SEIU urges Congress to improve quality, hold private equity firms accountable for their ownership of nursing homes

WASHINGTON, D.C.-Concerned that the trend toward private equity ownership of nursing homes is diverting taxpayer money to enriching top executives and buyout firms at the expense of quality care, the nation's largest healthcare workers union is calling on Congress to take action to improve the quality of care, and hold private equity firms accountable for their ownership of nursing homes.

Citing a recent New York Times investigation, the experience of nursing home caregivers and concern over the pending buyout by the Carlyle Group of the nation's largest nursing home provider HCR Manor Care, SEIU sent letters Friday to the Chairmen of the House Committees on Ways and Means, Energy and Commerce, and Oversight and Government Reform, and to the Chairman and Ranking Member of the Senate Finance Committee. The letters request that each committee hold hearings, exercise its oversight authority, and consider new legislative reforms related to private equity ownership of nursing homes. Copies of the letters are available at www.CarlyleFixManorCareNow.org.

"Medicare and Medicaid resources that are intended to support vulnerable Americans are being diverted to the private benefit of wealthy investors," said SEIU International Secretary-Treasurer Anna Burger in the letters. "Profit for investors cannot come at the price of patient safety and care."

In recent years, large private investment groups have agreed to buy si of the nation's 10 largest nursing home chains, containing over 141,000 beds, or 9 percent of the nation's total. Private investment groups own at least another 60,000 beds at smaller chains and are expected to acquire many more companies as firms come under shareholder pressure to sell, according to the New York Times article by Charles Duhigg, "At Many Homes, More Profits and Less Nursing,"published September 23, 2007.

In addition to holding hearings and considering new legislative reforms, the actions SEIU is asking Congress to take include:
  Requesting that the Inspector General of the Dept. of Health and Human Services conduct a detailed audit of nursing homes bought by private equity firms;
  Requesting a Government Accountability Office (GAO) audit of nursing homes bought by private equity firms and the efforts of the Center for Medicare and Medicaid Services (CMS) to hold them accountable; and
  Requesting that the Medicare Payment Advisory Commission report to Congress on the effect of private equity ownership on nursing home quality measures and costs to the Medicare program overall.

Pending Carlyle Takeover of HCR Manor Care Largest-Ever
With more than 37,000 resident beds, HCR Manor Care is the largest nursing home provider in the country. The $6.3 billion Carlyle takeover deal will result in a windfall of as much as $254 million for top Manor Care executives and directors, including as much as $186 million for Manor Care CEO Paul Ormond.  Carlyle stands to reap fees on a deal that could total hundreds of millions of dollars. Much of the money going to fees and executive compensation is from taxpayers: Manor Care receives approximately two-thirds of its revenue in taxpayer funded payments, such as Medicare and Medicaid.

On September 19, the nation's largest healthcare workers union SEIU launched a nationwide effort calling on Carlyle to put patient care above CEO profits in the Manor Care takeover. For more info, visit www.CarlyleFixManorCareNow.org.

 

"

###