Tinker Ready

1991: Inspectors say rest home operator cut corners on care. The owner did well; patients didn’t.

Trouble at rest homes

Lawsuit, fines plague state’s largest owner

Inspectors cite health, safety problems

TINKER READY; Staff writer
June 24, 1991

The News & Observer Raleigh, NC


Steve Pierce is so sure of the quality of his rest homes that he keeps his mother in one.

Since 1970, when he turned a Kernersville motel into a home for the elderly, Mr. Pierce has accumulated 34 homes, making him the largest, most influential rest home operator in North Carolina.

His investments in elderly care facilities, real estate and restaurants have made him wealthy—a man of “affluence and influence,” according to a 1987 advertisement for his company.

But for some residents of Mr. Pierce’s homes, life has not been as kind.

In Durham, patient care problems at his Heritage Care home at 3420 Halloway St. led county officials to reject his license renewal request in January, forcing him to eventually sell the 142-bed home and leaving him with 33 homes.

The state also has found problems at some of his other homes. During the past two years, the state Division of Facility Services has levied fines against 11 of his homes for a variety of health and safety problems.

In one case, a resident wandered from a home and spent a rainy night in the woods before being discovered. In another case, a toothless resident was rushed to the emergency room with a pork chop lodged in his throat.

In addition, his homes have been cited repeatedly for failing to provide residents with insulin and other medications and for failing to call doctors when patients were ill or injured. In other cases, the state has cited his homes for failing to keep patients clean and groomed.

Mr. Pierce’s homes contain 2,600 beds, or 12 percent of the beds in the state. Since July 1989, about 26 percent of the state cases in which rest homes were fined involved his homes.

Mr. Pierce, however, said the state should look down its own halls to find the cause of patient care problems.

His homes could be better, he said, if the state would increase its $24.80-per-day payment for the care of the indigent elderly and mentally ill who occupy the majority of the beds at his homes. The rate is too low and keeps homes from improving services or hiring extra staff, he said.

Problems cited

Advocates for rest home residents attribute many problems at Mr. Pierce’s homes to two causes.

A problem throughout the industry is that sick, frail patients who cannot get into the state’s crowded nursing homes are ending up in rest homes, which are not equipped to handle them.

“Because of the pressure to discharge patients from the hospitals as soon as possible, often physicians seek the available bed rather than the most appropriate level of care for their patients,” said Beverly P. Wheeler, a Pitt County rest home inspector.

Rest homes are required only to provide personal care services such as meals, grooming and transportation. They have lower staffing requirements than nursing homes, which offer medical care and are required to have nurses on staff.

Another problem, several social workers said, is that many of Mr. Pierce’s homes meet minimum standards and stop there.

“Anyone who meets the minimum standards can easily fall below the line if they’re right on it,” said Harriet G. Seiderholm, Catawba County adult service supervisor.

Whatever the cause, the conditions at Mr. Pierce’s Durham home led five former residents and their families to file a lawsuit in Durham Superior Court charging Mr. Pierce with “institutional abuse” at the home.

“’This is a slaughter pen. I’m going to die here,’” Laverne McCray, a part-time aide at the home, remembers one resident telling her.

“I would attempt to reassure her and tell her that she was strong and would survive, but privately I shared her belief,” Ms. McCray said in a sworn statement filed in connection with the suit.

Mr. Pierce’s attorneys deny the charges in Durham. But similar allegations have emerged in other communities where he operates.

On Thursday, the state fined Mr. Pierce’s Tri-City Haven Rest Home in Kernersville $500 for improperly restraining a woman who was found dead in the home in February. The 81-year-old woman was found suspended from her bed by a vest restraint that was wrapped around her chest and “likely” died from asphyxiation, according to the state medical examiner.

The home also was fined $250 for neglecting a patient whose leg had to be amputated because of severe bedsores.

And the children of a former resident of Mr. Pierce’s New Bern Rest Home filed a civil suit in April charging that the home failed to prevent a retarded resident from sexually molesting their 84-year-old mother.

Inspectors rebuked

Despite the suits and fines, Mr. Pierce does not think he has a problem with the quality of care at his homes. He sees his problem as overzealous rest home inspectors operating in a handful of counties, particularly Durham and Pitt.

“I don’t believe that anything short of God Almighty would satisfy those two,” he said. “I think I just got the first fine recommended against me in Forsyth County and I’ve been there 21 years.” {In Durham} Lord God Almighty, every time you turn around there’s a fine.”

Mr. Pierce said he meets the state’s standards, but added that the state payment rate for indigent patients is too low for him to offer top-of-the-line care.

“It’s nice to drive a Cadillac, if you can afford it; but if you can’t, you might have to drive a Toyota,” he said.

Mr. Pierce, 54, said he was insulted by much of the criticism leveled at him because he had devoted much of his life to the rest home industry.

He described his career as a rags-to-riches tale, in which he shunned higher education to seek his fortune and escape his impoverished youth.

The son of a minister, Mr. Pierce moved often as a boy. He was born in Windsor in Eastern North Carolina and graduated from high school in Blowing Rock in the mountains. He now lives in Kernersville, in a house next door to his rest home.

“I attended 13 public schools in 12 years,” a written statement about his life says. “When I wanted to go on my senior class trip to Washington, there wasn’t any money.”

After high school he went to work. “I’ve never been to college a day in my life,” he said.

His first venture was a Tennessee-based chain of finance companies, where he made high-interest loans to those turned away by the banks. But he said an IRS audit and a change in state law put him out of business and he came home to North Carolina in 1970 to start over.

With a loan from his mother-in-law, he started his first rest home and within a few years began buying more.

By 1974, he was the head of the state rest home trade group—a job he still holds. A color portrait of Mr. Pierce hangs in the front lobby of the group’s Raleigh office and some rest home operators refer to the N.C. Association, Long Term Care Facilities, as “Steve Pierce’s group.”

Today, in addition to the 33 rest homes, he also owns two restaurants in Carolina Beach, apartment complexes, a shopping center and part interest in a pharmaceutical supply company. His wife, three sons and one of his two daughters work for him.

“I make very little on the rest home business,” he said. “I have many business interests.”

‘I love old people’

The reason he sticks with it, Mr. Pierce said, “is because I love old people.” He said he has provided a home for many poor elderly who have no place else to go and has paid for funerals for penniless residents.

But Flora McGee, the former activities director at Heritage Care in Durham, said in an interview that the quality of life for the elderly there dropped dramatically when Mr. Pierce took over in 1989.

“It shouldn’t be too much to ask that people have good food to eat and be kept clean,” she said. “It just broke my heart to see people like that.”

Ms. McGee had two sisters in the home, but she left her job in 1990 after she grew frustrated trying to improve conditions there, she said.

According to attorneys handling the suit against Mr. Pierce in Durham, Ms. McGee was seeing the results of Mr. Pierce’s tight budgeting practices.

The lawsuit charges that he uses an incentive system with managers that encourages them to skimp on patient services to keep their own spending down.

Under the system, Mr. Pierce pays quarterly bonuses to managers of homes who keep costs for food and supplies at a minimum. The manager with the lowest costs in the chain also wins a plaque applauding “outstanding management skills.”

He also offers monthly $300 bonuses to managers of fully occupied homes. About 13 percent of the rest home beds in the state are vacant.

Because managers have an incentive to keep beds full but costs low, “the pressure comes from both sides,” said Robert B. Glenn Jr., the lead attorney in the Durham suit.

Leida Lewis of Greenville said in an interview that her aunt was well treated in a local rest home until Mr. Pierce bought it in 1989.

“When she first went in, it was absolutely gorgeous,” she said. “The place was sold, Steve Pierce ended up with it and it went downhill—the food, the service, everything.”

Ms. Lewis, 72, thinks that her aunt, who lived in Heritage Care of Greenville until her death last year, should have been moved to a nursing home after a 1990 hospitalization for pneumonia.

But the rest home assured her doctors that they could care for her needs, including continuous oxygen, according to the records of the county’s investigation of the case.

Ms. Lewis said she alerted county inspectors in May that her aunt was not getting her oxygen, had no call bell or bedside commode and was not getting her meals in her room—all against doctor’s orders.

Ms. Lewis then tried to place her aunt in a nursing home, but found all of the area homes full.

By the end of June, her aunt was sent to the emergency room with pneumonia and doctors there found an infected gash on her leg. This time, the hospital contacted the county, alleging that the woman had been neglected at the home.

Her aunt died one month later in the hospital. In April, the state fined the home $250 for failing to follow doctor’s orders in caring for the woman.

“I’m not saying the home caused her death,” Ms. Lewis said. “She was deteriorating. But she was neglected and her last days could have been better.”

Pierce’s holdings

Rest homes owned by Steve and Mary Lou Pierce:

Branchwood Home for the Aged, 43 beds, Reidsville

Broman’s Rest Home, 62 beds, Newport

Carolina Rest Home, 40 beds, Roanoke Rapids

Caremore Life Center, 80 beds, Wade

Carteret Care, 60 beds, Morehead City

The Cary Rest Home, 80 beds

Christian Care Center of New Bern, 64 beds

Christian Care Center of Winston-Salem, 83 beds

Colonial Rest Home, 60 beds, Smithfield

Colonial Rest Home No. 2, 79 beds, Smithfield

Country Club Prime Time Retirement Village, 64 beds, Raleigh

Fremont Rest Center, 50 beds, Fremont

Fremont Rest Villas, 24 beds, Fremont

Glen Haven Center of Care, 98 beds, Sparta

Grifton Rest Home, 80 beds, Grifton

Heritage Care of Clinton, 60 beds

Heritage Care of Conover, 60 beds

Heritage Care of Elizabeth City, 60 beds

Heritage Care of Elkin, 60 beds

Heritage Care of Greenville, 60 beds

Heritage Care of Seven Lakes, 59 beds, West End

Heritage Meadows, Oxford, 80 beds

Heritage Retirement Center of Graham, 125 beds

Heritage Retirement Center of Rocky Mount, 126 beds

Heritage Retirement Center of Wilson, 142 beds

Hunter Hills Retirement Village, 60 beds, Rocky Mount

Jacksonville Christian Care, 80 beds, Jacksonville

Kannapolis Village Long Term Care Facility, 60 beds

New Bern Rest Home, 120 beds

Nielsen’s Rest Home, 60 beds, Carolina Beach

Pinecrest Manor, 128 beds, Henderson

Pinewood Manor Rest Home, 100 beds, Ahoskie

Tri-City Haven Rest Home, 80 beds, Kernersville


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