
(Photo: RebelBlueAngel via Flickr.com)
In December of last year the Carlyle Group, the most powerful private equity firm in the country, acquired 28 nursing homes in Michigan when it purchased large-scale operator HCR Manor.
The purchase drew concern from politicians, health care unions and advocates for the elderly because of a New York Times story that had run three months earlier detailing the harm that had come to patients across the country as investor-driven entities such as Carlyle increased their margins by reducing nurses and supply budgets.
Michigan Messenger published a series of stories on the purchase and the fight to stop it.
On Wednesday — some nine months after the state allowed the purchase to go through in December — the Michigan House, in what is being described as a bipartisan effort, passed a package of eight bills designed to make it easier for patients, their families and government regulators to find out answers and to levy complaints about care in Michigan nursing homes.
Speaking of the legislation, Sarah Slocum, the ombudsman for the Michigan Office of Services to the Aging, who receives queries and complaints from nursing home staff, patients and concerned family members, describes the package passed Wednesday as having teeth. “Not necessarily sharp teeth,” she told Michigan Messenger, “but teeth.”
The bills contain nothing that would undo the sale or ban future ones like it, she says. “It certainly still allows for the purchase of nursing homes by large equity companies, it still allows flipping and it certainly still allows nursing homes to be run for profit. None of that would change under the bills.”
Effort to raise accountability, create transparency, offer voice to citizens
But the legislation would, she explains, grant citizens the ability to speak at a public hearing before any such purchases were approved in the future by state regulators.
Slocum explained: “If I had an aunt in a nursing home in Ohio whose home was purchased by Company X and my aunt had a terrible experience after that purchase, and if Company X wanted to buy a nursing home my mother was in here in Michigan, then I would have a chance to raise that concern [to regulators] before the purchase had final approval.”
The bills, if passed by the Michigan Senate and signed by Gov. Jennifer Granholm, would also make it easier for families and authorities to know whom to contact as the responsible party for any given nursing home.
As state Rep. Kathy Angerer, chair of the House Health Policy Committee, explained to Michigan Messenger in February, the true direct ownership of nursing homes is often hard to pin down.
“Right now the owners of long-term nursing care facilities are nameless and faceless. The building is owned by one entity, the property by another, the staffing comes from a service, the food service comes from another company. And when a patient’s family has a concern they don’t know who to go to.”
In direct response to that very problem, one of the bills passed would “require nursing homes to conspicuously post the names and contact information of their owners and key management staff.”
How things have been at Michigan’s 28 Carlyle Group owned homes since the purchase
We asked Slocum for her assessment on the level of care at the formerly Manor Care nursing homes, since purchased and run, if indirectly, by the Carlyle Group.
“There hasn’t been a dramatic shift [in the quality], but I do know of some families and at least one staff person who called and said that since last fall there has been a reduction in staffing and a reduction in resources. I think things have not gotten hugely worse [due] in great part to the publicity it’s received and residents are benefiting from that publicity and scrutiny. And there is certainly no evidence of things getting better [under Carlyle Group ownership].”
This effort at regulation now makes its way to the Republican-controlled Senate, where free market philosophies frown on government intervention in business.
When asked about the conventional wisdom among stakeholders such as herself about the package’s chances in the Senate, Slocum said, “There are people worried about that, but I’m very hopeful. We have to make sure they understand what these bills would do for the [nursing home] residents in their districts.”
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