Expert: Nursing homes hit by COVID-19 could shield assets from malpractice lawsuits

WHAT: As nursing homes continue to emerge as COVID-19 hot spots, allegations of negligence are likely to increase among residents, their families and advocacy groups. Measures taken by nursing homes to shield their assets, however, could decrease potential settlements resulting from the pandemic, says a Purdue University expert in nursing home operations and management.

WHO: Susan Feng Lu, the Gerald Lyles Rising Star Associate Professor of Management at Purdue University, has studied how nursing homes shield their assets in times of frequent malpractice litigation. Lu says large chains often sell their homes to smaller owners with little or no liability insurance coverage and reduce the frequency of “branding” their homes to obscure connections to larger parent organizations.

Susan Feng Lu. (Courtesy photo) Download image

QUOTE: “When lawyers try to persuade people to sue nursing homes, they need to check whether it’s a big or small company. If it’s a small one, even if you spend a lot of time and effort, you gain very little money in return, but if they know it’s a deeper-pocket chain, they are more likely to sue. That’s why those chain-affiliated firms try to obscure the information that lets people know they are affiliated with each other or hold shares with each other.”

MORE INFORMATION: Lu is an associate professor of supply chain and operations management in the Krannert School of Management.

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Writer: Joseph Paul, paul102@purdue.edu (working remotely but will provide immediate response)

Source: Susan Feng Lu

Note to Journalists: A nursing home stock image and a photograph of the professor are available to journalists via Google Drive.