Michael Amon

Building an empire

Posted in Newsday by michaelamon on November 25, 2009


BY MICHAEL AMON AND RIDGELY OCHS
Sept. 23, 2007 p. A7
Benjamin Landa and Bent Philipson have built the largest nursing home network in the state with good timing, smart business moves and the right contacts.

In 1987, Landa bought his first nursing home – a facility in Far Rockaway – from his late father’s estate. A few years later, as he acquired more nursing homes, he started raising money for political candidates from both major parties. By 1994, he was a top fundraiser for future Gov. George Pataki said Jeffrey Weisenfeld, a former Pataki aide.

Then in 1996, Pataki named Landa to the Public Health Council, a state board with broad powers to approve health care facility projects, including nursing homes. That year, Landa teamed up with Philipson, who was a supervisor in one of his nursing homes.

During Landa’s eight-year tenure on the council, Landa,Philipson or their wives secured the purchase of 20 nursing homes and became the state’s leading players in the nursing home industry. They now run 25 facilities.

“Their approach is new,” said Neil Heyman, president of the Southern New York Association, a trade group of 64 nursing homes. He added that nursing homes in New York historically had been family run businesses. “They are part of a general trend toward giving nursing home organizations corporate names and structures.”

SentosaCare does not own or run the facilities, which have about 80 investors with Landa, Philipson or their spouses as the common denominator. Rather, the company centralizes administrative functions and provides a brand-name marketing tool.

Their strategy is the only way to, in effect, form a nursing home chain in New York state, said health care experts. Legislation passed after Medicaid fraud and patient abuse scandals in the 1970s required all nursing home investors to be vetted by the state. The laws essentially banned publicly-traded nursing home chains because of the impossibility of vetting thousands of investors behind publicly traded companies.

As the group grew, many nursing home owners said Landa’s council position and friendship with Pataki helped his projects.

In 2003, the owners of 15 nursing homes complained to the Health Department about a replacement facility for Landa’s Brookhaven Rehabilitation and Health Care Center in Far Rockaway being pushed ahead of their own languishing construction projects.

“We are mystified and disturbed that Brookhaven’s application might be given expedited treatment over those other worthy providers,” wrote Carl S. Young, president of the New York Association of Homes and Services for the Aging, in a May 21, 2003, letter to the State Hospital Review and Planning Council, which reviews nursing home projects before the Public Health Council. The project has not moved forward.

Landa recused himself from decisions on his projects and said his council post was “irrelevant to my business strategy.”

Landa said the Pataki administration, generally, was “detrimental to my company’s bottom line,” with its insistence on cuts to Medicaid reimbursements. But Landa’s net worth increased from $7 million to $65 million while Pataki was governor, according to documents filed with the state health department.

A Pataki spokesman did not return calls seeking comment.

Landa, 51, and Philipson, 41, made their flurry of nursing home purchases in the late 1990s, just as many older operators were retiring and cashing out, said Richard Herrick, the president of the New York State Health Facilities Association.

Herrick said he had never seen a group of investors in New York buy so many nursing homes so quickly. State health department records indicate that the facilities’ annual revenues are at least $450 million.

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