The Missing Principle
Why Eldercare Reform Keeps Fixing Violations and Never Fixes the Hierarchy
By Rick Beeman — Ars Moriendi Project
The first essay in this series asked where empathy’s claim sits within a healthcare system that also has to answer to capital. And what happens to a person when that claim comes last? The answer: that claim — recast in legal terms as the primacy of care over fiduciary return — is not stated anywhere in nursing home law. Not as a principle. Nearly every reform effort over the last several decades has instead targeted individual violations one at a time, and the pattern of that targeting is worth naming precisely because the pattern is the problem.
The whack-a-mole pattern
Staffing minimums address understaffing. Related-party disclosure rules address hidden self-dealing. Profit caps, where they exist, address excessive extraction. Survey and citation systems address specific failures of care after they’ve already occurred. Each of these is a real rule aimed at a real harm, and some of them work reasonably well on their own terms.
None of them states the principle that would make all of them coherent: that a resident’s care must take priority over a shareholder’s return, as a matter of stated legal hierarchy, not as an inference a court or regulator has to reconstruct from a list of specific prohibitions. Reform is written as: don’t understaff below this ratio, don’t hide this related-party payment, don’t extract more than this percentage. What reform does not say is: care comes first, and the fiduciary duty to the owner is subordinate to it. Absent that stated principle, every new rule closes one gap and leaves the underlying hierarchy — capital’s claim ranked above the resident’s — untouched. The industry adapts to each rule individually because no rule has told it that the hierarchy itself is wrong.
The analogue that already exists in law: ERISA
This is not a novel legal concept. It already exists, fully formed, in another part of American law. ERISA — the Employee Retirement Income Security Act — governs pension and benefit plan administration, and it does more than list prohibited transactions. It states a standing principle: a plan fiduciary must act “solely in the interest of the participants and beneficiaries” and “for the exclusive purpose of providing benefits.” That is a primacy statement. It does not merely say “don’t do X, Y, or Z with the pension fund.” It says whose interest governs, ranked above all others, including the fiduciary’s own. Specific prohibited-transaction rules exist under ERISA too — but they sit on top of the primacy principle, as illustrations of it, not as a substitute for it.
Nursing home law has the prohibited-transaction layer. It has never adopted the primacy layer beneath it.
The analogue that already exists in law: public utility regulation
The second analogy is public utility law’s “obligation to serve.” A regulated utility is permitted to earn a return — utilities are, after all, investor-owned in most of the country — but that return is conditioned on and subordinate to a standing duty to serve the public reliably, safely, and without discrimination, at rates a regulator finds just and reasonable. The utility’s shareholders do not get to vote on whether the lights stay on. The obligation to serve is not one rule among many; it is the organizing principle from which the rate-setting, service-quality, and investment-return rules derive their coherence.
A nursing home accepting Medicaid dollars is, functionally, providing a public-benefit service with public money in an industry with essentially no consumer choice mechanism for the person actually receiving the service. It has never been regulated under a utility’s organizing principle. It has been regulated with a checklist.
Why the payer cannot enforce the principle either
The gap is worse than “no stated principle” because of who is actually in a position to enforce one. In a Medicaid-funded placement, the state, not the resident, pays the bill. The resident has no market leverage over the facility — she cannot renegotiate her rate, cannot credibly threaten to leave for a competitor, and cannot withhold payment to signal dissatisfaction, because she was never the one paying. The ordinary mechanism by which a paying customer disciplines a vendor — take your business elsewhere — does not exist for her.
What accountability exists arrives, when it arrives at all, after the fact and often after her death: a wrongful-death or elder-abuse lawsuit brought by her family, litigated for years, and resolved by a settlement that becomes a line item the facility had already priced in as a cost of doing business. That is not a primacy-of-care principle operating in real time. It is a tort system operating as a delayed, partial, and monetized substitute for a principle that was never stated in the first place. The absence of the ERISA-style or utility-style organizing rule is precisely why the only enforcement left standing is the slowest and most damage-dependent one available.
Where the gap actually gets filled
Between the state’s oversight (checklist-based, retrospective, survey-cycle-driven) and the family’s eventual lawsuit (retrospective, posthumous), the gap in daily care is not left unfilled. It is filled by the family that placed her there — extra visits, feeding assistance, laundry, watching for bedsores, and advocating with staff over a call light that went unanswered. This labor is unpaid and structurally invisible to the regulatory system; it appears nowhere in a cost report or a staffing ratio.
It is also frequently unwelcome. A family member who visits often enough to notice gaps and says so is commonly treated by facility staff and administration as a source of complaints or a management problem to be handled, rather than as a party supplying labor that the facility’s own staffing model failed to provide. The family is, in effect, penalized for doing the work the primacy-of-care principle would have obligated the facility to do itself. A system with a stated hierarchy — care first, enforced as a duty running to the resident — would treat that family’s observations as the frontline monitoring data they actually are. A system without one treats them as friction.
What a stated principle would change
None of this argues against staffing minimums, disclosure rules, or profit caps. Each remains necessary. The argument is that they are currently the entire structure, when they should be the enforcement mechanisms beneath a structure that does not yet exist in nursing home law: a stated rule that a facility’s fiduciary duty to deliver care to the resident outweighs its fiduciary duty to deliver a return to its owners, as ERISA ranks a plan’s duty to its beneficiaries above all else and utility law ranks the obligation to serve above the shareholder’s expected return.
Stated as a primacy principle, the existing point-fixes cease to be an ad hoc list and become derivations of a single rule — the same relationship that prohibited-transaction rules have to ERISA’s exclusive-benefit standard. A profit cap becomes an application of the principle, not an isolated cap. A staffing minimum becomes an application of the principle, not an isolated ratio. A related-party disclosure rule becomes an application of the principle, not an isolated transparency measure. And a court or regulator evaluating a new extraction technique that no existing rule anticipated — because the industry adapts faster than the specific-violation model can be amended — would have a standing principle to apply, rather than needing to write a new rule after the harm has already occurred.
That is the missing piece from every version of nursing home reform now on the table: not another prohibited transaction, but the primacy statement on which the prohibited transactions are supposed to stand.
The third essay in this series asks whether “empathy” is even the right word for the obligation this principle would impose, or whether the law needs a different concept altogether to make the primacy principle enforceable.
Ars Moriendi Project — 501(c)(3), EIN 85-4298754. Publisher: Everyday Elders.