Congress to investigate nursing homes owned by private investment groups
Last week two congressional committees announced that they intend to investigate nursing homes which are privately owned by investment firms and review their business practices. Private equity firms are known for reducing the quality of nursing home care by cutting costs and reducing the number of employees. In addition, because of the complex corporate structures used by many of these firms to avoid liability, concerns have been expressed that residents may be losing their ability to use nursing home lawsuits to hold ownership groups accountable for decisions which result in poor care.
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An article published last month in the New York Times reported that nursing homes purchased by private investment firms usually perform worse than other facilities. In an effort to increase profits, they often provide care which falls below the minimum legal requirements. Times reporters found that privately acquired nursing homes ranked below the national standard in 12 of 14 qualifying areas and many of these facilities were above the national average before being acquired by the investors.
Concerns have grown nationwide since the recent announcement that the Carlyle Group intends spend $6.3 billion to acquire HCR Manor Care, the largest nursing home chain in the United States. Over the past few years, private investment firms have purchased 6 of the 10 biggest nursing home chains and now account for roughly 10% of the care provided to elderly in nursing homes throughout the United States.
Since it was announced that Carlyle Group intends to acquire Manor Care, the company has sent letters to state regulators, nursing home residents and their families criticizing the New York Times article and claiming that they do not intend to make large changes. However, a second New York Times article last week indicates that documents filed with Maryland State regulators suggest that Manor Care will be divided so that each facility is a different entity. They also indicate that the operation of the nursing homes will be separated from the ownership of certain property and assets.
Similar structures have been used by other private investment groups to avoid liability when injuries are caused by substandard care. Convoluted business structures which separate assets from operations protect the investment group from substantial losses when their negligent care results in an injury. The investors who decide to cut budgets and provide substandard levels of care are often insulated from liability and can not be held accountable for their actions.
A nursing home’s failure to provide the proper level of care can cause devastating injuries for the residents. Low staffing levels, poorly maintained equipment and insufficient supplies may increase profits, but they can also result in bedsores, dehydration, falls and other injuries caused by nursing home neglect.
In addition to providing compensation for injuries suffered by a resident, nursing home lawsuits are often pursued to hold the facility accountable and make certain that proper standards of care are maintained. Private investment firms are not only placing profits before the health of their residents, but also attempt to avoid responsibility for their actions.
Although the scope of the congressional investigation of nursing home ownership has not been established, committee representatives indicate that hearings and proposed legislation will likely be involved. The congressional inquiries will hopefully lead to fundamental changes in the way nursing homes are owned and managed. The federal government pays for a large portion of the nations nursing home care, and they have the power to demand that ownership be properly defined to ensure liability and accountability.
NURSING HOME LAWYERS
The nursing home lawyers at Saiontz & Kirk, P.A. review potential lawsuits on behalf of residents who are injured by poor care nationwide. If you or a loved one suffered an injury in a nursing home which could have been prevented if the proper standards of care had been followed, request a free consultation and claim evaluation.
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