Dangerous Choices How IACHF Nursing Homes Misplaced Priorities Could Be Putting Residents at Risk

Dangerous Choices How IACHF Nursing Homes Misplaced Priorities Could Be Putting Residents at Risk A Report by the Nursing Home Caregivers Union, SEIU Local 4

Executive Summary The Illinois Association of Health Care Facilities (IAHCF) is an employer association of nursing facilities, representing 114 nursing homes. IAHCF facilities comprise over 66% of all nursing home beds in the city of Chicago, as well as homes throughout the Cook County and surrounding areas. The IAHCF s primary function is to negotiate employment contracts with 8,000 members of SEIU Local 4. Residents at IAHCF nursing homes have suffered from poor quality of care, low staffing, and high turnover. This report will examine these problems, which reveal a disturbing pattern of poor priorities with state Medicaid funds and taxpayer dollars. An analysis of public documents and data released through Local 4 s bargaining relationship with IACHF reveals: 82% of the nursing homes belonging to IAHCF had at least one violation involving potential or actual harm to residents in 2003-2004. 16 facilities had one or more violations involving actual harm or immediate jeopardy to their nursing home residents. Employee retention is at low levels in IAHCF facilities, with over 58% of employees having two or fewer years of experience. In addition to the nursing homes making more than $12 million in profits for 2003, the owners of IAHCF facilities paid themselves millions in personal salaries and charged their nursing homes almost $160 million in fees through other companies they own. These transactions with related companies produced an additional $32 million in profits for the owners. These owners are scheduled to receive over $41 million more in state money in 2005 than they received in previous years. With this additional money coming in, the state must take a more active role to ensure that this increased funding is spent in ways that advance the delivery of quality resident care. These facilities rely heavily upon public funding for the provision of care: 83% of the median IAHCF facility s residents come through Medicaid, compared to 59% for the average nursing home statewide. To correct these care problems, this report recommends that; IAHCF should invest the $41.4 million in new funding to increase staffing and to improve front-line care. The State of Illinois should take a more active role in ensuring that state funds designed to enhance resident care are used towards that end.

Resident Care Violations According to the most recent inspection data available, 96 of the 114 IAHCF facilities reported violations of federal resident care standards. i According to this data, 82% of these facilities surveyed had at least one violation involving potential or actual harm to residents. % of IAHCF Homes with Violations, by Worst Violation Level Reported Minimal Harm 5% No Violations 13% Actual Harm/Immediate Jeopardy 15% Potential for Actual Harm 67% IAHCF homes have been cited for violations of nursing home care standards including: Insufficient staffing Medication errors exceeding 5% Failure to ensure residents are adequately hydrated Failure to adequately treat or prevent residents pressure sores Mistreatment of urinary incontinence Inadequate infection control programs Failure to store, prepare, or distribute food in sanitary conditions Failure to prevent resident accidents Failure to provide necessary services to dependent residents Failure to keep a safe, clean, comfortable homelike environment Unwarranted use of physical restraints

Examples of resident care violations discovered or investigated by state surveyors in 2003-2004: Alden Princeton Manor (Floyd Schlossberg, owner) One resident had several open pressure sores in direct contact with the resident s dried feces. Some of the pressure sores were oozing blood. The resident s bed pad was heavily soiled with feces, and smears of fresh blood were found throughout the bed. The inspection report indicates: No dressings were noted to protect the pressure sores on [the resident s] buttock, lost in the bed or disposed in the trash can. During the observation [an RN] stated that [the resident] had not been assessed by her, nor had she had any care yet for the day. ii Washington Heights Manor (Rothner family, owners) A resident was found to have a pressure ulcer on her right ankle that was infested with maggots, which were also observed to be crawling around on the resident s sock. Interviews with the Director of Nursing (DON) and the Assistant DON revealed that the facility was unaware of how long the resident had the pressure sore, or whether the regular nurses were providing any form of treatment. The resident had to be sent to the hospital for debridement and bone biopsy as a result of the facility s failure to discover and treat the ulcer in a timely manner. iii A resident was found with her diaper, underpad, and dress soaked with urine and with multiple undressed pressure sores on her sacrum. When questioned, a CNA stated that the resident had not been repositioned or toileted in 6-7 hours. iv Five residents were found whose clothes were saturated with urine and/or stool. Two were found with new untreated sacral sores and one had multiple undressed sacral pressure sores. Staff stated that the residents had not been repositioned or toileted for 6-8 hours because the staff did not have time. v Glenwood Care, (Sherwin Ray, owner) A resident was found to be without a pulse and without blood pressure late one evening. A subsequent investigation revealed that the nurse on staff was so busy doing other things that it took 20 minutes before she instructed the CNAs to phone for help. When the nurse aides called for help, they called a private ambulance service instead of 911, as they had been told to do. It was just luck that the private ambulance was close to the facility, according to the paramedic who came. The resident was pronounced dead in the ER. The facility subsequently rewrote its emergency policy and procedures and instructed staff to call 911, instead of a private ambulance service, in emergency situations. vi

Poor Priorities at IAHCF Nursing Homes Our nursing home often has just two CNAs per wing. I m a rehab CNA, but because the two CNAs aren t enough, I always get pulled to do CNA work, leaving nobody to do rehab. There just aren t enough people to dress, shave, clip nails, shower, and turn residents. In fact, it takes two CNAs to turn residents, so if one of them is on break or working on something else, we can t even turn the residents on time. When residents ask for help, sometimes there just isn t enough time to do it. We tell them just a minute but we know there s a chance we ll never get around to it. It breaks my heart these residents could be my mom and dad. There s just not enough people to get it all done. Katina Bailey, Rehab Aide, Alden Alma Nelson Manor, Rockford According to a 2002 report by the General Accounting Office, a multi-state study conducted by the GAO of the determinants of resident care levels in nursing homes revealed that: [N]ursing hours per resident day especially nurses aide hours were related to quality of care deficiencies, with homes providing more nursing hours being less likely to have identified quality problems than homes providing fewer nursing hours. vii Research shows that low nursing staff levels correlate with a greater likelihood that residents are not fed properly, turned or repositioned frequently enough, bathed and groomed adequately, or exercised to ensure they retain adequate range of motion. In such cases, residents lose weight, become dehydrated, develop bedsores, become incontinent, or suffer from deterioration. viii These tasks are the basic supports that nursing home residents rely on their homes to provide to help them live day-to-day with dignity. A December 2001 report to Congress by the U.S. Department of Health and Human Services (HHS) put forth a minimum of 3.55 hours of direct care per resident per day as a quality care threshold. ix The on Medicaid and Medicare Services also has issued reports cautioning against allowing staffing levels to fall below 2.75 hours per day, warning that staffing levels this low could result could result in serious harm to nursing home residents. x The state of Illinois requires, at minimum, a total of 2.5 nursing hours per resident per day for skilled nursing facilities. xi Quality Staffing Standards vs. IAHCF Facilities 4 3.5 Total Nursing Hours Per Day 3 2.5 2 1.5 1 0.5 3.55 2.75 2.5 2.34 0 HHS "Quality Care" Threshold CMS "Harm Avoidance" Minimum Illinois Minimum Requirement IAHCF SNF Median

According to OSCAR data, the median staffing level at IAHCF skilled nursing facilities is 2.34 nursing hours per day, well below the levels recommended by Federal studies and below the minimum CMS standard necessary to prevent harm to residents. 92% of IAHCF skilled nursing facilities failed to meet the HHS quality standard for staffing. Turnover/Employee Retention Probably about ¾ of our staff has been around less than two years staff here really come and go. It s sad because as soon as the residents get to know and like a CNA, they re usually gone. There s one CNA the residents really love. She gets in trouble, though, for taking time with residents when there are so many other jobs to get done. She gets written up for her activities like cutting residents hair for free. She s looking for another job right now. Bobbie Burke, Quality Assurance Assistant, Albany Care, Evanston Our residents talk about the turnover here all the time. Residents don t like new people. They get comfortable with the old people and come to like them. When someone new comes it takes them a long time to trust them it s like if someone new came into your house. Pat Barron, Activity Aide, Columbus Park, Chicago Low pay and difficult working conditions in IAHCF nursing homes contribute to high turnover of caregivers. As a 2004 report funded by the Robert Wood Johnson foundation states: Turnover among frontline workers is a critical cost driver for the long-term care industry, affecting the fiscal health of providers, the quality of care that long-term care consumers receive, and the efficiency of resource allocation within the public payer system. xii In 2002, the most recent year for which statewide data is available, the annualized turnover rate for certified nurse aides in Illinois nursing homes was 75.5%. xiii This high turnover rate threatens to compromise the continuity of care for nursing home residents and make an already challenging job harder for the caregivers who stay. Sick Pay. Nursing home companies must have infectioncontrol policies that prevent the spread of easily communicable diseases (e.g. cold and flu viruses) among caregivers and nursing home residents. However, IAHCF facilities have not allowed their frontline staff to collect sick pay from the first day on which they fall ill. This has the unintended effect of encouraging caregivers to work when they are ill, increasing the chances of transmission of illnesses. What may be a minor illness to caregivers can become very serious among the elderly residents. The IACHF policy forces workers to choose between losing a much-needed day s pay and preventing the spread of disease among the residents they serve, and could have the net effect of increasing illness among both staff and residents. In addition to disrupting service for nursing home residents, high turnover can carry a significant financial burden as well. The Robert Wood Johnson Foundation report found that the average direct expense of replacing a single frontline caregiver is $2,500, which includes such costs as leaving, hiring, and training. xiv If IAHCF facilities have the state average turnover rate of 75.5%, IAHCF facilities have lost over $15.5 million to the costs of recruitment, lost productivity due to

vacancies, training new staff, etc. Taxpayers bear the brunt of these costs in the form of state reimbursements to nursing homes. As of November 2004, the breakdown of non-managerial, non-licensed, staff experience levels at IAHCF facilities reflected the high turnover rate: Experience Levels at IAHCF Facilities Years of Service # of workers 0 2 3,179 3 4 786 5 9 741 10 14 304 15 19 180 20 29 209 30 and above 43 Source: Employment Data Provided to SEIU Local 4 by IAHCF Facilities Turnover rates can correspond closely with pay and benefits. IACHF facilities pay median wages below the federal poverty line for a family of four. These low wages contribute to higher turnover and result in a less experienced workforce. Furthermore, IACHF workers may qualify for food stamps and other forms of support, shifting the cost of supporting workers from IACHF homes, the employers, to the Illinois taxpayers. Federal Minimum Living Standards Thresholds vs. IAHCF Median Wages $30,000 $25,000 $25,155 $20,000 $19,350 $17,368 $15,000 $10,000 $5,000 $0 Food Stamp Eligibility Federal Poverty Line, Family of Four Median IAHCF Wage of $8.35, annualized

Millions in Profits: IAHCF Facilities Can Afford to do Better Despite the 5.9 percent cut in Medicaid reimbursement rates in 2002, IAHCF owners found many ways to reap profits in 2002 and 2003. In addition to paying themselves collectively millions in salaries, IAHCF nursing homes themselves also earned profits that totaled over $33 million in 2002 and over $12 million in 2003. xv On top of that, these owners created several related companies to provide services to their nursing homes. These transactions with related companies produced additional profits totaling over $36 million in 2002 and $32 million in 2003. Owner Companies Make Profits from Transactions with Nursing Homes IAHCF nursing home operators made money in subtle ways from their facilities. A number of owners set up separate companies to do business with their nursing homes, providing real estate, management, rehabilitation, supplies, and other services for the facilities. These related companies then generate profit for their owners by charging more for services than the cost of those services. In 2003, 77 facilities paid more money to companies with overlapping ownership than the value of the services they received from these companies. xvi Taken together, these payments to related business totaled over $159 million in 2003, resulting in additional profits of $32.7 million. Total IAHCF Nursing Home Revenue Total IAHCF Nursing Home Profits Profits from Related Companies Total Profits 2002 $ 783,300,000 $ 33,100,000 $ 36,200,000 $ 69,300,000 2003 $ 799,100,000 $ 12,100,000 $ 32,700,000 $ 44,800,000 Eric Rothner Nursing home operator/investor Eric Rothner has an ownership interest in 18 facilities within the IAHCF. Taken together, these homes turned a profit of $8.4 million in 2003, the highest for any owner in the agreement. He also drew a salary from his IAHCF facilities of over $1.3 million, paid directly from his facilities or through his two management companies, Preferred Bookkeeping/SIR Management and Care s, Inc. Finally, an array of related companies set up to provide services to his nursing homes earned $1.3 million in profits from their transactions with the facilities. Sidney Glenner Of the five nursing homes operated by Sidney Glenner, four are IAHCF members. These facilities appear to have lost a total of $1.7 million in net income for 2003. However, these facilities transactions with Glenner s related companies reveal a total of $8.67 million in profits for services rendered. Thus, while his nursing homes themselves were unprofitable, Glenner s overall operations earned a total of $6.9 million for 2003.

2003 Profits from Glenner Nursing Homes GlenBar Management Company, Ltd.: Revenue: $3,187,460 Profit: $3,187,460 Salary Payments to Principals: $411,146 5 Glenner-Owned Nursing Homes Related real estate companies providing services to Glennerowned SNFs: Glen Health and Home Management, Ltd.: Revenue: $1,545,425 Revenue: $10,238,146 Profit: $516,793 Profit: $5,034,957 Care Path Health Network: Bernard Hollander, Jack Rajchenbach, et al. Taken together, the twelve IAHCF facilities managed by the Care Path Health Network reported losses of $376,748 for 2003. However, during the same period these twelve facilities made over $25 million in payments to related management and real estate companies, of which $5,335,646 was profit, a margin of over 20%. In addition, over $2.3 million was paid by the Care Path Health Network facilities to several principals, by means of direct salary or management payments from facilities and a variety of management companies operating under the Care Path Health Network umbrella. Finally, the cost reports indicated that, while they were losing money, the nursing homes leased several cars for facility or administrative use, including: 2004 Infiniti 2003 Infiniti 2003 Lexus 2001 Lexus RX30

Poor Choices in the Past; Opportunities for Change in the Future IAHCF facilities should improve their poor resident care through a concerted effort to increase staffing levels and encourage employee retention. These facilities will be receiving significant amounts of new state money in 2005: $32.1 million from the Medicaid reimbursement rate restoration and approximately an additional $9.3 million from the new pass-through for Medical insurance. xvii In a statement released with the passage of the 2005 budget, announcing the release of millions more in Medicaid funds for nursing homes throughout Illinois, Governor Rod Blagojevich stated: It s my hope that the nursing home industry uses these additional dollars to reward those working so hard to care for this state s most vulnerable citizens pay these workers better it will improve the quality of care for Illinois seniors. xviii The owners must provide residents with the care they need and the care Illinois taxpayers and residents pay for. With the new funding comes a new opportunity for IACHF to show its commitment to quality care. To protect residents, IACHF facilities should invest the $41.4 million in new funding to increase staffing and to improve front-line care. New Opportunities for Quality Care: The issues of turnover and job quality have been central to ongoing collective bargaining between SEIU Local 4 and the IAHCF. The union has preferred to address these issues within the framework of a contractual agreement, calling for IACHF to use their new state funds for a greater investment in front-line caregivers. However, as of the time of this writing, the IAHCF has proving unwilling to commit to utilizing the money to address the issues addressed in this report. If these facilities devoted only the $41.4 million in new money available from the state, these nursing homes would be able to: Hire over 2,010 additional nursing staff members to raise the currently critically low staffing levels, which would allow the average IAHCF facility to hire 17 new CNAs. On average, this increase would raise the critically low staffing levels by.638 CNA hours/resident, bringing the median facility in compliance with both the state mandated minimum staffing level and the CMS recommended minimum for harm prevention; or Raise the poverty-level wages currently paid to their front-line nursing staff and other support staff by $2.47 an hour. The State of Illinois must take action to ensure its funding is most effectively spent on the delivery of quality care. To improve care for the residents at IACHF facilities, the state must establish new methods of oversight to hold nursing homes accountable for providing quality care. Nursing homes that fail to invest in front-line caregiving should not be trusted to care for our fragile seniors.

i Online Survey Certification and Reporting (OSCAR) Database, downloaded July 2005. ii Department of Health and Human Services, for Medicare & Medicaid Services. Statement of Deficiencies and Plan of Correction, Alden Princeton Rehab and Health Care. Survey date: 4/2/2004. p. 2 iii Department of Health and Human Services, for Medicare & Medicaid Services. Statement of Deficiencies and Plan of Correction, Washington Heights Nursing Home. Survey Date: 8/21/03. p. 1. iv Department of Health and Human Services, for Medicare & Medicaid Services. Statement of Deficiencies and Plan of Correction, Washington Heights Nursing Home. Survey Date: 9/21/03. p. 3. v Ibid, p. 7. vi Department of Health and Human Services, for Medicare & Medicaid Services. Statement of Deficiencies and Plan of Correction, Glenwood Care. Survey Date: 2/7/03. vii General Accounting Office. Nursing Home Expenditures and Quality. GAO-02-431R, submitted to Congress in 2002. p. 11. viii For a useful summary of this subject, see Catherine Hawes, Ph.D., Nursing Home Quality: Problems, Causes, and Cures, Testimony before U.S. Senate Committee on Finance, 17 July 2003. ix Schnelle et al., Appropriateness of Minimum Staffing Ratios in Nursing Homes, Report to Congress: Phase II Final, Chapter 1. for Medicare and Medicaid Services, December 2001. Illinois staffing data is from the for Medicare and Medicaid Services Online Survey Certification and Reporting System (OSCAR). x Harrington, Charlene. Nursing Home Staffing Standards. Kaiser Commission on Medicaid and the Uninsured, June 2002. xi Title 77 of the Illinois Public Health Code, Chapter 1, Subchapter c, Section 300.1230 (L). xii Dorie Seavey, The Cost of Frontline Turnover in Long-Term Care, Better Jobs Better Care, October 2004, p. 4. xiii 2002 American Health Care Association Survey of Nursing Staff Vacancy and Turnover in Nursing Homes, Feb. 2003. The annualized turnover rate is calculated by measuring staff turnover over a six month period, and extending that analysis mathematically to a 12 month period. xiv Seavey 11. xv All calculations taken from the 2001-2003 Illinois Department of Public Aid Financial and Statistical Reports for Long-Term Care Facilities. xvi Source: IDPA data released through the Freedom of Information Act, December 2004. xvii The list of facilities from which related companies made profit included one home from which $3 was paid out to related companies in excess of services rendered. It was not included in the 76 facilities reported above, which ranged from $20,000 to $2.6 million in payments to related companies above the costs of services rendered. xviii Press Release from Illinois Governor Rod Blagojevich, released on 8/24/2004. Online at http://www.illinois.gov/pressreleases/showpressrelease.cfm?subjectid=3&recnum=3338, accessed on 2/25/05. xix

Methodology Number of Facilities Though the Illinois Association of Health Care Facilities represents 117 business entities employing members of SEIU Local 4, three of those entities were not considered separate nursing facilities by either the OSCAR data or the 2003 Medicaid cost reports because they are parts of larger facilities. These entities are: Alden Des Plains Courts, Alden Des Plains Gardens, and Alden Waterford Courts. Thus, solely for the purposes of the analyses in this report, the IAHCF is considered to represent 114 nursing homes. Resident Care Violations The Inspection and Reporting Process Federal regulations governing resident care conditions are contained in the 1987 Omnibus Budget Reconciliation Act (OBRA), and are found in 42 CFR 483.10 ff. These guidelines are used to assess facilities compliance with basic resident care standards. State inspectors are supposed to visit each facility at least every nine to fifteen months to ensure that facilities are complying with state and federal standards for resident care. A team of inspectors evaluates the facility for approximately one week during each inspection visit. Because a review of the care given to each resident in a facility would be time-consuming, the team observes the care given to a selected number of residents (called sample residents ) who represent the entire facility. When state inspectors enter a facility, either for an annual inspection or to investigate a complaint, they are required to cite all violations of both state and federal regulations. Inspectors note violations of federal regulations on the Statement of Deficiencies and Plan of Correction and include a Tag Number which refers to the specific requirement that the facility failed to meet. The inspectors also provide a written description of the conditions surrounding the violation. The violations are discussed with the managers of the facility who, in turn, must submit a proposed plan of correction to remedy each violation and prevent its recurrence. Once an acceptable plan of correction has been submitted and approved, it is attached to the final report. Facilities that are found to have deficiencies are generally re-inspected within 60 days in order to determine compliance. Inspections data are then submitted to the Online Survey Certification and Reporting (OSCAR) Database, which is maintained by the s for Medicare and Medicaid Services. The analysis in this report was conducted on a February, 2005 download from the OSCAR database. Four of the 114 IAHCF facilities were not found in the OSCAR database: Grasmere Place, Lakeview Living, Lincoln Park West, and Lydia Healthcare. Analysis The percentage of facilities with actual harm or potential to harm violations is calculated by adding together the number of facilities reporting at least one actual harm violation with the number of facilities reporting at least one potential to harm violation, and dividing it by the total number of IAHCF facilities in the OSCAR database (110). The list of violations was compiled from the F-tags listed in the OSCAR database for the IAHCF facilities. F-tags are numbers that correspond to a particular type of violation, such as violations of staffing, hydration, or medicine control standards. The specific examples of resident care violations were obtained from the Illinois Department of Public Health website, which posts information on inspection survey data for each facility in the state. Payer Mix The percentage of nursing home residents for whom their stay in a facility is financed by Medicare, Medicaid, or through private pay channels is the payer mix for that facility. Payer mix data comes from the OSCAR database, and was downloaded in February of 2005. Staffing Staffing data used in this report comes from the OSCAR database, and was downloaded in February of 2005. Hours per resident day is the average of daily work (in hours) given by the entire group of nurses and/or nursing assistants divided by the total number of residents during the two-week period prior to the most recent survey.

The quality care threshold of 3.55 nurse hours/resident day is a conservative one, in that it assumes that residents stay in the facility for a relatively short amount of time. According to the HHS report, the minimum threshold for long term residents is 4.1 nurse hours/resident day. Staffing data was analyzed by taking the median for total nursing staff hours across all IAHCF SNF facilities. The median for these facilities was compared to the federal recommendations and to the statemandated requirements for staffing levels. 21 out of the IAHCF facilities did not report any SNF beds in their Medicaid cost reports for the year 2003, so they were removed from this sample of the OSCAR data. It is noteworthy that the median IAHCF Intermediate Care Facility (ICF) reported total nursing hours of 1.39 hours/resident day, which also fell below the relevant state minimum requirement for staffing of 1.7 nursing hours per day for ICFs. Turnover Costs The estimated costs borne by IAHCF facilities were calculated by multiplying the 75.5% turnover from the 2002 AHCA study (see footnote xiii above) by the 8,000 employees in the SEIU Local 4 bargaining unit, then multiplying the total by the $2,500 costs estimated by the Robert Wood Johnson Foundation report. Employee Retention Employee retention was measured using data released to SEIU Local 4 by the IAHCF facilities through an information request submitted during contract negotiations in 2004. This data set had complete job category data, seniority data, and wage data for 5,442 people out of the 8,000 member workforce. From this sample was calculated the number of years of service for each employee as of 11/30/2004, the date of the compilation of the data received from the facilities. Wage Data Wage figures were for members of SEIU Local 4 that were employed by the IAHCF facilities, based on data released to SEIU Local 4 by the IAHCF facilities through an information request submitted during contract negotiations in 2004. SEIU Local 4 members are non-managerial, non-licensed employees, including CNAs, rehabilitation aides, social service aides, cooks, housekeepers, maintenance workers, and more. Food stamp eligibility is defined as 130% of the federal poverty guideline. The 2005 Federal Poverty Guideline for a family of four was listed as $19,350 for the contiguous 48 states. See http://aspe.hhs.gov/poverty/05poverty.shtml for more information. Definition of Family Family of four is defined as two adults, one of whom is a full-time wage earner, and two children. Annual salary is based on 1,950 hours (37.5 hours per week x 52 weeks). 37.5 hours/week is the standard full time work week in the nursing home industry in Illinois. Related Organizations The Illinois Department of Public Aid s Instructions for Completing 2003 Long-Term Care Facility Cost Reports, defines related organizations as those with five percent or more overlapping ownership and organizations with any ownership interest held by relatives of the owners of the reporting facility. Relatives include spouses, children, parents, brothers and sisters, grandparents, grandchildren, parents-in-law, sisters or brothers-in-law, and sons or daughters-in-law, aunts, uncles and cousins. An organization which has any control over the operating policy of the reporting facility shall also be considered a related organization. (p.23) Financial Analysis Data on profits, owner salaries, related party transactions, and other compensation for owners and administrators came from publicly available cost reports submitted to the state for purposes of calculating Medicaid reimbursements. Facility profits were taken directly from the net income line on the cost reports income statements, found on page 19 of the cost reports. Calculations of related party transactions and profits were performed on self-reported data from the facilities found within the cost reports, which are found on pages 6-6i of the cost reports. Related party profits were calculated by subtracting the cost of the

services provided to nursing homes by the related companies from the amount of money paid out to related companies. Salary data for owners were taken directly from cost reports page 7, in which the salaries, hours, and ownership data are presented for owners or related parties who draw a salary from a nursing home. No financial data was available for the IAHCF facility Lincoln Park West Health Care. New State Money The total amount of new state money available to the IAHCF facilities was calculated to be $41,487,485.11. This figure is the sum of two components: First, the sum of all restored Medicaid reimbursement funds to the 111 IAHCF facilities for which data were available was $32,101,352.70, calculated as per instructions from IDPA staff. Second, the sum of the funds available from the state through the medical insurance pass-through came to $9,386,132.41 for the 106 facilities for which data were available. Standardized to 113 facilities (i.e. using the average payment made across all facilities and inputting that average for the facilities for which data were unavailable) brings the Medicaid restoration total to $32,679,755.45 and the insurance pass-through total to $10,005,971.34. a grand estimated total of $42,685,726.79. However, the calculations performed in this report only took into account the facilities for which data were available; in other words, the sum of the new state money is conservatively taken to be $41,487,485.11for the purposes of this report. No data on Medicaid reimbursement monies was available for the IAHCF facilities Golfview Developmental, Lakeview Living, and Lincoln Park West Health Care. No data on insurance pass-through monies was available for the IAHCF facilities Alden Des Plains Health Care, Alden of Waterford, International Village, Oakwood Terrace, Rennaisance at Midway, Warren Barr Pavilion, and Woodbine Nursing. New Staff Hiring The median remunerative cost of hiring a CNA at an IAHCF facility for one year was calculated to be $20,591.78. This number was calculated by annualizing the median labor cost for IAHCF CNAs ($8.75/hour x 37.5 hours/week x 52 weeks/year x 1.0765 for combined FICA and Social Security expenses, plus health insurance costs of $90/month x 12 months/year and pension costs of $0.18/hour, annualized as for wages). The sum of all new state money ($41,487,485.11) was divided by the cost of hiring one new CNA at the median rate, allowing 2,027 new CNAs to be hired. 37.5 hours/week is considered to be fulltime equivalent by the bargaining agreement between the IAHCF facilities and SEIU Local 4. 2,014 divided by 114 facilities leaves an average of 17.67 new staff per facility. For staffing level increases due to new hiring, the total number of new staffing hours per day (17.67 new staff x 5.7*) was divided by the average daily number of residents in IAHCF facilities (the average number of total resident days across 113 IAHCF facilities for which data were available divided by 365), yielding.638 new staff hours per resident day. * 5.7 hours/day is used instead of 8 because employees work only five out of every seven days. Thus, an FTE employee s work week when considering that work is delivered seven days a week is: (8 x 5 x 52)=2080 hours a year/365 days per year = 5.7 hours per day. Raise Calculations The total amount of new state money available was divided by the total number of hours worked by the employees covered by the bargaining agreement between the IAHCF facilities and SEIU Local 4 for one year. The total number of hours was reached by multiplying the number of employees (8,000) by the number of hours worked by a full time employee in one year (37.5 x 52), and assumes that all employees work full time. The total amount of new money available for labor costs per employee would thus be $2.65/hour; with FICA and Social Security taxes for the employer taken out, the pre-tax hourly raise for employees would be $2.47. Were the assumption that all employees are FTE relaxed, the wage raise possible with the new state monies available would be larger.

IACHF Facilities IAHCF Facilities grouped by management company, with primary management company principal(s) listed: 1 Alden Management Services (Floyd Schlossberg) Alden Alma Nelson Manor Alden Des Plaines Rehab & Health Care Alden Heather Rehab & Health Care Alden Lakeland Rehab & Health Care Alden Lincoln Park Rehab & Health Care Alden Morrow Rehab & Health Care Alden Northmoor Rehab & Health Care Alden of Waterford Alden Orland Park Rehab & Health Care Alden Park Strathmoor Alden Princeton Rehab & Health Care Alden Town Manor Rehab & Health Care Alden Wentworth Rehab & Health Care Boulevard Healthcare Management (Fred Benjamin, Jeff Elowe) Warren Barr Pavilion Care s, Inc. (Eric Rothner) Grasmere Place International Village Pavilion of Forest Park Pinnacle Health Care Of Berwyn Pinnacle Health Care Of La Grange Sheridan Shores Care Somerset Place South Shore Nsg & Rehab Tri-State Nsg & Rehab Washington Heights Nursing Home Careplus Management (Sherwin Ray) nue Care Boulevard Care Glenwood Care Imperial of Hazel Crest Oak Park Healthcare Ctr Park House Ltd. for Residential Management (Ronald Schroeder) Lakeview Living Dynamic Healthcare Management (Marshall Mauer, Maurice Aaron) Bridgeview Health Care Gross Pointe Manor Warren Park Nursing Pavilion Waterfront Terrace Windmill Nursing Pavilion Woodbridge Nursing Pavilion EMI Enteprises (Morris Esformes) Bourbonnais Terrace Burnham Healthcare Emerald Park Health Care Kankakee Terrace Presidential Pavilion Future Associates (Ron Shabat) Peterson Park Health Care Care Path Health Network (Bernard Hollander, Jack Rajchenbach, Robert Hartman) California Gardens Nursing & Rehab Carlton At The Lake Chevy Chase Nursing & Rehab Glenview Terrace Nursing Halsted Terrace Nursing Harmony Nursing And Rehab Jackson Square Nursing Monroe Pavilion Health Renaissance At 87th St, The Renaissance At Hillside Renaissance At Midway Renaissance At South Shore Glen Health and Home Management (Sidney Glenner, Barry Ray) Glen Elston Nursing and Rehab Glen Oaks Nursing and Rehab Glenbridge Nursing and Rehab Glencrest Nursing and Rehab Health Resource/ABH Management (Earl Rosenbaum) Hillcrest Retirement Village Lancaster, Ltd. (Laurence Zung) Dolton Health Care & Rehab Centre Lake Shore Health Care & Rehab Centre Norridge Nursing Centre

Leaf Management (Leo Feigenbaum) Hampton Plaza Nursing & Rehab Plaza Terrace Premier Management (Jacob Graff) Skokie Meadows I Skokie Meadows II MADO Management (Peter O Brian) Margaret Manor North St Martha Manor Managcare, Inc. (Moshe Davis) Mayfield Care Mid America Care Nivram Management (Marvin Mermelstein) Balmoral Home Central Nursing Home Lake Front Health Care Sovereign Health Care Winston Manor Nursing Home Olympia Management (David Meisels) Ambassador Living Continental Care OMI Management (Sheldon Neidich) Westshire Nursing & Rehab Pro Health Care (Stanton Aaron, Ron Shabat) Heritage Nursing Home Lake Cook Terrace Nursing Sheridan Health Care Waterford Nursing & Rehab, The SIR Management (Eric Rothner) Albany Care Bryn Mawr Care Inc. Columbus Park Nursing & Rehab Elmwood Care Greenwood Care Highland Park Health Care Oakwood Terrace Wilson Care Inc. Staycare Management (Jeff Webster, Howard Wengrow) Abbington Rehab & Nursing All American Nursing Home Arbour Health Care Atrium Health Care Hickory Nursing Pavilion No Management Company Listed Owner Facility n/a Northwest Home For The Aged Abe Osina Sherwin Manor Nursing Anthony Miner Golfview Developmental Avigdor Horowitz Woodbine Nursing Charlotte Kohn Birchwood Plaza Charlotte Kohn Lincoln Park West Care Earnest Farkas Wincrest Nursing Corp Eileen Conway Belmont Nursing Home Joseph Liberman Westwood Manor Michael Lerner Regal Health & Rehab Sam Borek Lakeview Nursing & Rehab Samuel Brandman Alshore House Samuel Brandman Lincoln Park Terrace Samuel Brandman Village Nursing Home Susan Simonsen Lydia Healthcare Theresa Russo Mcallister Nursing Home Zohar Hochenbaum Rainbow Beach Nursing 1. Based on data obtained from 2003 cost reports, supplemented by data from the Illinois Department of Public Health s nursing home website, http://www.idph.state.il.us/webapp/ltcapp/ltc.jsp. Not every management company operator has an ownership interest in every nursing home their company manages. Many nursing homes divide ownership among several individuals, often family members.

All IACHF facilities, by facility name Facility Name Address City Congressional District State Senate District State Assembly District Abbington Rehabilitation 31 W Central Roselle 6 28 56 And Nursing Albany Care 901 Maple Evanston 9 9 18 Alden Alma Nelson Manor 550 S Mulford Rockford 16 35 69 Alden Des Plains Courts 1227 Golf Rd Des Plaines 9 29 57 Alden Des Plains Gardens 1227 Golf Rd Des Plaines 9 29 57 Alden Des Plains Rehabilitation And Health Care Alden Heather Rehabilitation And Health Care Alden Lakeland Rehabilitation And Health Care Alden Lincoln Park Rehabilitation And Health Care Alden Morrow Rehabilitation And Health Care Alden Northmoor Rehabilitation And Health Care 1221 Golf Rd Des Plaines 9 29 57 15600 S Honore Harvey 2 15 30 820 W Lawrence 504 W Wellington 5001 S Michigan 5831 N Northwest Hwy Chicago 9 7 13 Chicago 5 6 11 Chicago 1 13 25 Chicago 5 10 20 Alden Of Waterford 2021 Randi Dr Aurora 14 42 83 Alden of Waterford Courts 1991 Randi Dr Aurora 14 42 83 Alden Orland Park Rehabilitation And Health Care 16450 S 97th Orland Park 1 19 37 Alden Park Strathmoor Alden Princeton Rehabilitation And Health Care Alden Town Manor Rehabilitation And Health Care Alden Wentworth Rehabilitation And Health Care All American Nursing Home 5668 Strathmoor Rockford 16 34 67 Dr 255 W 69th St Chicago 1 3 6 6120 W Ogden Cicero 4 12 24 201 W 69th St Chicago 1 3 6 5448 N Broadway Chicago 9 7 13 Alshore House 2840 W Foster Chicago 5 6 11 Ambassador Nursing 4900 N Bernard Chicago 5 6 11 Arbour Health Care 1512 W Fargo Chicago 9 9 18 Atrium Health Care 1425 Estes Chicago 9 9 18 nue Care 4505 S Drexel Chicago 1 13 26

Balmoral Home 2055 W Balmoral Chicago 5 6 11 Belmont Nursing Home 1936 W Belmont Chicago 5 6 11 Birchwood Plaza 1426 W Birchwood Chicago 9 9 18 Boulevard Care 3405 S Michigan Chicago 7 3 5 Bourbonnais Terrace 133 Mohawk Dr Bourbonnais 11 40 79 Bridgeview Health Care 8100 S Harlem Bridgeview 3 11 22 Bryn Mawr Care, Inc. 5547 N Kenmore Chicago 9 7 13 Burnham Healthealth 14500 S Manistee Burnham 2 17 34 Careare California Gardens Nursing 2829 S California Chicago 4 1 2 And Rehabilitation Carlton At The Lake 725 W Montrose Chicago 5 6 11 Central Nursing Home 2450 N Central Centralia 4 2 3 Chevy Chase Nursing And 3400 S Indiana Chicago 7 3 5 Rehabilitation Columbus Park Nursing 901 S Austin Chicago 7 4 8 And Rehabilitation Continental Care 5336 N Wern Chicago 5 6 11 Dolton Health Care And 14325 S Dolton 2 15 30 Rehabilitation Blackstone Elmwood Care 7733 W Grand Elmwood 5 39 77 Park Glen Elston Nursing And 4340 N Keystone Chicago 5 20 40 Rehabilitation Emerald Park Health Care 9125 S Pulaski Rd Evergreen 1 18 36 Park Garden View Nursing And 6450 N Ridge Chicago 9 9 18 Rehabilitation Glen Oaks Nursing And 270 Skokie Northbrook 10 29 58 Rehabilitation Highway Glenbridge Nursing And 8333 W Golf Rd Niles 9 8 15 Rehabilitation Glencrest Nursing & 2451 W Touhy Chicago 9 8 16 Rehabilitation Glenview Terrace Nursing 1511 Greenwood Glenview 10 9 17 Rd Glenwood Care 222 N Hammes Joliet 11 42 84 Golfview Developmental 9555 Golf Rd Des Plaines Grasmere Place 4621 N Sheridan Chicago 9 7 13 Rd Greenwood Care 1406 N Chicago Evanston 9 9 18 Gross Pointe Manor 6601 W Touhy Niles 9 8 15 Halsted Terrace Nursing 10935 S Halsted Chicago 2 14 28 Hampton Plaza Nursing & 9777 Greenwood Niles 9 8 15 Rehabilitation Harmony Nursing And 3919 W Foster Chicago 5 6 11 Rehabilitation Heritage Nursing Home 5888 N Ridge Chicago 9 7 14

Hickory Nursing Pavilion 9246 S Roberts Rd Hickory 3 16 31 Hills Highland Park Health Care 50 Pleasant Highland 10 29 58 Park Hillcrest Retirement 1740 N Circuit Dr Round Lk 8 26 52 Village Beach Imperial Of Hazel Crest 3300 W 175th St Hazel Crest 2 19 38 International Village 4815 S Wern Chicago 3 3 6 Jackson Square Nursing & 5130 W Jackson Chicago 7 4 8 Rehabilitation Blvd Kankakee Terrace 100 Bellaire Bourbonnais 11 40 79 Lake Cook Terrace 263 Skokie Blvd Northbrook 10 29 58 Nursing Lake Front Health Care 7618 N Sheridan Chicago 9 9 18 Lake Shore Health Care & 7200 N Sheridan Chicago 9 9 18 Rehabilitation Rd Lakeview Living 7270 S Shore Dr Chicago Lakeview Nursing & 735 W Diversey Chicago 5 6 12 Rehabilitation Lincoln Park Terrace 2732 N Hampden Chicago 5 6 12 Ct Lincoln Park West 1901 N Lincoln Chicago Park West Lydia Health Care 13901 S Lydia Robbins 1 15 30 Margaret Manor North 940 Cullom Chicago 5 6 11 Mayfield Care 5905 W Chicago 7 4 8 Washington Mcallister Nursing Home 18300 Lavergne Tinley Park 13 19 37 Lane Mid America Care 4920 N Kenmore Chicago 9 7 13 Monroe Pavilion Health/T 1400 W Monroe Chicago 7 5 9 Norridge Nursing 4016 9th St Norridge 5 10 19 Northwest Home For The 438 W N St Chicago 9 8 16 Aged Oak Park Health Care 11210 95th St Oak Park 7 39 78 Oakwood Terrace 1300 Oak Evanston 9 9 18 Park House Ltd. 107 S Lincoln Chicago 7 5 9 Pavilion Of Forest Park 307 E Jefferson Forest Park 7 4 7 Peterson Park Health Care 1016 W Pershing Chicago 5 8 15 Rd Pinnacle Health Care Of 2222 W 14th St Berwyn 3 12 24 Berwyn Pinnacle Health Care Of La 3601 S Harlem La Grange 3 11 22 Grange Park Plaza Terrace 610 Lowry St Midlothian 1 14 28 Presidential Pavilion Po Box 4 Chicago 1 18 36 Rainbow Beach Nursing 605 N Main St Chicago 2 13 25 Regal Health & Rehabilitation 350 W S 1st St Oak Lawn 3 18 36

Renaissance At 87th St 1441 N 14th St Chicago 1 16 32 Renaissance At Hillside, 2940 W 87th St Hillside 4 4 7 plus Supportive Living Facility Renaissance At Midway 4600 Frontage Rd Chicago 4 1 1 Renaissance At South 4437 S Cicero Chicago 2 13 25 Shore Sheridan Health Care Po Box 367 Zion 8 31 61 Sheridan Shores Care 2534 Elim Chicago 9 7 14 Sherwin Manor Nursing 7350 N Sheridan Chicago 9 9 18 Rd Skokie Meadows I 9615 N Knox Skokie 9 9 17 Skokie Meadows II 4600 Golf Rd Skokie 9 9 17 Somerset Place 5009 Sheridan Rd Chicago 9 7 13 South Shore Nursing & 2649 E 75th St Chicago 2 13 25 Rehabilitation Sovereign Health Care 6159 N Kenmore Chicago 9 7 14 St Martha Manor 4621 Racine Chicago 9 7 13 Tri-State Nursing & 2500 W 175th St Lansing 2 15 29 Rehabilitation Village Nursing Home 9000 N Lavergne Skokie 9 8 16 Warren Barr Pavilion 66 W Oak St Chicago 7 3 5 Warren Park Nursing 6700 N Damen Chicago 9 8 16 Pavilion Washington Heights 1010 W 95th St Chicago 1 14 27 Nursing Home Waterford Nursing & 7445 N Sheridan Chicago 9 9 18 Rehabilitation The Rd Waterfront Terrace 7750 S Shore Dr Chicago 2 13 25 Westshire Nursing And 5825 W Cermak Cicero 4 12 24 Rehabilitation Rd Westwood Manor 2444 W Touhy Chicago 9 8 16 Wilson Care Inc. 4544 N Hazel St Chicago 9 7 13 Wincrest Nursing 6326 N Winthrop Chicago 9 7 14 Corp Windmill Nursing Pavilion 16000 S Wabash South 2 15 29 Holland Winston Manor Nursing 2155 W Pierce Chicago 4 2 4 Home Woodbine Nursing 6909 North Oak Park 7 39 78 Woodbridge Nursing Pavilion 2242 N Kedzie Chicago 4 20 39