Monday, March 5, 2001: Rising Insurance Hobbles Nursing Homes

Sentinel Staff Writer

Scott Bell is dressed in a dark suit, striped tie and dress shirt with a polo pony embroidered above his heart.But he feels as if he's wearing a bull's eye on his chest.

Bell's Halifax Convalescent Center nursing home in Daytona Beach has been sued more during the past five years than any other nursing home in Central Florida.Although most incidents took place before Bell bought the facility in 1998, the lawsuits are something that come right along with the 120 beds, linens, silverware and manicured grounds.

Bell's Delta Health Group owns 31 Florida nursing homes and is fighting 30 lawsuits statewide. Defending his nursing homes against those suits will cost him a minimum of $1.5 million in insurance deductibles, Bell said.

"I've been targeted by the trial lawyers," said Bell, 47. "I'm to the point where if I don't fight back, I'll lose it all."


Delta Health Group's reputation as a nursing-home chain gets mixed reviews by consumer advocates. Three of Delta's homes, including Halifax, appear on Consumer Report's watch list of Florida's problem nursing homes. Two other Delta homes, Salerno Bay Manor and Margate Health Center in South Florida, are ranked in the bottom third in terms of care by the state's Agency for Health Care Administration.

"These guys are not the worst in the state, but they aren't in the running for a gold seal either," said Barbara Hengstebeck, head of the Coalition to Protect America's Elders, a Tallahassee-based nursing-home residents' advocacy group.

In an industry that has developed a press-shy bunker mentality, Bell is upfront and outspoken, leading the charge for legislative reform to limit nursing-home lawsuits.

Without such reform, Bell said, he will be out of business. His liability insurance has increased from $500,000 to $4 million during the past five years. When that policy expires in April, Bell doesn't expect to find anyone willing to insure his facilities.

"There is nobody reinsuring nursing-home beds in Florida," he said. "If we don't have meaningful . . . reform, everything I have will go away."

Bell has been in the nursing-home business 25 years. In 1976, at age 22, he was the youngest licensed nursing-home administrator in Florida. He purchased his first nursing home, Rosewood Manor in Pensacola, in 1994. The privately held, for-profit Delta Health Group is now the fourth-largest nursing-home chain in the state.

"I have a genuine interest in senior adults. I love old people," said Bell, who worked in hospital administration before switching to nursing homes. "They are the historians of our society."

When he bought Halifax Convalescent Center as part of a four-facility deal, it was already a nursing home with a history of attracting lawsuits: "When we acquired Halifax, it was in trouble. It had struggled with staffing and its reputation in the medical community. Once your reputation slides, you become a target. It opens the floodgates to lawsuits."


Since then, Bell said, he has increased staffing, boosted salaries, improved training and spent money on remodeling. In its most recent inspection records, there were no reports of patient neglect or abuse.

But the facility received seven quality-of-care citations, which places Halifax at the bottom fourth of Central Florida's nursing homes for those violations.

"The level of care didn't improve after Delta purchased it. If anything, it decreased," said Orlando attorney Steven R. Maher, who has filed three lawsuits against Halifax in the past year.

Bell disputes the trial lawyers' contention that lawsuits are the result of poor quality of care. Overall, Bell said, Florida's nursing-home residents receive exceptional care.

But the best care will not prevent accidents and incidents that result in lawsuits, Bell argues: "Lawsuits are event-driven. When a person slips and falls, that's not necessarily a quality-of-care issue."

Some suits against the Halifax nursing home involve serious injuries.

In one case, which occurred in March 1997 before Bell bought the facility, a man admitted to the nursing home developed an ulcer on his right heel. Two months later, suffering from gangrene, he was taken to Halifax Hospital, where his right leg was amputated above the knee. The suit was settled in January for $280,000.

Another lawsuit, filed after Bell bought the facility and still pending, alleged that a 79-year-old man died as the result of dehydration, malnutrition, falls and bedsores that occurred at the nursing home.

One of the state's largest nursing-home chains, Beverly Enterprises Inc., approached Bell -- who used to work for the company -- about acquiring its Florida nursing homes, he said. In the past, Bell might have considered it. In the past, he looked at a prospective nursing home in terms of its location, its clientele, its market niche, its revenue and profitability. Now he looks at its insurance liability.


Beverly's insurance-liability premiums are more than $30 million, Bell said: "If Beverly came to me and said we will give you our properties, I would inherit a $30 million problem."

From where Scott Bell sits, the nursing-home landscape looks like a citrus grove after a freeze and before the bulldozers. He has seen nursing-home lawsuits in Central Florida triple in the past five years. Out-of-court settlements three times higher than the national average. A third of the state's nursing homes operating without insurance. Insurance companies pulling out of Florida. Nursing-home chains in bankruptcy.

"The trial lawyers have picked the trees clean. Now they're cutting the trees down," he said. "And when that happens, the industry will go away."

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