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July 18, 2008

Atria, Lazard, I'm On Randi Rhodes Today at 2pm Pacific

-- by Dave Johnson

I think I will be on the Randi Rhodes show today to talk about senior care. If I am on here is what I am going to say.

I have been working with The Campaign to Improve Assisted Living which is a project of SEIU Healthcare, the nation's largest union of healthcare workers.

Atria Senior Living is a chain put together by the "Bermuda-based" (HA!) Wall Street "buyout firm" Lazard. Atria is owned by a "Lazard-affiliate" which means they have set up a number of companies that are supposedly separate but really are part of Lazard, but it is difficult to learn who owns what. Atria is controlled by Lazard Real Estate Partners and their parent company, Lazard Alternative Investments.

At the top of the Lazard food chain is Bruce Wasserstein, chairman and chief executive officer of Lazard, Ltd. and Lazard Group. Wasserstein and his family own a significant share of LAI and Wasserstein has veto power over many of LAI’s major corporate decisions. He received $41 million just last year, and has signed a 5-year pay package worth another $100 million. This even as Lazard's stock drops.

The reason Lazard put together Atria was that the Boomers are aging, so care for the elderly was seen as a "next big thing" type of investment to get into. Over time more and more retirement and care facilities will be needed. Lazard gathered a number of large investors, and promises a revenue stream. So the investors are the customer -- the seniors and their remaining savings and incomes are the PRODUCT.

To make money a firm like Lazard cuts costs. That is called "efficiency." But what it means is that the services for the elderly are reduced. And it means that the employees are squeezed. They are paid $8-10 an hour. They can't afford health insurance. And they cut back the staff, which means the employees are stretched and the seniors are receiving less in the way of care and services. As a result Atria has been cited thousands of times across the country for care problems (the resident gets someone else's medicine, etc.). Partly this is because it's the wild west out there for assisted living. Everything is different state by state, there's very little regulation, etc. but the main problem is this unaccountable ownership structure -- which results in enabling Lazard and Wasserstein to see the seniors in Atria as nothing more than economic units -- a product they serve up to the investors.

If Atria stops fighting unionization then the staff will be increased and the workers can make improvements for themselves and for the residents. Unions can really help improve care. Hospital and nursing home workers have negotiated improvements to staffing levels, training programs so they can give the best care, and of course raising pay and benefits helps a lot with reducing turnover among the lowest paid caregivers--lower turnover means better care, more qualified and experienced staff, etc.

Please go visit The Campaign to Improve Assisted Living!

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

Posted by Dave Johnson at July 18, 2008 8:23 AM

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