Private Capital Groups Buying Up Nursing Homes, Reducing Care
The New York Times has a long expose today on how private capital groups are buying up the large chains of nursing home and cutting staff and care. If you have a loved one in a nursing, you should read it. It's very frightenting. First, what the Times did:
The Times examined more than 1,200 nursing homes purchased by large private investment groups since 2000, and more than 14,000 other homes. The analysis compared investor-owned homes against national averages in multiple categories, including complaints received by regulators, health and safety violations cited by regulators, fines levied by state and federal authorities, the performance of homes as reported in a national database known as the Minimum Data Set Repository and the performance of homes as reported in the Online Survey, Certification and Reporting database.
What it found:
As such investors have acquired nursing homes, they have often reduced costs, increased profits and quickly resold facilities for significant gains. But by many regulatory benchmarks, residents at those nursing homes are worse off, on average, than they were under previous owners, according to an analysis by The New York Times of data collected by government agencies from 2000 to 2006.
....The typical nursing home acquired by a large investment company before 2006 scored worse than national rates in 12 of 14 indicators that regulators use to track ailments of long-term residents. Those ailments include bedsores and easily preventable infections, as well as the need to be restrained. Before they were acquired by private investors, many of those homes scored at or above national averages in similar measurements.
The Times found that after the acquisitions, the nursing homes cut expenses and staff, "sometimes below minimum legal requirements."
Regulators say residents at these homes have suffered. At facilities owned by private investment firms, residents on average have fared more poorly than occupants of other homes in common problems like depression, loss of mobility and loss of ability to dress and bathe themselves, according to data collected by the Centers for Medicare and Medicaid Services.
Because of the way the deals are structured, it's difficult to determine the actual investors and to sue, and almost impossible to win a suit when brought.
private investment companies have made it very difficult for plaintiffs to succeed in court and for regulators to levy chainwide fines by creating complex corporate structures that obscure who controls their nursing homes.
By contrast, publicly owned nursing home chains are essentially required to disclose who controls their facilities in securities filings and other regulatory documents.
On Wednesday, the the Service Employees International Union held a protest of Carlyle's takeover of Manor Care.
The SEIU, which wants to organize Manor Care's 60,000 health-care workers, expressed concern that the $6.3 billion buyout could lead to layoffs and cuts in benefits for employees, and to a reduction in the quality of care for patients. The union has also begun an initiative to draw attention to what it calls the growing concentration of wealth in a few private-equity companies such as Carlyle.
Manor Care is huge.
Manor Care, which traces its roots to a single nursing home in Wheaton 48 years ago, has grown into one of the largest providers of long-term care and services in the country, with more than 500 facilities under the Heartland, ManorCare Health Services and Arden Courts brands.
It employs 60,000 workers.
On the subject of "the growing concentration of wealth in a few private-equity companies such as Carlyle", Carlyle announced this week it had sold a 7.5% stake in its company to an investment company named Mubadala Development Company in Abu Dhabi, the capital of the United Arab Emirates.
Those protesting the buy-out are calling on Carlyle to:
1. Ensure that its nursing homes are in compliance with federal minimum resident care regulations at all times.
2. Ensure that its nursing homes are staffed at levels recommended by the Federal Government.
3. Disclose the impact of its Manor Care buyout to the nursing home residents, workers and taxpayers in each state.
4. Structure its buyout so that Manor Care staff has a role in the reorganization and benefit from its outcome.5. Create a Quality Care Fund and a new advisory committee comprised of Manor Care staff, resident advocacy groups and other stakeholders to improve patient care in all Manor Care homes.
Why am I writing about this? Because the care of the elderly is a huge social justice issue. Elder abuse is a crime. It hits particularly close to home for me because as I've mentioned a few times on TalkLeft, the TL mom resides in a "skilled nursing facility." It happens to be a Manor Care facility.
So, I'll be following this and future articles on changing conditions at nursing homes around the country following buyouts by private equity companies, and in particular, the Carlyle takeover of Manor Care.
I also want to know what provisions the Democratic candidates are making for the elderly in their new health care plans.
Nursing homes costs are exhorbitant ($6,000 a month and more is common for room and board) and Medicare doesn't cover it except for 100 days following release from a hospital. While private medical insurance helps with the associated costs (prescriptions, doctor visits, etc.) it doesn't pay for the room and board.
As boomers age, the number of Americans needing assisted living and nursing home care is going to exponentially increase.
These capital groups buy the nursing homes for one reason: profit. Who has the authority to investigate and hold them accountable if they slide on care? Stay tuned.
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