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Life Care Centers Of America Inc. Business Information, Profile, and History

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3570 Keith Street N.W.
Cleveland, Tennessee 37312-4309
U.S.A.

Company Perspectives:

Life Care Centers of America is committed to being the premier provid er of long-term care in America. It is our desire to be the facility of choice in any community in which we operate. Our programs, service s and facilities must be designed and operated with superior quality in order to satisfy the needs of our residents.

History of Life Care Centers Of America Inc.

Life Care Centers of America Inc. (LCCA), a privately owned operator of retirement and health care services, manages more than 260 facilit ies in 28 states. The company offers a variety of retirement and heal th care services under eight divisions: Alzheimer's care, nursing car e, assisted living, rehabilitation services, campus care, retirement center, home care, and specialty services. The Alzheimer's care divis ion provides services for people suffering from Alzheimer's disease. The nursing care division offers skilled nursing care, and physical, speech, and occupational therapies at a patient's place of residence. LCCA's assisted living division offers assistance with scheduling me dical appointments and medication management, and assistance with suc h daily living activities as bathing, dressing, grooming, and walking , as well as monthly blood pressure, weight, and nutritional checkups . The rehabilitation division provides physical therapy, occupational therapy, and speech-language pathology. Under the campus care divisi on, the company operates multiple facilities, including retirement, a ssisted living, nursing care, respite care, Alzheimer's care, rehabil itation services, and wellness programs (blood pressure and health ca re screenings). LCCA retirement center division operates almost 40 in dependent and assisted living communities in 20 states, providing hos pital living conditions, dining services, security and emergency call system, and maintenance of facilities. The home care division addres ses the needs of people who are recovering from an illness or surgery , or for individuals who are chronically ill. These services include skilled care services (injections, dressing changes, or administratio n of medication), physical therapy, occupational therapy, speech ther apy, sitters and private services, live-in-services for patients unab le to take care of themselves, and social services that address the s ocial and emotional needs of the patient. The specialty services divi sion provides respite care, sub acute care, wound care, hospice, and adult day care.

Origins

LCCA was founded in 1970 by Forrest L. Preston, who built his first f acility, known as Garden Terrace Convalescent Center, in Cleveland, T ennessee. From 1970 to 1976, Preston built six more centers, five in Tennessee and one in Florida. He incorporated the company as Life Car e Centers of America in 1976. In 1989, he established Garden Terrace as a division of Life Care as a specialty care center devoted to the care and treatment of patients with Alzheimer's disease and other dem entias. He opened his first such facility in the fall of 1989 in Auro ra, Colorado with the aim of building a chain of these specialized ca re facilities across the country.

1990s: Growth and Expansion

As part of its growth strategy, in 1994 LCCA teamed up with drugstore chain Jack Eckerd Corp., a manager of 710 drugstores in 13 states, t o establish home health care centers within selected Eckerd drugstore s. Eckerd saw the collaboration as a promising opportunity to broaden its health care services to customers. Under the deal, Life Care wou ld own and operate the centers, which would provide a complete line o f home health care products, including canes, crutches, safety side r ails, sports braces, hospital beds, ostomy and incontinence supplies, wound care products, diabetes supplies, as well as respiratory thera py equipment. The centers, ranging in size between 700 to 1,000 squar e feet, would be staffed by trained nurses who would conduct laborato ry tests and orthotic fittings. The centers would also offer the serv ices of physical therapists and medical social workers upon request.

In April 1994, Del Crane Medical Corporation, a maker of medical soft ware and supplies, sued Life Care for allegedly violating its copyrig ht of a software program and for not paying for its use. In the suit filed in federal court, Del Crane claimed that Life Centers interfere d with contracts that Del Crane signed with the 140 nursing homes. De l Crane altered the 140 individual licensing agreements in early 1993 to one master agreement. In April 1993, however, the nursing homes n otified Del Crane that they were changing to different software. The suit claimed that while some Life Care nursing homes continued to use Del Crane's software, others switched to almost identical software p roduced by former Del Crane employees. The suit claimed that the nurs ing homes that continued to use the software ceased making payments t o Del Crane. In a separate suit filed at the same time, Del Crane cha rged Life Care with misusing a joint venture formed between the two f irms. In 1990, the two companies created Del Care, a partnership to p rovide supplies and billing services to Medicare patients. According to the suit, Life Care was using Del Care's name and tax identificati on number for activities outside the joint venture.

In March 1995, Life Care broke ground on a new Garden Terrace Alzheim er's Center in Houston. The new center represented the first of its k ind and one of only a few in the nation devoted exclusively to people with Alzheimer's disease. The 64,000-sqaure-foot, 120 bed center was anticipated to cost $6 million to build. Once built, the Garden Terrace facility offered 24-hour supervision and nursing care, in add ition to respite care and day care. The center also provided resident s with physical, occupational and speech therapies by licensed staff. The center was designed to offer residents in each stage of the dise ase a different environment and care plans. The center also included special types of lighting, color and interior décor to sooth p eople with Alzheimer's disease. Other amenities included private dini ng rooms, visitor lounges, outdoor patios, an ice cream parlor, a gif t store, and a beauty and barber shop. The new facility joined the co mpany's other specialized Alzheimer's care centers in Aurora, Colorad o and Salt Lake City, Utah. The company began to build these speciali zed centers with an eye on the demographics. The Alzheimer's Associat ion had estimated, for example, that 4 million Americans had the dise ase with more than 100,000 dying from it each year, making it the fou rth leading cause of death among all adults. At the time when Life Ca re began building the Houston facility, more than 265,000 Texans were suffering from the degenerative disease with an estimated 25,000 of these people in the Houston area alone. Although members of the Texas Council on Alzheimer's Disease and Related Disorders supported cente rs that care for Alzheimer's patients, it nevertheless was pushing fo r legislation that would require such care facilities as Garden Terra ce to file disclosure statements with the state in order to receive c ertification. In subsequent years, Life Care opened other specialized Alzheimer's facilities in Fort Worth, Texas; Charleston, South Carol ina; Overland, Kanas; Estero, Flordia; and Federal Way, Washington.

In June 1999, the institutional pharmacy services business, Omincare Inc., acquired Life Care's pharmacy services company. Omnicare purcha sed Life Care Pharmacy Services Inc., from Forrest Preston, the found er, chairman, and only shareholder of Life Care Centers of America. A t the time of the acquisition, the Life Care's was providing pharmacy services to over 17,300 elderly residents in 12 states. With the acq uisition, Omnicare's services covered approximately 617,000 residents in 8,600 long-term care facilities in 43 states.

Complaints, Lawsuits, and Looking to the Future

In February 2001, the magazine Consumer Reports named a Life C are Center in Oregon on its published nursing home watch list. The li st, based on state survey reports between 1995 and 1998, was compiled by inspectors making surprise visits to home care facilities to obse rve care, examine sanitary conditions, and investigate complaints. Ne vertheless, Jerry Weldon, an administrator who had been hired to impr ove operations at the facility said that there had been major improve ments to clinical and staffing problems at the nursing home. In 1997, as Life Care proceeded to open a new facility in Lakeville, Massachu setts, the company paid a $650,000 settlement over a claim of neg ligence at its Raynham location. Another 79-year-old woman died in Li fe Care's West Bridgwater facility shortly after she moved in after a nurse accidentally gave a lethal overdose of morphine. The company f ired the nurse and an investigation by the Plymouth County District, Department of Health, medical examiner concluded the death resulted f rom human error, rather than from company-wide substandard care. Like other companies in the industry, Life Care faced complaints of poor care, but overall the large for profit, private company was found to be on par with others in the retirement and health care services busi ness.

In October 2000, Life Care's Plainwell, Michigan facility lost a Nati onal Labor Relations Board (NLRB) dispute with Local No. 79 of the Se rvices Employees' International Union for refusing to bargain followi ng the union's certification. Following an election on October 22, 19 99, the union won certification on January 7, 2000, as the exclusive collective-bargaining agent of the employees of the nursing care faci lity. The company refused to both recognize and bargain with the unio n as the exclusive representative under Section 9(a) of the National Labor Relations Act. As a result, the NLRB found the company to have engaged in unfair labor practices and to be in violation of the Act.

The company moved to a web-based document and delivery storage manage ment system in 2001 to streamline the printing and distribution of fi nancial and other reports for its 230 elder-care facilities and seven regional offices in 28 states. The web-based system, called ReportSa fe, was estimated to save Life Care $55,917 yearly by eliminating the piles of paper. The company spent $20,250 on the cost of tra ining and software implementation, and anywhere from $32,000 to & #36;80,000 on the ReportSafe software. There was a downside to the so ftware, however, requiring a long six-month implementation period as numerous rules needed to be written for the application to work with 500 users in almost 300 locations.

In 2003, a lawsuit was filed against Life Care's Las Fuentes Care Cen ter in Phoenix, Arizona filed for alleging taking money out of employ ee paychecks for heath insurance but not paying the premiums. The Ari zona Court of Appeals ruled that the company could not be sued in sta te court, stating that any claims employees had fell under the federa l pension laws and must be filed in federal court. Court records evin ced that Life Care, which operated the Las Fuentes Care Center, signe d a 1998 agreement with Premier Healthcare of Arizona for health insu rance for the Las Fuentes employees. Under the agreement, Las Fuentes would pay the monthly premiums financed by both employee payroll ded uctions and its own contributions. Three years later some of the empl oyees filed a class action lawsuit in Maricopa County Superior Court, claiming the company had ceased remitting the payroll deductions.

In 2004, elder care provider Hillhaven and Life Care formed a joint v enture under the name Medlife Pharmacy Network to provide pharmaceuti cal and medication delivery systems, infusion and enteral therapy ser vices, and pharmacy consulting services to long term care and sub acu te care facilities. With this venture, the company continued to look to expand in new ways in the $1.7 trillion U.S. health care servi ces market, the world's largest.

Principal Divisions: Alzheimer's Care; Nursing Care; Assisted Living; Rehabilitation Services; Campus Care; Retirement Centers; Hom e Care; Specialty Services.

Principal Competitors: Beverly Enterprises Inc.; Sava Senior C are LLC; Sun Healthcare Group Inc.

Chronology

  • Key Dates:
  • 1970: Forrest L. Preston founds company as Garden Terrace Conv alescent Center.
  • 1976: Company is incorporated as Life Care Centers of America Inc.
  • 1989: Company establishes Garden Terrace as division devoted t o care and treatment of Alzheimer's disease.
  • 1999: Omnicare Inc. acquires Life Care Pharmacy Services Inc.
  • 2004: Hillhaven and Life Care Centers of America form joint ve nture called Medlife Pharmacy Network
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