Opposition has grown to the idea of a ban on for-profit nursing homes in New York state — but not enough to prevent the idea from becoming law.

The state Assembly approved A.5842 by an 83-64 vote earlier this week, with both Assemblymen Andrew Goodell, R-Jamestown, and Joe Giglio, R-Gowanda, voting no. A similar measure was approved in 2021 by the Assembly with 91 votes in favor — meaning greater opposition this year than last year. The Senate didn’t take the Assembly bill up for a vote before the end of the 2021 legislative session. It’s unknown if the Senate will debate the measure before the end of this year’s session.

A.5842 adds a new section of the state Public Health Law to prohibit all future establishment or expansion of bed capacity of a nursing home owned or operated, in whole or part, by a for-profit entity. Current facilities, and those with applications pending if the bill becomes law, can proceed. Modifications in the ownership of a previously-approved for-profit nursing home, such as adding or subtracting a shareholder, would be permitted.

Assemblyman Richard Gottfried, D-New York City and chair of the Assembly Health Committee, sponsored the legislation and said in recent years, for-profit nursing homes in New York have grown from about one-third of the nursing home market to two-thirds. Gottfried pointed to national data he said showed for-profit nursing homes score worse on staffing, infection control and other quality indicators, have higher rates of patient deaths and cost more. He also cited a 2021 report by Attorney General Letitia James showing real estate and service contract transactions divert money from patient care and had a hand in increasing COVID-19 risks to patients.

“At least in the case of nursing homes, government regulations have a limited record of success,” Gottfried said. “Family monitoring has a very limited record of success. You can’t rely on nursing home residents to say ‘Gee, I’ve been here a week and don’t particularly care for it. I’m going to go to the nursing home across the street.’ It doesn’t work that way. All of the mechanisms we rely on that are usually successfully, to be able to rely on the private sector really don’t work very well in the area of nursing homes. And that is why we need this bill.”

Among the Republicans to speak in opposition to the legislation was Goodell, who said his experience as Chautauqua County executive in the 1990s showed the for-profit nursing homes in the county forced the Chautauqua County Home to improve if it was to compete for private pay patients. Competing for private pay patients was the only way for the nursing home to operate near a break-even level because Medicaid and Medicare reimbursements weren’t enough to operate the facility without a county subsidy. Eventually, after years of mounting deficits and county subsidies, the Chautauqua County Home was sold after two years of discussions to VestraCare. VestraCare first showed interest in buying the facility from the county in August 2013. Although its first offer to purchase the County Home was voted down by the County Legislature in October 2013, its second offer of $16 million was approved by the legislature in February 2014.

VestraCare later joined into a joint venture partnership with the McGuire Group, operator of seven health care facilities in New York and Michigan.

“So, when we say something is wrong with operating in a fiscally responsible manner, there’s something wrong with operating at a profit, we ignore the fact that the profit motive in the United States drives lower cost and higher quality,” Goodell said. “That’s why you and I are driving high quality cars, that’s why we have cell phones, that’s why we compete all the time on price and quality. … Every private pay patient whose presence in a nursing home is essential for that nursing home’s very survival, those private pay patients go to the nursing homes that give them the best quality at the best price. That is exactly how they compete, by advertising they have the best quality at the best price. We should not turn our back on hundreds of years of proven experience and eliminate the profit motive without regard to the price and quality those facilities have provided.”