December 2018 Magazine

Who Is Michael Morton?

Michael

By Caleb Talley | Photography By Jamison Mosley

The nursing home magnate has a target on his back. But he hasn’t let that get in the way of expanding his empire.

Michael Morton sits back in his chair on the top floor of the building that bears his name, enjoying a breakfast of salted almonds. The red brick structure on Rogers Avenue is one of several renovated or repurposed buildings in Fort Smith’s historic downtown, the gateway to the Old West. And it’s inside this old building, on the westernmost edge of Arkansas, that Morton has established the epicenter of his expanding health care empire.

An Oklahoma native and a Fort Smith resident, Morton’s familiar with the legends of the Old West. And in certain circles, he’s quite the legend himself. Those who have only read about him in newspapers or on blogs would certainly be surprised by his comedic candor and easygoing demeanor. They’d likely be astounded by how little they actually know about the man whose notoriety and fortune started with a help wanted ad.

Morton grew up on the opposite end of the Arkansas River, in Muldrow, Okla., roughly 20 minutes from where he would eventually hang his hat. His father raised cattle and taught vocational agriculture. His mother was a homemaker. Upon graduating high school, Morton decided he would study accounting and political science, hoping to eventually become an attorney. After graduating from Northeastern State University in Tahlequah, Okla., in 1972, he decided to forgo law school.

“I thought I was going to be a lawyer,” Morton says. “But I graduated in three and a half years, so I had an entire semester off. I had to go to work. I was married. I had a child very young. And I read that in Oklahoma, there were more lawyers per capita than any other state. I was doing what everyone else was doing.

“So, I got to reading the newspaper, and there was an ad for an accountant at a company in Sallisaw, Okla., that owned seven nursing homes. I applied for it and got it.”

Morton’s role with the company quickly expanded from accounting to whatever was needed of him, including, in one instance, recovering residents following a catastrophic tornado in 1974. Some could only be identified from the names sewn into the inside of their clothing. “When you’re 24 years old, and you’re seeing things like that, you grow up quick,” he says.

Following the incident, Morton was tasked by his employers with securing the largest low-interest loan available from the Small Business Administration for disaster relief. He got it done. Morton was quickly earning the respect of his superiors and his peers.

“When I started, most of the older people there didn’t want to hear a thing from me,” he says. “By the time I was through, they appreciated all that I’d done. I found that as long as I was helping their operation, they’d respect me. All I had to do was help when they had problems. I was tasked with representing the owners, and that’s what I did.”

Later the same year, Morton would pave his own way in the industry, going into business with friend Doug Stites. Stites loaned Morton half the cost to purchase a nursing home in Booneville, in Logan County. Business was good, and two years later, he built another nursing home in Perry County. He continues to own and operate both facilities.

In 1980, Morton bought two more nursing homes in Hope. “It was logical and methodical growth,” he says.

By 1990, Morton was operating his growing nursing home company from an office in Booneville. It was then that he and Stites, who was operating out of Sallisaw at the time, officially joined forces and set up shop in the old Frisco Train Station of Fort Smith. But tragedy struck in 1998 when Stites was killed in a car accident. Morton paid Stites’s estate for his share of the business, making him the sole proprietor.

In the 20 years since, Morton has watched the industry evolve. “It’s gotten a lot more sophisticated,” he says. And much of that, he says, has to do the payment methodology.

“When Medicare was first enacted in the 1960s, the concept of it was insurance for the elderly,” Morton says. “And in 1965, if you were 65, you were considered to be pretty old. Now they don’t. They figured that when maw and paw hit 65, they’d retire, get a couple of rocking chairs and put them on the front porch. Let them rock a couple of years, and then they die.

“Now, when maw and paw retire, they go down and get an SUV with a bike rack, buy a mountain bike and head on up to Yellowstone. They ride those damn things until they fall and break their hip. They’ll get a total hip replacement, and we’re there to rehabilitate them.

“Used to, if you had a hip replacement, you’d be in the hospital for a month, and the bill would be enormous,” Morton adds. “So, what I’ve done is help them cut down the cost of that. That’s where I make most of my money, providing those Medicare services for people who require different kind of therapies. I’ve geared my nursing homes that way.”

Another significant shift he’s noticed in the industry is the level of expectation from his nursing home residents. Nowadays, he says, patients who enter a nursing home for rehabilitation don’t want to be identified as a nursing home patient. “They don’t want to say, ‘I’m in a nursing home,’” he says. “They want to say, ‘I’m in rehab.’”

READ MORE: Arkansas’ Nursing Homes

And those who do come to a nursing home to stay want better accommodations. “Everyone is more affluent today,” says Morton. “And people want to have private rooms… They want more, and they want better. So, that’s what I give them.

“But with all that has changed,” he says, “some things have stayed true since 1976. If you feed people well, you take care of them, and you keep the house clean, you’ll be successful in the nursing home business.”

Despite his success in the industry – or possibly because of it – Morton works with a target on his back. And he knows it. If you’re making money, he says, you become a target, especially for lawsuits. But he’s not letting it get in the way of his mission to provide quality care to his residents, something that has gained him much respect among his peers.

“I’m convinced it’s the reason I get sued,” he says. “Lawyers don’t sue people who don’t make money. They think if you’re making money, they should try and get it.”
The legal environment, according to Morton, changed dramatically in 1999 with the arrival of Florida law firm Wilkes & McHugh. The firm, he says, was successful in lobbying lawmakers to pass a law that granted special rights to nursing home residents.

“It created causes of action where you could bring all this information from anything that happened in a nursing home and put it in a case,” Morton says. “They want to put all this in front of a jury and show what a nursing home might have done a year ago that didn’t have anything to do with their case at all.”

The firm let loose a number of lawsuits against nursing homes, alleging neglect and wrongful death. One such suit against a nursing home in Mena – not Morton’s – resulted in a $78 million verdict. The Arkansas Supreme Court later reduced the verdict to $26 million, but the damage was already done.

Morton and other business leaders across the state began throwing their money and support behind tort reform efforts to right the ship.

“That [verdict] was the beginning of the end for conventional insurance in Arkansas,” says Morton. “What we’ve done since then is try to do something about tort reform, because it affects us so greatly.”

But when asked about the future of tort reform in Arkansas, following the October decision by the state Supreme Court to remove a tort reform measure, Issue 1, from the November ballot, Morton says he’s all but finished fighting for it.

“Tort reform would help us, but I think it’s a lost cause,” he says. “It might get brought back up. But it’s not going to be brought up by me. And that’s pretty bad. This was lawyers helping lawyers.

“[Issue 1] was from the legislature,” Morton adds. “They’re the ones that represent the people. They represent the people of Arkansas, and the Supreme Court says we don’t care who you represent… I may be wrong. They may be right. But I’m not going to mess with it anymore.”

Michael

Michael Morton sits in front of a painting given to him as a gift. To him, he says the painting represents a willingness to get the job done. For his company and his colleagues, he’ll move any boulder in his way.

But Morton’s unwillingness to return to the trenches for another tort reform effort is not likely to keep him from keeping a close eye on Arkansas’ political landscape. Over the last 20 years, the nursing home magnate has been generous with candidates across the states, having given hundreds of thousands of dollars to various campaigns.

Records show that his contributions have been nearly equal for both Republicans and Democrats. According to the National Institute on Money in Politics, an organization that tracks political donation information provided by the Secretary of State’s office, Morton has donated more than $356,000 to Republican candidates and more than $340,000 to Democratic candidates in Arkansas.

“People condemn you for being involved in politics,” he says. “But at the same time, if you don’t, they say you’re stupid or lost. I think we enjoy a good relationship with the legislature… People condemn our association and me for being active in politics. But I’ve got news for them: I’m not going to quit.”

But there’s one contribution and one lawsuit that continues to plague Morton to this day.

In early 2013, a Greenbrier nursing home owned by Morton was sued for the 2008 death of one of its patients. A jury awarded the plaintiffs with a $5.3 million verdict. That verdict was later reduced to $1 million by then-Judge Mike Maggio. That summer, Maggio announced his candidacy for the state Court of Appeals. Morton was among his campaign contributors.

Maggio would later say that the contribution influenced his decision to reduce the verdict. He pleaded guilty to accepting a bribe and was sentenced to 10 years in federal prison.

Morton admits that the timing to the contribution looked bad, but denies any effort to influence the judge’s decision. Because of a divided corporate structure, Morton says he had already protected himself from what he knew would likely be a steep verdict and had a plan in place when the initial verdict was announced.

“They were suing a company that only owned the building and the computers in it,” says Morton. “And they knew that. The attorney who sued me said after the verdict that he wouldn’t see a dime of it. Because we had already discussed what we were going to do, I had to hire a new attorney, because I knew my attorney would be asked to testify for me.”

The scandal was amplified in the media, Morton says, at the request of the attorneys for the plaintiff. He was portrayed as a villain. In reality, he’s nothing of the sort.

“All these articles from newspapers get all their information from the plaintiff attorneys,” he says. “About 80 percent of their information comes from an attorney who wants it written that way. That’s how that goes. And the reporters have to do that because they won’t get any good information from them later on, when they do have good information.”

Morton has never met or spoken with Maggio. He jokes about dodging him in a Conway Kroger, recognizing only from pictures in the media. Maggio now says he was wrong in making his plea. He recently petitioned for release from prison, citing ineffective counsel from his attorney, who he says misled him and pressured him to plead guilty.

And though Morton has been cleared of any wrongdoing, the scandal continues to be a thorn in his side. But he hasn’t let that get in the way of his goals to expand and invest in his homes, providing exceptional care for Arkansas’ aging population.

“When the legal ordeal was going down, a lady wrote a letter to the Arkansas Democrat-Gazette, concerned about my money,” he says. She said, ‘Does anybody check to see what Michael Morton does with his money? He must have so much for him to spend money on all these politicians.’ That amazed me. If I charged too much for care, people would go elsewhere.

“Two days later, someone wrote a response to it. She wrote, saying, ‘If you want to find out what Michael Morton does with his money, just go to one of his nursing homes. You’ll see what he does with it.’

Michael

Despite how he’s been characterized in the media, Morton is beloved by his peers and more than willing to share his time and his story with anyone who will listen.

And Morton challenges anyone with concerns to visit his facilities, which he says are among the best in the state. His campaign contributions, too, he says are made in earnest to improve the quality of care for his residents.

“It makes it better for the residents of my nursing homes,” Morton says of his political involvement. “I’ll admit, it makes it better for me as a business person, too. But most of all, it makes it better for my residents. That’s what this is all geared towards.

“Some people do take advantage of that,” he adds. “I can’t help that, and I wish they wouldn’t.”

Morton, who’s nearly 70 years old, is just hitting his stride. He recently founded a separate company, called Quest, to provide transportation for his patients and launched a pharmacy to service his nursing homes. He’s finishing new nursing home facilities in Broken Arrow, Okla., and Conway and has plans to build in Johnson, Rogers, Sebastian County and Saline County. Morton’s also adding assisted living facilities to his list of more than 30 nursing homes. And little is said of the hundreds of thosands of dollars he donates to schools, including KIPP Delta.

There’s no slowing down for Morton. He says with a grin, “I don’t know what else I’d be doing.”

READ MORE: Nursing Homes By Owner

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