Corporatism, healthcare, Privatization, Veterans — February 24, 2016 at 12:46 pm

Mistreatment of elderly veterans result of privatizing government services to for-profit group with no background in healthcare


NOTE: Big tip o’ the Eclectahat to Eclectablog reader D. Harvey D. who provided much of the background research and perspective for this post.

I’ve already written about the scandal involving the mistreatment of elderly disabled veterans at the Grand Rapids Home for Veterans. A report released by the State Office of the Auditor General detailed a scathing laundry list of abuses and infractions, some of which resulted in veterans being injured and many complaints which were handled inappropriately or simply ignored.

These horrific revelations are due to the privatization of nursing care to the company J2S Group, Inc. First incorporated in Michigan in 2005 under the name CSS Healthforce, Inc., the group was started by brothers Chris and Timothy Frain. The Frain brothers have no background in healthcare. In fact, after they both dropped out of Calvin College, they went on to form Corporate Security Solutions – note the acronym “CSS” – a group setup to provide security services. In 2007, the two college drop outs secured a contract with the U.S military:

In the wake of Hurricane Katrina in 2005, the firm contracted with the Federal Emergency Management Agency to protect commercial buildings and trailer parks. At its peak, it had 600 employees in the New Orleans area.

Some of the contractors there — Blackwater included — had considerable business in Iraq. That gave the Frains an idea: Why not us?

In 2007, the firm won a Department of Defense contract to provide personal security and convoy security, and the firm set up a compound about a mile outside the heavily fortified Green Zone.

They later won contracts to build and transport cement barriers and modular housing used by the military. Their corporate advantage: They can both build these products and then provide the security and ability to ship anywhere in the country. It’s otherwise known as vertical integration. Their cement plant and housing assembly operation sit on several acres, next to the compound of Iraqi President Jalal Talabani.

In 2009, they were hired by the country of Somalia. In 2011, Chris Frain teamed up with another of the original founders of CSS Healthforce (aka J2S Group) Andy Shaffer to form a holding group called Tyton Holdings to buy and sell businesses for a profit.

So the Frain brothers, along with various relatives, were doing security services under government contract while simultaneously developing a separate business to provide healthcare services and yet another to buy and sell other companies and even found time to start a dumpster and portable toilet business, as well.

During this time, J2S Group secured a state contract to privatize some of the healthcare services provided at the Grand Rapids Home for Veterans and, in 2011, further privatization plans were unveiled to replace unionized nurses aides at the home with employees provided by J2S Group, as well. The cost savings to the state were estimated to be $4 million a year. In 2013, Gov. Snyder laid off over 170 nurses aides and J2S replaced them with workers making a fraction of the wages earned by the men and women they replaced.

It was this move that led to the issues we have today.

Reports of the terrible treatment of these retired military veterans began to emerge as early as 2014:

New information sheds light on what seems to be a deteriorating relationship between the State of Michigan and the company that helps provide care at the Grand Rapids Home for Veterans.

This new information comes a day after the 13 Watchdog Team confirmed from several state leaders the facility is often not at full staffing. Many employees, we are told, are forced to work double shifts to make sure minimum staffing is met.

“We’ve already gone on record to say it’s a problem,” interim Home For Veterans CEO Jim Dunn has said. “We’re not satisfied with the shortages.”

Those shortages are spelled out in two complaints the 13 Watchdog Team received, one from March 2014 and one from this past March. Both have similar language.

In 2014, Kimberly Graham from the Michigan Department of Military & Veterans Affairs wrote, “Please be reminded, should you continue to neglect correction of these poor services to the GRHV, I will recommend cancellation of the contract, by default of contractor.”

That’s a warning she repeated a year later.

The staffing shortages were brushed off by Michigan Veterans Affairs Agency Deputy Director of Service Administration Jim Dunn who is in charge of running the home. He said as late as last October that things were getting “consistently better”. J2S Group representatives blamed the shortages on people calling in sick or showing up for work late and claimed they had a 97% “fill rate” which is at or above industry standard.

Tim Frain was also assured the state that everything was just fine:

The admission by J2S that the company is not meeting minimum standards is quite different then the company’s written response to the state in April. J2S Group CEO Tim Frain wrote that his company was performing the correct duties and hired enough staff “to cover this contract’s shift requirement many times over.”

After a federal audit released last October showed numerous violations at the home, J2S Group spokesperson John Truscott naturally blamed the unions:

“Most of these allegations are either false, or not directed at J2S,” company spokesman John Truscott said Thursday. “This is nothing more than a union attempt to try to overturn a state policy of privatizing some of the work.”

The recently released audit proves all three men were wrong and possibly lying.

The fact is that the Snyder administration attempted to carve $4 million of annual costs out of a single healthcare facility for military veterans and, in the process of awarding the work to a company with no background in providing healthcare, the veterans suffered. Not surprisingly, J2S Group has high turnover and trouble maintaining a full staff. That’s what happens when you pay people poorly and overwork them, all in the name of corporate profits.

J2S Group claims they “never run short staffed” and are passionate about not only supplying the right number of staff but providing a quality of staff that result in an exceptional work environment”. They may be passionate about that but they have clearly proven to be incapable of achieving it.

The real question here is how J2S Group secured the contract in the first place. How did a company founded by two college drop outs with no background whatsoever in providing healthcare services end up with a lucrative state government contract to care for elderly, disable military veterans? And how is it that, after years and years of proven malfeasance and inadequacy, they have kept their contract and continue to profit from taxpayer dollars?

I’ll be following this story as more information comes to light.

[CC photo credit: DVIDSHUB | Flickr]