Resources:- I do not have internal reports and Mariner's senior staff have not been particularly forthcoming. Mariner's culture differs from that of the other chains in that it was not the brain child and product of a single person. It was a business venture orchestrated by financiers. It simply adopted the prevailing simplistic views of the marketplace and applied them in a reflex and uninformed manner.
Sociopathy:- I have examined the behaviour and thinking of charismatic market leaders in health and aged care. I have suggested that these people show features, which suggest that some of them are what I have called successful sociopaths. They are very successful and are acclaimed by their peers. Their predictable actions have adverse consequences for others and for society. Typically these adverse outcomes are ignored. They frequently respond by asserting strengths in the areas of claimed or demonstrated deficiency. If you agree that Mariner reflects a similar pattern of predictable and avoidable negative outcomes for patients, for shareholders and for the community then we must attribute this to a culture rather than to individuals. We can still speak of successful sociopathy as a cultural phenomenon. Mariner is a follower rather than a leader. It has adopted a market culture which is sociopathic when applied in a health care context.
The faceless financiers:- Mariner's creators, the financiers Apollo and Lehman brothers, and Leon Black, a junk bond salesman are shadowy financiers and we know little of them. This is a faceless world of money. These men invested in aged care simply because they wanted to make money. The chairman and CEO in Mariner were there to implement the policies of the financiers. Mariner consequently lacked the charisma and dedication which surrounded people like Turner and Elkins
The bulk of nursing home care is paid by Medicaid, a fixed capitation system. Making money involves keeping costs for Medicaid patients down so as not to sustain Medicaid losses. The chains were able to provide additional profit making services to patients who pay privately or through Medicare. The government have now put a stop to this.
The financiers therefore picked out two large companies whose financial success was based on keeping costs down. That they had been repeatedly cited for understaffing and poor care did not matter. To the market this was simply an organisational matter fixed by increasing efficiency. All that was required was a competent manager. A nursing home administrator's reported comments suggest that Mariner indicated to its staff that it was going to fix problems in care and was doing so.
The market and care:- The market has never been able to accept that in there is an obvious inverse relationship between cost savings and profit on the one hand and care on the other. The belief that care is improved by a fully competitive marketplace is never challenged. That market theory is wrong simply does not make sense. If there are problems then it is because market principles are not being followed properly.
Business policies:- Keith B. Pitts came from a hospital corporation OrNda Healthcare, founded by an entrepreneur Charles Martin. Their conduct was highly suspect. They adopted the commercial incentivisation model and applied it to doctors. They were fined US $12 million for paying kickbacks to doctors. OrNda was purchased by Tenet Healthcare. This was a good business fit. National Medical Enterprises (NME) had recently paid a US $379 million fraud settlement for similar practices. It immediately changed its name to Tenet Healthcare.
Pitts' OrNda influence can be seen in a press release dated December 1998 in which its plans for making money and for care are set out. It starts with a number of motherhood statements that make claims to all the right objectives. The ideas for implementing this could equally come from Columbia/HCA, Tenet/NME, or for that matter from Generale de Sante Internationale, a French company, which standardised care in its UK facilities using a dysfunctional factory approach. The strategy is about business and about an industry. It has nothing to do with the individuality of humans or their individual needs. It is about formulas for making money rather than formulas for caring for people.
As in Columbia/HCA and Tenet/NME the emphasis is not on patients needs but on measuring census - getting patients into beds by referral relationships and cross selling. Incentivised referral relationships were the foundation of both Columbia/HCA and Tenet/NME's financial success. They resulted in fraud and the misuse of vulnerable people.
Business model:- Mariner was a calculating money making endeavour. Its culture can be separated from the personality of its senior staff. It simply applied market theory. Success was rewarded and failures terminated. Because it lacked a charismatic leader staff were more likely to become disillusioned and leave. In Mariner we have a rats on a sinking ship phenomenon not apparent among the loyal supporters of the other companies.
To Mariner's financiers the business model was unchallengeable. The problems were in their implementation and with the politicians who passed unfair legislation. The possibility that the thinking behind the market model of care is fundamentally flawed was never considered. Too much money, too much identity and too much personal history is invested in these ideas. Participants have committed their lives to these ideas and are consequently locked in a mental prison from which they are unable to escape.
Leadership:- Mariner was the product of a business model rather than a charismatic entrepreneur with a mission. Its leadership became a game of musical chairs. Pitts appointed in July 1998 was replaced by a committee in June 1999, less than a year later. Three months later Francis W. ''Butch'' Cash was appointed. Less than 6 months later, in March 2000 he was replaced by C. Christian Winkle. How different to Turner from Sun Healthcare and Elkins from IHS. Their staff worshipped them and they could do no wrong. Creditors had to force reluctant companies to replace them.
The Extracts:- The extracts on which
these comments are based are on the page dealing with
Mariner's
market world. I reproduce only a few
of these extracts here.
Mariner Post-Acute Network Announces 1998
Fiscal Year Results
PR Newswire December 29, 1998
"The impact of the Balanced Budget Act of 1997, including the transition to the Prospective Payment System (PPS), combined with lower than expected census, higher than expected operating costs and external pressures from regulators, litigators, elected officials and the media, contributed to a difficult year for our company," commented Keith B. Pitts, Mariner Post-Acute Network's chairman of the board and chief executive officer."While external pressures and PPS will continue to present tremendous challenges to our industry, we have created a company that is prepared to meet those challenges. Today, Mariner has a strong operating platform of skilled nursing facilities with critical mass in strategic population centers, including leadership positions in key markets Houston, Northern California, Milwaukee, Baltimore/D.C., Phoenix, Milwaukee, Orlando and Denver."
"We have also made investments essential to creating a model organization, including: MarinerCare clinical programs, which provide facility staff with uniform guidelines and care maps focused on achieving each patient's optimal health, level of function and quality of life; a Washington D.C.-based independent Office of Ethics and Compliance, manned by registered nurses and headed by a former senior investigator from the United States Senate; a background check program designed to meet and often exceed regulatory requirements, attract the best employees and reduce employee turnover; and, Mariner University, which provides PPS and other key training for clinical and administrative staff. Put simply, we are committed to providing high quality care to our patients, treating our employees with dignity and respect, and enhancing shareholder value," said Pitts.
COMMENT:- The following extract reveals the way these corporations think about patient care. Everything except actual care needed by patients plays a part in determining care. Most patients require individualised care but that is not what they will get. They will get the standardised care, which is most profitable. Results are measured in census not in the care provided. These chains generate profits by adopting a factory approach to individuals and their individuality. This is the "advantage" of size.Incentivising management to focus on the business from a cash flow perspective will inevitably result in staffing and equipment cuts.
Cutting salaries and increasing throughput in therapies produces resentment and also compromises care, unless there was excess in the system, which is unlikely.
The thinking and the emphasis here resembles Tenet/NME and Columbia/HCA.
In addition, the company has identified six key areas of operational focus for 1999, including:
* Census Development. During the year we significantly increased our investment in Network Development, which provides dedicated resources focusing on referral relationships and cross-selling, in key markets.
In addition, we have initiated a set of action steps that includes daily census monitoring and executive management follow-up with targeted facilities. These activities are beginning to produce results, as evidenced by the growth in census since the Mariner merger closing in late July of this year.
* Operations Standardization. Standardizing operating processes and procedures throughout our Company will result in better, more consistent clinical care, improved quality and outcomes, and lower operating costs throughout the organization. Standardization also enables the company to better leverage its purchasing power to decrease the cost of clinical supplies and services, thereby creating margin opportunity.
* Systems Standardization and Enhancement. The company has sufficient critical mass and is making the necessary investment to transform information technology into a strategic advantage. Within the next twelve months we will move from five data centers to two shared service centers, one of several company-wide initiatives which will reduce costs and enhance the quality and timeliness of our operational, clinical and financial reporting capabilities.
* Flattened Organizational Structure. The standardization of our operating and information systems, coupled with the transition to a centralized shared service center model, will enable the Company to eliminate redundant functions, streamline operations and reduce costs. For example, in our contract rehabilitation business, we have reduced therapist salary and benefit costs, decreased divisional overhead, and taken organizational actions designed to increase therapist productivity.
* De-leverage through Cash Management. The Company remains committed to reducing its financial leverage. We have incented all layers of management to focus on the business from a cash flow perspective; this involves improving our working capital management and focusing on enhancing our liquidity position.
COMMENT:- Notice the play on words and the contradictions with the inevitable consequences of the policy above."Each of these initiatives, combined with our strong operating platform, is designed to achieve our objective of becoming the provider of choice in our key markets by delivering high quality, cost effective care to the 60,000 patients we provide care for every day. As we manage through one of the most difficult periods in our industry, the management team and board of directors remain committed to enhancing shareholder value," concluded Pitts.
-----------------------------------
Mariner Post-Acute Network, Inc. is the renamed entity resulting from the July 31, 1998 merger of Paragon Health Network, Inc. and Mariner Health Group, Inc., with Paragon as the renamed surviving entity.
COMMENTS:- These extracts suggest a genuine commitment to doing something about care. Companies, with this sort of commitment are soon overtaken by the pressures of the market. Genesis started out with similar marketplace idealism. We are dealing with idealists but the system, which they have idealised is not universally applicable. To concede this is to concede that their beliefs are limited in scope and relevance.
Wide gulfs exist among facilities here
The Post and Courier (Charleston, SC) April 13, 1999
Third in a series
But since the Mariner merger, the company has installed new administrators and directors of nursing at each of its three tri-county facilities, in part because it recognized there were problems, Cyrlin (a new manager in a Mariner facility) said."This facility has undergone an incredible metamorphosis," Cyrlin said. "I'm not one for big corporations. But we're really happy under the new management."
For one, Mariner leaves more decision-making in the hands of each facility's administrator. Cyrlin was allowed to raise employee pay. And the company has invested more than $ 100,000 renovating the 18-year-old building.
Mariner also operates an Office of Ethics and Compliance in Washington, D.C., manned by registered nurses and headed by a former senior U.S. Senate investigator. The goal: Provide an independent review of concerns raised by people calling a hotline.
Mariner also performs criminal background checks on all employees, which isn't required in South Carolina.
Spell called the checks the "most comprehensive in the industry," searching criminal records and checking licenses and certification for health care workers.
It also runs Mariner University, which trains workers on issues such as the company's values and a new Medicare payment system.
"Our nurses and caregivers are professionals who work with families to ensure our residents receive quality care," Spell said. "The needs of our residents and concerns of family members take top priority."
