Private Investors Criticized for Profiteering From Frail Elders, Will Buy More Nursing Homes

Manor Care, one of the nation's largest companies in the long-term care field, with more than 500 nursing homes and assisted-living centers, has just agreed to be acquired by the Carlyle Group a private investment firm for $6.3 billion.

Representatives of the Service Employees International Union nationally, including those with SEIU Healthcare Pennsylvania, have questioned the effect the transaction could have on the quality of Manor Care's facilities, according to an article in today's Pittsburg Post-Gazette. (http://www.post-gazette.com/pg/07281/823784-114.stm) The union cited a recent examination by The New York Times describing cutbacks in staffing and care at other nursing home chains acquired by private investors.

A front page article in New York Sunday Times in September (See my September 24 post in this blog) reports that prominent private equity firms including the Carlyle Group, have bought or agreed to acquire thousands of US nursing homes in recent years.“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.”

If you read my September 24 post you'll recall that despite their blatant exploitation of poor and frail older Americans, a spokesman for one of the investments firms cited in the Times article was quoted as saying "We should be recognized for supporting this industry when almost everyone else was running away.”