A powerful new report titled Public Funds into Private Pockets: How Nursing Homes May Be Hiding Profits and Depriving Residents of Care and Quality is shedding long-overdue light on one of the most pressing issues in long-term care: the lack of financial transparency in for-profit nursing homes and its devastating impact on residents.
Prepared through a collaboration between the Michigan Elder Justice Initiative (MEJI) and the National Consumer Voice for Quality Long-Term Care, this report uncovers how some of Michigan’s largest for-profit nursing home chains—Ciena Healthcare, Mission Point Healthcare Services, SKLD, and Villa Healthcare—have used related party transactions to redirect hundreds of millions of taxpayer dollars to companies they also own. These financial maneuvers, the report shows, come at the expense of proper staffing, basic care, and quality of life for some of our state’s most vulnerable residents.
Funded by Arnold Ventures, Metro Health Foundation, SEIU Healthcare, and the CARE Fund, the report is the result of rigorous analysis, first-hand interviews with residents, and deep collaboration with Michigan’s Long Term Care Ombudsman Program.
Findings That Demand Action
From 2021 to 2023 alone, these four chains paid $544.5 million to related party companies—$122.57 million more than the costs allowed under Medicare guidelines. While homes reported operating losses, this financial shell game enabled owners to hide potential profits and claim they lacked resources to provide adequate care. Notably, these same chains consistently scored below average in staffing and health inspections, with some homes cited for resident abuse.
“Residents are suffering while money meant for their care is being siphoned into profit-driven shell companies,” said attorney Donna MacKenzie, who represents families in nursing home abuse and neglect cases. “This report provides concrete evidence of what so many of us in the field have known for years—there is a direct connection between financial opacity and poor care. Michigan needs accountability now.”
According to the report, the average staffing in these homes was 3.53 hours per resident per day (HPRD)—38% lower than nonprofit facilities in the state, which average 4.73 HPRD. In some homes, residents waited hours for assistance, were bathed as infrequently as once a month, or went without help eating their meals. In Sterling Heights, the lack of care became so severe that residents began calling 911 for routine help, prompting the city to pass an ordinance fining the facilities.
A Call for Reform
The report concludes with a clear list of policy recommendations for Michigan lawmakers and regulators:
- Audited consolidated cost reports should be required annually for all nursing home operators.
- Increased transparency about related party transactions—including services received, costs, and profits—must be mandated.
- Public access to cost report data should be dramatically improved.
- A minimum percentage of public funds should be required to go directly toward resident care, staffing, and services.
With examples from other states like California, Connecticut, and Pennsylvania already taking the lead on these reforms, Michigan has a critical opportunity—and obligation—to follow suit.
The full report is a must-read for policymakers, advocates, and families alike. To learn more or access the report, visit meji.org or theconsumervoice.org.