Long term care operator pulls out of Kentucky, cites difficult legal climate

Extendicare Real Estate Investment Trust announced recently  that its wholly owned subsidiary, Extendicare Health Services, Inc. (EHSI) has entered into an agreement to lease all 21 of its skilled nursing centers in Kentucky to a third-party long-term care operator based in Texas. The reason for jumping ship? Kentucky’s increasingly burdensome legal environment.

“EHSI has operated within the State of Kentucky for over 35 years and as such, we did not arrive at this decision easily,” said Tim Lukenda, President and CEO of Extendicare REIT. “However, the combination of a worsening litigation environment and the lack of any likelihood of tort reform in the State of Kentucky has made this the prudent decision for our company and unitholders.”

The Chamber has long supported comprehensive tort reform to make Kentucky’s business climate more competitive, and this past session pushed a bill that would have established a medical review panel process for lawsuits against long term care facilities. The rising costs associated with medical malpractice liability continue to take a significant financial toll on Kentucky’s health care industry, resulting in increased costs for businesses and consumers and contributing to a shortage of medical professionals. EHSI’s exit should serve as a wake-up call for Kentucky lawmakers.