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Two Congressional Committees have agreed to investigate the dealings of Carlyle Group and other private investment firms, and the management practices of nursing homes.

Two Congressional committees announced yesterday that they would investigate business practices at nursing homes owned by private investment groups.

The scope of the inquiries by Representatives John D. Dingell of Michigan, chairman of the Energy and Commerce Committee, and Barney Frank of Massachusetts, head of the Financial Services Committee, are still being determined, but will probably include hearings and proposed legislation, a committee spokeswoman said.

The investigations are the latest scrutiny of private equity investments in nursing homes.

Last week, Senators Max Baucus, Democrat of Montana and chairman of the Finance Committee, and Charles E. Grassley, Republican of Iowa and its ranking minority member, sent letters to five private investment firms seeking information on their ownership and management of nursing home chains. The senators also asked the agency responsible for many payments to nursing homes, the Centers for Medicare and Medicaid Services, about its oversight of such homes.

This month, officials in five states expressed concern about the Carlyle Group’s $6.3 billion acquisition of the nation’s largest nursing home chain, HCR Manor Care. State legislators in Florida, Illinois, Pennsylvania, Michigan and Washington have asked regulators to investigate the acquisition by Carlyle, a private equity giant, or withhold approval pending greater scrutiny.

“There are serious concerns that private equity firms are reducing the care at nursing homes by decreasing the number of employees,” Mr. Dingell said. “We’ve been made aware that nursing home residents are losing their ability to use lawsuits to fight poor care, and that people may be suffering.”

It should never get to the point where I lawsuit is needed; nursing care should come first even over the profit margin. Alas we know better.

Representatives of the Carlyle Group and other private equity firms said their companies intended to cooperate with all inquiries. Carlyle said it was committed to maintaining high standards at the 552 Manor Care facilities after the deal closes, which is expected late this year.
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To counter such criticisms, Manor Care began sending letters to regulators and officials in the 32 states where its facilities are located, pledging to maintain staff levels and other quality standards. The company has also sent letters to residents and their families criticizing the article in The Times and the union’s efforts. The mailings have said that the Carlyle Group does not intend to overhaul Manor Care in ways that make it harder for regulators to trace ownership.

But documents filed with Maryland regulators indicate that Carlyle plans to reorganize Manor Care to make each nursing home a stand-alone company, and to separate ownership of the homes’ real estate and operations. Other private investment groups have used such structures to avoid liability and regulatory scrutiny.

Uh huh…here we go. Already these groups are trying to hide the very people who should be held accountable when poor care results in actual harm or even deaths of residents, all in the name of profits.

The Congressional inquiries and hearings may lead to significant shifts within the nursing home industry.

“When Congress has examined nursing homes in the past, it’s led to fundamental changes,” said David Zimmerman, a professor at the University of Wisconsin and president of the Long Term Care Institute, a nonprofit group. “The government pays for a great deal of nursing home care. If they demand transparency on ownership and liability, they’ll get it. Private equity groups have reasons to be concerned.”

Let’s hope so. Let’s get the profit motive out of the nursing home business and put the caring motive back. These places are bad enough, we don’t need any help from people who have no idea what it is we do…private equity groups should be banned from having anything to do with health care facilities.