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