When Seniors Are the Product

The unfolding story of how a wealthy buyout firm takes advantage of vulnerable old people and low-wage employees to make money and enrich its top executives.

To set the stage, think about yourself getting old, or about your parents or grandparents.  Think about reaching a point where you just can't quite get by living on your own at home anymore.  So at some point you decide you have to move into a senior facility.  What about if you need assisted-living facilities -- a place with people to help you take a shower and things like that.  And finally, think about when you might need "memory care." (This is a the name for a special facility for people with Alzheimer's disease.)

These are people who are in no condition to fight battles.  Vulnerable is the word here.  Extremely vulnerable. You would think people in this phase of their live are people who our society would give special care, special attention, special protections.  You would think that our society would join together to take care of them, protect them, shelter them, fight for them.

But not in today's America.  You see, there is one more fact about these people: the people who move into a senior facility do so because they can afford to.  These places are not cheap.  In today's America the people without money are on their own without care, but if you have some money you have at least some value -- to a certain kind of company.

OK, we have the perfect combination here.  We have elderly, frail, sick, vulnerable, and they have some money.  They are a captive audience, too, because people in this situation are not people who can pack up and move somewhere else.  Senior care is a big business.  You're talking about chains with hundreds of facilities each with dozens or even hundreds of living units you're talking REAL money.  So in today's economy you're talking about a perfect target for exploitation. This week I am going to explore what it means to be vulnerable.  But I think you can already guess where this is going.

Atria Senior Living.

Atria Senior Living is an "assisted living, independent living and memory care services" senior-living provider.  They run a large chain with more than 130 facilities to house seniors around the country.  Their website says, "We help seniors make the most of their retirement years."

Lazard.

Atria was set up by Lazard LLC., a "financial advisory and asset management firm." Lazard is a private equity, or "buyout" firm.  Yep, one of those big Wall Street outfits that you are reading more and more about.  Lazard is supposedly based in Bermuda even though it lists [pdf] its "principal offices" as New York, London, Paris and Milan.  (Its website doesn't even list Bermuda on its "global presence"map.  Wink, wink, nod, nod.)  On their website they say that a core value is Citizenship,

"We are deeply aware of the importance of our conduct to our employees, business partners, clients, regulators, investors and the public at large. Above all, we must earn and maintain their trust in all our daily endeavors."
Are they talking about Bermuda citizenship?  It doesn't say anything about the importance of their conduct to extremely vulnerable old and sick people who have money, does it?

Lazard set up, and an "affiliated entity*" owns, much of Atria.  Atria houses seniors, and collects a monthly fee, which ends up in Lazard's (affiliated) bottom line.  Like I said, you can probably guess where this is going.  (*A real estate fund called "Lazard-Freres Strategic Realty Investors Fund II," which is controlled by "Lazard Alternative Investments" -- a "Lazard-affiliated entity" -- lists Atria Senior Living as its largest asset.  OK, some of these are holding companies, some are limited liability companies, some have "business alliance agreements," etc.  It's complicated -- on purpose.)

Here is what is going on:  Atria has been reducing services, raising rates, cutting wages, and generally treating the residents and employees like money trees that exist to be squeezed...  At Boztopia Martin has been writing about Atria and Lazard,

"In my situation I have had such a hard time getting Atria to do what my 88-year-old mother needs," she claimed. "The facility management is unresponsive and too often it seems they are interested in only making money. The facilities are too short-staffed. Many of these residents suffer from disorientation and dementia."

Imagine finding out that your elderly parents were being mistreated or neglected in places like these, and that their caregivers and workers were being paid crap wages and forced to work a three-person workload. You'd think that a heavyweight investment fund like Lazard would pay more attention when their customers were demanding better treatment, right?

Martin, I think you have it wrong here.  Who is Lazard's customer, in this situation? According to the front page of Lazard's website Lazard "provides advice on mergers and acquisitions, restructuring and capital raising, as well as asset management services, to corporations, partnerships, institutions, governments and individuals." Lazard's customer is people and companies with a ton of money.  They hand the money to Lazard and expect a good return.

The seniors under Atria's care are Lazard's product, not their customer! In today's America the vulnerable, elderly, sick and captive are a product to be exploited.

I'll be writing about this for the next week or two.

Oh yeah, there's a really, really rich guy at the top of the food chain, making himself a ton of loot off of the situation.  But you knew that was coming, didn't you?

-- Dave Johnson

This post was sponsored in part by The Campaign To Improve Assisted Living.

Tags: Alzheimer's, assisted living, Atria, Lazard (all tags)

Comments

9 Comments

Sounds familiar

I remember being introduced to this concept a few decades back with respect to television, radio, newspapers, etc.  In each of those cases, the advertisers were/are the true customer, and the watchers/listeners/readers are the product.

Sometimes I wonder if it's going to take CEOs dangling from lampposts to change just who this country is run on behalf of.

by RT 2008-07-07 11:26AM | 0 recs
An example of why we need

regulation AND enforcement.   You need both for a market economy to work fairly and humanely.

by activatedbybush 2008-07-07 12:19PM | 0 recs
And sadly, much as I detest trial lawyers

and the overall glut of them that enables our hyper-litigious society, there is a role to be played here for the courts as an avenue for the little guy to seek redress from the greedy corporation (albeit unfortunately with greedy trial lawyers paying for their mansions in Bel Air).

by activatedbybush 2008-07-07 12:20PM | 0 recs
Re: And sadly, much as I detest trial lawyers

I suggest you read my Commonweal Institute report "The Attack on Trial Lawyers and Tort Law."  You will understand how this anti-lawyer stuff is really part of a larger conservative movement effort.  Access to the courts is a fundamental right of democracy and the big corporations are trying to undermine that right.

It is online as a PDF or as HTML pages.

by davej 2008-07-07 08:09PM | 0 recs
If the government did its job and

properly regulated industry, and if non-direct damages were sensibly capped, then I think we would have far less of a need for trial lawyers.  We pump out way too many confused liberal arts grads who go to law school by default and then get sucked into the legal complex that is a beast which needs to be fed.   No other society comes close to the US in terms of its propensity to be litigious.  It leads to a breakdown of trust as well as un-neccessary cost.   But I will look at your link.

by activatedbybush 2008-07-08 04:39AM | 0 recs
Re: When Seniors Are the Product

A few years back, the university I worked at had this big employee training binge in which we were taught that "students are our product" for our customers -- business and corporate employers.

I like how the people who are paying you money (whether old people or students) are not your customers -- it's a deliberate dehumanization that makes exploitation "easier".

by prodigal 2008-07-07 12:23PM | 0 recs
Re: When Seniors Are the Product

Why is any of this a surprise?  This country was founded on two things:  Business independance and Representation of said business' in the running of the Govt. that controls the environment that the business exists in.

We have many other honorable and aspiring traditions, but those above are the FOUNDATION of our country.  IN essesence the greedy monopolist who has "bought off" the regulators and politicians is the ultimate American.

by Hammer1001 2008-07-07 04:28PM | 0 recs
Re: When Seniors Are the Product

That's not in the Constitution that I read.

by davej 2008-07-07 08:10PM | 0 recs
The Price of Freedom is Eternal Vigilance...

I'm a daily visitor to a nursing facility where a loved one has resided for four years.  The facility has changed ownership three times in that period, now owned by an arm of GE, I believe, though this is not something the administration publishes widely.  The care is good, in general, though residents pay dearly for their care.  It is obvious that costs are being trimmed here and there to pay a return to investors.  Many staff at all levels are dedicated; there are always some who are obviously just there for a paycheck.  The work is not easy- it is physical and often stressful.  Just like caring for young children in your home, there is always more that could be done for each resident, except when they are sleeping.

The best protection for this vulnerable population is the presence and interest of family. The problem is that many residents do not have this potent resource.  Many have outlived spouse, siblings, etc. or never had them.

I will be most interested in your forthcoming diaries.  Please tell it like it is.

by susie 2008-07-07 09:54PM | 0 recs

Diaries

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