>> COMING UP NEXT ON "HEADLINE HUMBOLDT", ANOTHER INSTALLMENT OF OUR SPECIAL SERIES WHAT'S WRONG WITH HUMBOLDT AND HOW TO FIX IT.

REPORTER LINDA STANSBERRY JOINS US LIVE TO TALK ABOUT SKILLED NURSING FACILITY AND THE CRISIS OF CARE IN HUMBOLDT COUNTY.

ALSO "HEADLINE HUMBOLDT"'S ERIC BLACK REPORTS ON IMPROVING CONFLICT BETWEEN CAL POLY HUMBOLDT AND ARCATA FIRE DEPARTMENT WHO HAS EXPRESSED CONCERNS ABOUT PROTECTING A FUTURE OFFCAMPUS APARTMENT COMPLEX.

FROM THE TOP OF HUMBOLDT HILL, I'M JAMES PAULY, THANKS FOR JOINING US.

ONE OF THE PRIVILEGES OF THIS JOB FOR ME IS WORKING WITH A FANTASTIC GROUP OF FREELANCE JOURNALISTS WHO THRIVE IN MAKING A POSITIVE DIFFERENCE IN OUR COMMUNITY.

TWO SUCH REPORTERS DON'T SETTLE FOR THE EASY STORIES OR REMAIN CONTENT OF REPORTS THE MINUTES OF THIS OR THAT LEGISLATIVE BODY.

THEY DIVE DEEP INTO SYSTEMIC ISSUES FACING OUR COMMUNITY AND THE INSIGHT AND OUTRACE NECESSARY FOR CHANGE.

NEXT WEEK RYAN HUDSON WILL BE HERE ABOUT THE HOMELESS PRESENCE IN AND AROUND EUREKA SLEW, SHE HAS HIKED THROUGH TO VISIT THE PEOPLE WHO ARE THERE.

WE ARE THRILLED TO HOST LINDA STANSBERRY WHO IS HERE TO HELP PRODUCE AN ONGOING PODCAST, WHAT'S WRONG WITH HUMBOLDT AND HOW THE FIX IT.

SKILLED NURSING FACILITIES ARE OFTEN SUB STANDARD AND PUT OUR SENIORS AT RISK.

STANSBERRY HAS BEEN FOLLOWING THE STORY FOR YEARS, RESEARCHING CONDITION, OWNERSHIP AND FINANCES ULTIMATELY REVEALING A BROKEN SYSTEM THAT DAN ANDS HE FORM.

THANKS FOR JOINING US, LINDA.

>> THANK YOU FOR HAVING ME.

>> WHAT IS THE CRISIS AT SKILLED NURSING FACILITIES >> WHERE SHOULD WE START IN I THINK WE SHOULD START WHERE THE AMOUNT OF SKILLED NURSING BEDS ARE OWNED BY ONE COMPANY IN HUMBOLDT COUNTY THAT HAS A MONOPOLY AND THEY HAVE COMPLETE CONTROL OVER THOSE FACILITIES.

THE CURRENT STANDARD OF CARE IS NOT GREAT.

RECENTLY INVESTIGATORS WITH THE DEPARTMENT OF PUBLIC HEALTH WENT IN AND FOUND A LOT OF PEOPLE SUFFERING FROM CONDITIONS CREATED BY UNDERSTAFFING.

THIS HAS BEEN A CONSISTENT PROBLEM FOR AT LEAST 20 YEARS, UNFORTUNATELY, UNDERSTAFFING IN THESE FACILITIES.

>> WHAT IS THE COMPANY SO THAT PEOPLE CAN GET AN IDEA WHO WE ARE TALKING ABOUT?

>> SURE.

THAT IS A COMPLICATED QUESTION.

>> OKAY.

>> SO THE COMPANY IS BREEZE HEALTH CARE, HOWEVER, THEY HAVE A NETWORK OF SMALLER COMPANIES AND LLCs THAT EVENTUALLY TRICKLE DOWN TO THE OWNERSHIP OF THESE FACILITIES.

>> KIND OF LIKE THE RUSSIAN NESTING DOLL, IT HAPPENS NOW WITH CORPORATIONS.

ONE INTO ANOTHER?

>> YES.

THIS IS DELIBERATE.

IT IS AN ATTEMPT TO SHIELD THE COMPANY FROM LIABILITY BY HAVING THIS SERIES OF LLCs AND MANAGEMENT COMPANIES.

>> OKAY.

NOW, IS IT PARTICULARLY BAD IN HUMBOLDT COUNTY OR IS HUMBOLDT COUNTY ANOTHER SITE WHERE THIS IS OCCURRING?

THE FACT THERE IS CLOSE TO A MONOPOLY HERE OBVIOUSLY CREATES PRESSURE, BUT IS IT WORSE HERE THAN OTHER PLACES >> I COULDN'T SPEAK TO WHAT IS HAPPENING STATEWIDE EXCEPT I KNOW FROM TALKING TO FOLKS WHO ARE DOING WORK STATEWIDE THERE ARE SYSTEMIC ISSUES, THERE ARE PROBLEMS WITH SUB STANDARD CARE ACROSS THE STATE.

IN PARTICULAR CONNECTED TO THIS COMPANY.

THAF -- THEY HAVE ONE OF THE WORST REPUTATIONS OF PATIENT CARE.

THEY HAVE A HISTORY OF FACILITIES BEING SHUT DOWN.

IN ONE CASE A FACILITY IN FRESNO WAS SHUT DOWN AND THEY BASICALLY BUSSED ALL OF THEIR PATIENTS IN THERE OVERNIGHT, THIS IS WHAT I HEARD FROM A PATIENT, TO HUMBOLDT COUNTY.

SO HUNDREDS OF MILES AWAY FROM WHERE THEY WERE.

>> WOW.

>> RIGHT?

AGAIN, BECAUSE WE HAVE A MONOPOLY OF THESE SKILLED NURSING FACILITIES IN HUMBOLDT COUNTY, WHAT WE ARE SEEING IS THEY OCCASIONALLY LEVERAGE THAT MONOPOLY TO THREATEN TO SHUT DOWN FACILITIES UNLESS THEY HAVE A HIGHER RATE OF REIMBURSEMENT FROM THE STATE.

>> WOW.

>> IN MANY CASES PEOPLE HAVE HAD TO LEAVE HUMBOLDT COUNTY TO RECEIVE THE CARE THEY NEED, SO, AGAIN, HUNDREDS OF MILES AWAY FROM THEIR FRIENDS OR FAMILY AND SYSTEM OF SCARE.

>> YEAH.

THAT IS TRAGIC.

HOW DID YOU FIRST GET ON TO THE STORY?

DID SOMEONE CALL YOU UP AND SAY THERE ARE PEOPLE SUFFERING AT THE CARE HOMES?

HOW DID YOU FIND OUT ABOUT IT?

>> YES.

LITERALLY THAT.

I GOT A TIP-IN 2015 THAT THE LOCAL SKILLED NURSING FACILITIES WEREN'T ACCEPTING PATIENTS.

IT WAS A LEARNING CURVE.

FIRST LEARNING WHAT SKILLED NURSING FACILITIES ARE.

THESE ARE FACILITIES THAT DIFFER FROM RESIDENTIAL CARE FACILITIES WHAT WE CALL OLD FOLKS HOME BECAUSE THEY ARE SUPPOSED TO PROVIDE A HIGHER STANDARD OF CARE FOR FOLKS WHO HAVE HIGHER NEEDS.

BEING TURNED, CATHETERIZATION, ESSENTIALLY, THEY NEED NURSING CARE.

>> MM-HMM.

>> SO AT THAT TIME WHAT HAD HAPPENED IS THESE FACILITIES STOPPED ACCEPTING PATIENTS SAYING THEY COULD NOT ADEQUATELY STAFF THEIR FACILITIES SO THEY COULDN'T ACCEPT ANY MORE PATIENTS.

WHAT WE CAME TO UNDERSTAND FROM THIS IS THEY WERE TELLING THE HMO THAT WAS GIVING THEM MONEY FROM MEDICAL THEY NEEDED MORE MONEY FROM THEM BEFORE THEY WOULD ACCEPT MORE PATIENTS.

>> WOW.

YOU KNOW, WHO WOULD YOU SAY IS RESPONSIBLE FOR ALL OF THIS?

IS THISSING IS -- IS THIS SOMETHING ON THE COMPANY ALONE OR MORE OF A SYSTEMIC FAILURE?

>> I WOULD SAY IT IS A SYSTEMIC FAILURE.

SOME PEOPLE MIGHT SAY IT IS A FAILURE OF FOR-PROFIT HEALTH CARE.

THE OWNERS OF THESE COMPANIES AREN'T DOING IT BECAUSE THEY ARE, YOU KNOW, REALLY INVESTED IN THE HEALTH AND WELL BEING OF PEOPLE WHO NEED MEDICAL CARE, FROM MY OPINION.

THEY ARE DOING IT BECAUSE THERE IS A PROFIT IN IT.

>> YEAH.

THAT IS NO SECRET.

THAT IS HOW THE PROFIT SYSTEM WORKS.

IN A "HEADLINE HUMBOLDT" EXCLUSIVE, LINDA SAT DOWN WITH TONY CHICOTEL, CALIFORNIA FOR NURSING HOME REFORM.

CAN YOU SET THIS UP?

>> SURE.

TONY CHICOTEL AND I HAVE SPENT A LOT OF TIME OVER THE PHONE SINCE HOW LONG HAS IT BEEN, EIGHT YEARS SINCE I BROKE THE FIRST STORY.

HE IS FROM THE CALIFORNIA ADVOCATES FOR NURSING HOME REFORM.

HE IS PUSHING FOR SYSTEMIC REFORM.

>> ALL NURSING HOMES ARE VERY MOTIVATED TO TREAT AND HOUSE SHORT-TERM REHABILITATION RESIDENTS WHO HAVE MEDICARE COVERAGE COMING FROM A HOSPITAL BECAUSE THE MONEY IS VERY GOOD.

IT IS VERY LUCRATIVE TO TAKE CARE OF THOSE KINDS OF RESIDENTS.

THE PROBLEM IS THE MEDICARE BENEFIT IS VERY SHORT LIVED.

IT IS ONLY UP TO 100 DAYS AND IN MOST CASES MEDICARE WANTS TO TERMINATE THE COVERAGE SOMETIME BETWEEN TWO TO FOUR WEEKS AFTER THE RESIDENT HAS BEEN PLACED THERE.

IT IS VERY SHORT LIVED AND VERY LUCRATIVE.

A LOT OF FACILITIES AND CHAINS TRY TO MAXIMIZE THE NUMBER OF RESIDENTS COMING IN FROM HOSPITALS, GIVE THEM TWO TO FOUR WEEKS OF THERAPY AND MOVE THEM OUT AND REPLACE THEM WITH A FRESH BATCH OF PATIENTS FROM THE HOSPITAL.

I HAVE SEEN ALL NURSING HOMES DO THAT.

OTHER PLACES AROUND THE STATE HAVE A SLIGHTLY DIFFERENT MODEL.

MORE TOLERANCE OF LONGER TERM RESIDENTS WHOSE CARE IS NOT PAID FOR BY MEDICARE, BUT MEDICAL, WHO PAYS FOR PEOPLE WHO CAN'T AFFORD IT.

THERE IS NO TIME LIMIT.

YOU CAN BE ON MEDICAL AND LIVE IN A NURSING HOME FOR 20, 30 YEARS IN SOME CASES.

THE MONEY IS NOT AS GOOD AS WITH THE MEDICARE BENEFIT.

I THINK WHERE THE BUSINESS MODEL PROSPERS IS THAT YOU HAVE VERY LOW STAFFING IN THESE FACILITIES.

YOU ARE NOT GETTING AS MUCH MONEY, BUT YOU CUT STAFFING DOWN TO THE BONE AND YOU ARE ABLE TO SECURE A PRETTY HEALTHY PROFIT.

ANOTHER THING THAT CHARACTERIZES THIS NURSING HOME CHAIN AND OTHER NURSING HOME CHAINS IN CALIFORNIA IS USE OF RELATED PARTY ENTITIES.

THIS IS WHERE A COMPANY SETS UP OTHER COMPANIES TO PROVIDE SERVICES TO THE FACILITY.

SO TO SERVE AS VENDORS FOR THE NURSING HOME.

THEY ARE ALL OWNED BY THE SAME GROUP OR ORGANIZATION OR PERSON AND THE RELATED PARTY ENTITY CAN INFLATE THEIR COSTS FOR THEIR SERVICES TO THE FACILITY AND IT LOOKS LIKE A LEGITIMATE COST IN THE ACCOUNTING BOOKS, BUT IT IS ACTUALLY AN INFLATED RATE THAT TURNS PROFIT OVER TO THE OWNER OF ALL OF THESE COMPANIES.

MOST OF THE CARE THAT IS PROVIDED IN NURSING HOMES IS PAID FOR BY GOVERNMENT FUNDING AND IT'S INSUFFICIENT TO GET US GOOD CARE.

NOW, I THINK THAT FOR THE MOST PART THE MONEY IS SATISFACTORY, IT IS JUST SO MUCH OF IT IS FUNNELED AWAY FROM THE CARE AND INTO THE POCKETS OF THE OWNERS AND THE MANAGERS OF THE FACILITIES.

SO GETTING MORE BANG FOR OUR BUCK IS CERTAINLY ONE PROBLEM.

I THINK THE SECOND REAL SIGNIFICANT SYSTEMIC PROBLEM IS ENFORCEMENT.

WE HAVE A LOT OF GOOD RULES, A LOT OF GOOD LAWS, A LOT OF GOOD REGULATIONS TO PROTECT RESIDENTS OF LONG-TERM CARE FACILITIES AND TO ENSURE, SUPPOSED TO ENSURE THAT THEY GET GOOD QUALITY CARE, BUT THE ENFORCEMENT IS VERY WEAK.

AND BECAUSE THE ENFORCEMENT IS SO WEAK, THE PROVIDERS DON'T HAVE A LOT OF DISINCENTIVES FOR VIOLATING THOSE RULES.

SO WE SEE CONSTANT RULES VIOLATIONS THAT OFTENTIMES LEAD TO HARM AND IN SOME CASES DEATH OF RESIDENTS.

THEY CONTINUE TO HAPPEN BECAUSE THE ENFORCEMENT IS SO WEAK AND THE CONSEQUENCES FOR VIOLATIONS ARE SO MINIMAL.

THE BIG VIOLATION THAT WE SEE OVER AND OVER AGAIN THAT LEADS TO SO MANY PROBLEMS WITH QUALITY OF CARE AND WITH RESPECT FOR RESIDENT RIGHTS AND DIGNITY IS UNDERSTAFFING.

BOTH IN ASSISTED LIVING FACILITIES AND NURSING HOMES THERE ARE RULES RELATED TO HAVING ENOUGH STAFF TO MEET THE NEEDS OF THE RESIDENTS IN THE FACILITIES.

IN NURSING HOMES IN CALIFORNIA THERE ARE A NUMBER OF STAFF PEOPLE YOU NEED TO HAVE TO PROVIDE A CERTAIN NUMBER OF HOURS OF CARE PER RESIDENT PER DAY.

THOSE ARE CONSTANTLY VIOLATED.

I THINK IT IS JUST SORT OF AT THIS POINT BACKGROUND NOISE FOR REGULATORS TO HEAR THAT FACILITIES ARE UNDERSTAFFED.

I THINK THE LONG-TERM CARE INDUSTRY IS DOING A PRETTY GOOD JOB OF CONTROLLING THE NARRATIVE, ARGUING THAT IT IS A LABOR CRISIS.

THERE'S JUST NOT ENOUGH STAFF TO DO THE JOBS THEY WANT TO PAY PEOPLE TO DO.

BUT THIS HAS BEEN A PROBLEM FOR, YOU KNOW, MANY, MANY DECADES, NOT JUST THE LAST COUPLE OF YEARS OR SINCE COVID.

THE WORK CONDITIONS ARE SO TERRIBLE BECAUSE IN SO MANY FACILITIES THE CULTURE IS TERRIBLE AND THE LEADERSHIP IS TERRIBLE, BUT ALSO THEY PAY SO LITTLE.

AS I SAID BEFORE, SO MUCH OF THE MONEY IS BEING DIVERTED INTO PROFIT AND AWAY FROM CARE.

SO WAGES ARE KEPT VERY DEPRESSED AND NO ONE WANTS TO WORK IN THESE FACILITIES.

THE LABOR SHORTAGE IS OF THE INDUSTRY'S OWN DOING.

ANY LONG-TERM CARE FACILITY WHERE YOU HAVE A CERTAIN NUMBER OF RESIDENTS, LET'S SAY MORE THAN FIVE, AND YOU'VE GOT JUST ONE WORKER PROVIDING THE CARE, THERE ARE TIMES IT IS JUST IMPOSSIBLE TO GIVE THEM ALL THE CARE THEY NEED BECAUSE SOME RESIDENTS NEED TOTAL ASSISTANCE WITH CERTAIN ACTIVITIES.

AND IF THERE'S A SECOND RESIDENT WHO NEEDS CARE AT THAT PARTICULAR TIME, THEY ARE NOT GOING TO GET IT.

EITHER THEY ARE GOING HAVE TO WAIT OR NEVER GET IT AT ALL.

WHEN WE ARE NOT PROVIDING THESE VERY BASIC -- FOR THESE VERY BASIC NEEDS LIKE NUTRITION AND TOILETING AND POSITION CHANGES TO GET PRESSURE OFF OF CERTAIN PARTS OF THE BODY AND OFF OF THE SKIN DOESN'T GET DONE, REALLY BAD THINGS RESULT.

PEOPLE FALL.

THEY HAVE AN INCONTINENCE ISSUE THAT LEADS TO URINARY TRACT INFECTION OR OTHER INFECTIOUS DISEASE.

THEY LOSE WEIGHT.

THEY GET PRESSURE SORES.

IT CAN BE PRETTY AWFUL PRETTY FAST.

SO HAVING ENOUGH STAFF TO MEET THE NEEDS OF THE RESIDENTS IS TOTALLY CRITICAL.

HUMBOLDT COUNTY IS UNIQUE BECAUSE THE NURSING HOME INDUSTRY IN THE COUNTY IS DOMINATED BY ONE PROVIDER.

MY UNDERSTANDING IS THAT THEY HAVE A VIRTUAL MONOPOLY OVER THE NURSING HOME BEDS IN THE COUNTY.

AND HAS USED THAT POSITION TO GET CONCESSIONS OR TRY TO GET CONCESSIONS RELATED TO REIMBURSEMENT RATES AND SORT OF CHERRY PICKING RESIDENTS.

SO THAT IS UNIQUE AND THERE'S AN INTERESTING HISTORY WITH THOSE FACILITIES THAT WERE THE SUBJECT PRIOR TO THE CURRENT OWNER THEY WERE SUED AND THERE WAS A HUGE CLASS-ACTION SETTLEMENT IN A CASE INVOLVING -- I THINK THERE WERE FIVE FACILITIES AT THE TIME IN HUMBOLDT COUNTY, MAYBE SIX, OF A NURSING HOME CHAIN THAT HAD 22 FACILITIES THROUGHOUT THE STATE AND THERE WAS A JURY VERDICT FOR $677 MILLION FOR CHRONIC UNDERSTAFFING GOING BACK THREE OR FOUR YEAR IN ALL 22 OF THOSE NURSING HOMES.

IT WAS A MANY MONTHS LONG TRIAL THAT RECEIVED A FAVOR AMOUNT OF NATIONAL ATTENTION AND REALLY SET A PRETTY GREAT STANDARD IN CALIFORNIA FOR ATTORNEYS DOING THE WORK THAT OUR STATE LICENSING AGENCY SHOULD BE DOING IN POLICING THE UNDERSTAFFING THAT IS GOING ON.

ONCE THAT JURY VERDICT CAME OUT THERE WAS A SETTLEMENT REACHED.

I THINK IT WAS SOMEWHERE AROUND 65, 67 MILLION DOLLARS WAS THE ULTIMATE SETTLEMENT FIGURE.

THOSE NURSING HOMES OR THAT NURSING HOME OPERATOR WENT BANKRUPT AND SOLD THE FACILITIES TO ANOTHER OWNER WHO, I THINK, IS RUNNING THOSE FACILITIES NOW.

SO ULTIMATELY WHAT THAT MEANS, I THINK, IS THERE IS NOT A WHOLE LOT OF COMPETITION WITHIN THE COUNTY.

THERE IS VERY LITTLE COMPETITION AMONG NURSING HOMES AS IT IS, WITH WHICH I THINK IS ONE OF THE PROBLEMS.

THE WORST NURSING HOMES GET PAID AND HAVE THE SAME CENSUS FIGURES AS THE BEST NURSING HOMES.

WHICH IS A HUGE PROBLEM.

EVERY LITTLE BIT OF COMPETITION HELPS AND THERE IS VIRTUALLY NONE IN HUMBOLDT COUNTY WHICH ULTIMATELY HARMS THE RESIDENTS.

THE REASON WHY THE STATE HAS SHOWN SO LITTLE INTEREST IN PROFIT MAX MIZATION AND USE OF RELATED PARTY ENTITIES TO HOODWINK THE STATE INTO WHAT ITS COSTS REALLY ARE AND IT ENABLES THE FACILITIES IN THE INDUSTRY TO COME BACK TO THE LEGISLATURE EVERY TWO OR THREE YEARS AND ASK FOR MORE MONEY.

THE REASON WE HAVE SO LITTLE INTEREST FROM THE STATE IN THAT IS THE STATE SEES IT ROLE -- THE STATE GOVERNMENT SEES ITS ROLE AS TRYING TO KEEP A VERY HEALTHY NURSING HOME INDUSTRY IN THE STATE.

THEY WANT TO KEEP THE INDUSTRY VIABLE.

SO RATHER THAN A CONSUMER PROTECTION AGENCY FOR NURSING HOME RESIDENTS, THE STATE IS REALLY RUNNING A PROVIDER PROTECTION AGENCY.

THEY WILL GIVE LIP SERVICE TO REGULATORY REQUIREMENTS AND TO RESIDENT CONCERNS, BUT ULTIMATELY -- AND I NOW PRETTY MUCH VAST EXPERIENCE IN NURSING HOME POLICY, WHEN PUSH COMES TO SHOVE, THE STATE IS GOING MAKE SURE THE PROVIDERS HAVE AMPLE FINANCIAL INCENTIVE TO STAY IN THE BUSINESS AND PROVIDE LONG-TERM CARE SERVICES.

SO, IN A SENSE, NURSING HOMES KNOW THEY PROVIDE A VERY IMPORTANT AND SPECIFIC SERVICE TO THEIR COMMUNITIES AND THEY'RE EXPENSIVE TO RUN AND HARD TO START UP.

SO THEY HAVE MARKET POWER AND THEY ARE NOT GOING -- SO THERE IS ALWAYS THIS THREAT AMONG STATE POLICY MAKERS THAT A NURSING HOME MAY SHUT ITS DOORS AND IN THE SHORT-TERM HAVE 100 RESIDENTS WITH NOWHERE TO GO WHO NEED VERY EXTENSIVE CARE.

THAT IS A NIGHTMARE.

IN THE LONG RUN, THE COMMUNITY WILL HAVE LESS LONG-TERM CARE SERVICES AVAILABLE, NURSING HOME SERVICES AVAILABLE TO THE RESIDENTS AND THAT DOESN'T LOOK GOOD.

THAT ENDS UP NOT BEING SO GOOD, ESPECIALLY IN THE ABSENCE OF VIABLE HOME AND COMMUNITY-BASED SERVICE ALTERNATIVES.

NOBODY EVER WANTS TO GO TO A NURSING HOME.

THAT SHOULD TELL YOU EVERYTHING YOU NEED TO KNOW.

WE ARE SPENDING BILLIONS AND BILLIONS OF DOLLARS JUST IN CALIFORNIA ON SOMETHING ALL THE CONSUMERS TELL YOU THEY REALLY DON'T WANT.

THAT IS A PROBLEM.

WE NEED TO RETHINK HOW THE CARE IS DELIVERED AND HOW WE PAY FOR IT.

>> THANKS, LINDA, FOR THAT.

THAT WAS AMAZING.

YOU KNOW, THESE THINGS ARE OSTENSIBLY PROFITABLE, THEY STAY IN BUSINESS.

IF MONEY ISN'T BEING SPENT ON IMPROVING THE CONDITIONS OR PAYING EMPLOYEES, WHAT IS THE MONEY BEING SPENT ON?

>> WELL, WHAT I FOUND IN 2017, 2016-2017 WHEN I REVISITED THIS ISSUE IS THAT A LOT OF MONEY IS BEING SPENT, AS TONY SAID, ON RELATED PARTY EXPENSES.

RELATED PARTY EXPENSES, THIS IS A STANDARD TERM THAT COMES UP IN THE TAX FORMS FILED BY THESE COMPANIES WITH THE STATE.

THOSE ARE COMPANIES THAT ARE ALSO OWNED BY THE SAME OWNER OF THE SKILLED NURSING FACILITY.

SO WHAT WE SEE WITH BRIAS IS THEY ARE PAYING THEMSELVES FOR MEDICAL SUPPLIES.

THEY ARE PAYING THEMSELVES RENT THROUGH THIRD-PARTY COMPANY ON BUILDINGS THEY OWN.

THEY ARE PAYING THEMSELVES CONSULTANT FEES, HOME OFFICE FEES, YOU NAME IT.

WHAT I FOUND IN 2016-2017 WAS WHILE THE COMPANY WAS THREATENING TO CLOSE DOWN FACILITIES HERE IN HUMBOLDT COUNTY CLAIMING A SHORT FALL OF $5 MILLION FOR PAYING PEOPLE TO STAFF THEIR FACILITIES.

>> YEAH.

>> THEY WERE PAYING THEMSELVES $5 MILLION THROUGH THEIR RELATED-PARTY EXPENSES.

>> OH, WOW.

>> SO WHAT I FOUND THIS YEAR OR EXCUSE ME IN 2022 WHEN I REVISITED THIS ISSUE THAT ACTUALLY OVER THE PAST FOUR YEARS THE NUMBER OF RELATED PARTIES THEY ARE PAYING HAS ESSENTIALLY DOUBLED.

>> WOW.

>> OVER THE LAST FOUR YEARS THEY HAVE MANAGED TO PAY THEMSELVES $31.5 MILLION.

>> $31.5 MILLION.

>> YEAH.

IN RELATED PARTY EXPENSES.

WORKERS COMP COMPANY BASED IN THE CAYMAN ISLANDS.

>> SHELL GAME IS A TERM THAT COMES TO MIND.

ALTHOUGH YOU HAVE A BUNCH OF DIFFERENT COMPANIES ALL UNDER THE SAME OWNERSHIP AND THERE IS MONEY MOVING AROUND, IT IS HARD TO KEEP TRACK OF HOW MUCH OF THAT IS JUSTIFIED SPENDING AND HOW MUCH IS PUSHING MONEY AROUND IN A PILE.

HOW HAVE LEGISLATORS RESPONDED?

I KNOW YOUR REPORTING GOT A LOT OF ATTENTION.

YOU MENTIONED JIM WOOD TRIED TO DO SOME WORK BUT GOVERNOR NEWSOME AT THE LAST MINUTE DECIDED NOT TO SUPPORT THE BILL.

IS THAT SFLTH CAN YOU CLARIFY THAT FOR ME?

>> YES.

I BECAME INTERESTED LAST YEAR BECAUSE JIM WOOD CAME OUT WITH A BILL TO MANDATE 80% OF ALL STATE DOLLARS BEING SPENT ON PATIENT CARE INSTEAD OF RELATED-PARTY EXPENSES.

THAT BILL WENT THROUGH THE WHOLE PROCESS WITH THE LEGISLATURE.

AT ONE POINT THEY REMOVED THE MEDICARE SPENDING COMPONENT OF THAT LEAVING ONLY MEDICAL SPENDING THAT WOULD BE MANDATED TO BE SPENT ON PATIENT CARE.

ULTIMATELY GOVERNOR NEWSOME VETOED THAT AND HE DID THAT BEFORE MY ARTICLE CAME OUT.

>> WOW.

>> YEAH.

>> DO YOU HAVE ANY SENSE WHAT HIS REASONING WAS AND IS THERE ANY JUSTIFICATION TO THE VETO?

>> WELL, I AM NO LEGISLATIVE ANALYST.

>> SURE.

>> HIS RATIONAL IN THE DECISION NOT TO SIPE THE BILL IS THERE WERE OTHER MARKERS OF PROGRESS BEING PUT IN PLACE.

ESSENTIALLY, INCENTIVES FOR COMPANIES TO MEET CERTAIN BENCHMARKS BEFORE THEY RECEIVE PAYMENT AND THE BILL THEY PUT FORWARD WOULD BE IN CONFLICT WITH THAT.

WHAT TONY CHICOTEL SAID WHEN I ASKED HIM ABOUT THAT IS THAT THE COMPANIES WILL SIMPLY CHANGE THEY HOW REPORT THINGS TO MEET THOSE BENCHMARKS.

>> SURE.

>> IT IS A GAMEIFICATION THAT HAPPENS WITH OUR TAXPAYER DOLLARS.

>> THE COMPANIES WITH THE MOST MONEY TO FIGURE OUT THE STRATEGIES ARE THE ONES THAT GET AWAY WITH IT TOO OFTEN.

IN ORDER TO PUT PRESSURE ON THE LEGISLATOR OR THE GOVERNOR, WHAT CAN PEOPLE DO TO RAISE THE PROFILE OF THIS ISSUE?

>> I THINK THAT WE DON'T HAVE A GOOD UNDERSTANDING OF WHAT IS ACTUALLY HAPPENING AT A LOT OF THESE FACILITIES.

I THINK IT IS A POPULATION THAT WE, AS A SOCIETY, SPEND A LOT OF TIME IGNORING UNTIL WE HAVE A FRIEND OR FAMILY MEMBER WHO ENDS UP THERE, WHICH HAS HAPPENED TO ME.

IT HAS HAPPENED TO A LOT OF PEOPLE.

AND I THINK THAT UNDERSTANDING THAT THERE ARE PEOPLE ACTIVELY SUFFERING RIGHT NOW, YOU KNOW, MAYBE HALF A MILE FROM THE STUDIO DOWN THE STREET FROM HERE, ACTUALLY.

>> MM-HMM.

>> IS AN IMPORTANT PLACE TO START.

KEEPING YOUR EYE ON IT.

TALKING TO YOUR REPRESENTATIVES.

MR. WOOD HAS BEEN A STRONG ADVOCATE FOR REFORM.

>> WE ONLY HAVE 45 SECONDS LEFT.

THE PROMPTS IS PEOPLE TO DO RETIREMENT PLANNING TO PLAN HOW THEY TAKE CARE OF THEMSELVES IN THE FUTURE.

>> THAT IS ABSOLUTELY TRUE.

I THINK THE AGE YOU AND I ARE ABOUT THIS AGE, JAMES, IS WHEN WE SHOULD START PLANNING FOR THIS, NOT WHEN WE ARE READY TO RETIRE.

>> YES.

>> I ALSO WANT TO PUT A PLUG IN FOR THE AREA ONE AGENCY FOR AGING, THERE IS A PROGRAM PEOPLE CAN VOLUNTEER THAT AND THOSE ARE ADVOCATES WHO GO INTO NURSING HOMES AND HELP PROTECT PATIENT RIGHTS.

IF PEOPLE ARE INTERESTED IN HELPING THAT WOULD BE THE PLACE TO START.

>> THANK YOU, LINDA.

>> THANK YOU.

>> IF YOU LIKE THIS STORY AND WOULD LIKE TO DIVE DEEPER IN, LISTEN TO OUR PODCAST WHAT'S WRONG WITH HUMBOLDT AND HOW TO FIX IT.

EPISODE 3.

AVAILABLE WHEREVER PODCASTS ARE AVAILABLE.

WE'LL BE RIGHT BACK ACH -- AFTER THIS SHORT BREAK.

>> ARCATA'S TOWN AND GOWN IS.

CALL POLY IS BREAKING GROUND ON APARTMENTS BUT THE FIRE DEPARTMENT SAYS IT LACKS FIREFIGHTERS TO PROTECT THE UNITS.

>> THE UNIVERSITY PLANS TO HOUSE 1,000 STUDENTS IN THE KRAATZMAN'S MALL.

CALL POLY SAID THE SIX AND SEVEN STORY BUILDINGS WOULD NOT OVERSTRETCH THE ARCATA FIRE DISTRICT.

>> WE WROTE THEM A RATHER POINTED AND STRONG RESPONSE SAYING WE DIDN'T THINK THAT WAS THE CASE.

>> A FIREFIGHTER SPOKESPERSON SAID BEST PRACTICES REQUIRE 38 FIREFIGHTERS TO ARRIVE WITHIN 10 MINUTES TO FIGHT A FIRE IN A FOUR TO EIGHT STORY APARTMENT BUILDING.

IT WOULD TAKE ARCATA FIRE AND REGIONAL PARTNERS AT LEAST 42 MINUTES.

>> THOSE MINUTES WOULD BE POTENTIALLY LETHAL.

PEOPLE STUCK IN A BUILDING, SMOKE INHALATION.

WE DON'T BELIEVE WE WILL GENERATE REVENUES IN THE NEXT 25 YEARS TO INCREASE OUR STAFF.

>> AS FAR AS CAL POLY, WE HAVE BEGGED, PLEADING, THREATENED, WE CAN'T MAKE THEM PAY THEIR FAIR SHARE.

I KNOW WE NEED HOUSING, BUT WE NEED SAFE HOUSING.

>> ALL OF YOUR PROBLEMS MAY GO AWAY IF THE STATE COMES THROUGH AND SAY IT IS SO IMPORTANT FOR THEM TO HAVE THOSE SIX AND SEVEN-STORY BUILDINGS THAT WILL GIVE YOU $5 MILLION A YEAR PLUS BUILD YOU ANOTHER STATION >> THE CITY HAS NO AUTHORITY OVER THE UNIVERSITY.

IT CANNOT TAX CPH NOR CAN IT LIMIT CAL POLY'S CONSTRUCTION.

THEY HAVE IN THE GATEWAY WHERE THEY ARE ALLOWING FIVE TO EIGHT STORY, APARTMENT BLGTS.

>> WE ARE RECOMMENDING YOU LIMIT BUILDING HEIGHTS TO 40 FEET.

THAT IS UNDER FOUR STORIES AND THAT YOU WOULD HOLD THAT IN PLACE UNTIL THERE WAS ADEQUATE FUNDING.

>> IT IS ALSO COST FEASIBLE AND REASONABLE TO HAVE MITIGATION MEASURE THAT SAYS WHEN YOU BUILD A BUILDING OVER X STORIES TALL YOU HAVE TO CONTRIBUTE TO A FUND.

THAT FUND THEN GOES TOWARDS PURCHASING NEW EQUIPMENT FOR SERVICES THAT CAN'T CURRENTLY BE PROVIDED.

>> IT IS UNCLEAR WHETHER THAT FUND WOULD PAY FOR FIRE STAFFING OR WHETHER THE CITY COUNCIL WILL APPROVE THE HIGH RISES.

THE UNIVERSITY SAYS IT WILL RESPOND TO ARCATA FIRE'S CONCERNS.

ERIC BLACK, "HEADLINE HUMBOLDT", ARCATA.

>> THANKS, ERIC, FOR THAT REPORT.

THAT'S IT FOR TONIGHT.

ENJOY YOUR LONG WEEKEND AND WE'LL DEFINITE I WILL SEE YOU NEXT WEEK.

STAY TUNED.

STAY INFORMED.

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