Seniors Housing Update - North American Health Care Files For Bankruptcy Protection

February 18, 2015

February 18, 2015. The California-based company is seeking protection from many lawsuits filed against it...

North American Health Care Files For Bankruptcy Protection

In case anyone hasn’t seen the news today, North American Senior Care has filed for bankruptcy protection. The company operates more than 30 skilled nursing facilities in California and other western states. What makes this case interesting is that the company was profiled in a New York Times front page article last summer as the poster boy of gaming the 5-star rating system for skilled nursing facilities, and for not providing the best of care. If anyone doesn’t think that this article, by NYT reporter Katie Thomas, has resulted in more lawsuits and other problems for the company, which is the reason claimed for the bankruptcy filing, well, come out from under your rock. However, according to the law firm of Frost Brown Todd, health care company bankruptcy filings in general are on the rise, while non-healthcare company filings are on the decline.

The reason why I am speaking to you is because this is just round one for reporter Katie Thomas. After her story came out about North American Health Care, she started on a new path, and one that could have much worse ramifications for skilled nursing operators. It seems she got it in her head that skilled nursing facilities just may not be the right venue for high acuity subacute care, or at least some of the providers may not be qualified to provide such care. How do I know this? Because I spent nearly an hour on the phone with her several months ago trying to explain the rationale for a lower-cost setting for higher acuity care, how it helps the health care system in general, and why it is necessary. Deaf ears? Who knows? Now, we all know that there are good hospitals and not so good, great doctors and not so good ones, and good skilled nursing providers and not so good. But my fear is that she will try to paint the industry with a broad brush if she can find one company to be her poster boy of a provider that shouldn’t be doing high acuity subacute care. That she hasn’t come out with the story yet may be a good sign, but don’t underestimate the sharks at the Times when they decide to go after something.

Now, I realize you could call me a hypocrite, since I have “gone after” certain companies, like Sunwest Management, Assisted Living Concepts and the accounting games at Sunrise Senior Living 10 years ago. But I believe these examples were very different, as my goal was to make people understand what was really happening at those companies, especially from a value perspective, and how it would impact the overall senior care market, which I love. I can’t say the same thing for Katie Thomas, as my guess is she will move on to another beat in a year or two after she has made a name for herself in the skilled nursing sector, and not spend almost 30 years covering it like some of us have.    


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