexian Village or any other facility connected to Ascension Senior Living. Their pricing philosophy is anything but Christian and they do not seem to care. Shkreli would be proud, but probably say they did not raise the rates enough.

Waring R. Fincke is a retired attorney and serves as a guardian for the elderly and disabled.