Senator Grassley should know about this, and I’ll send him the link to this editorial.

Register reporter Clark Kauffman’s story on nursing-home fines included information that should be of interest to Sen. Charles Grassley: Some nonprofit nursing homes operating in Iowa are paying high CEO salaries and big bucks to board members while enjoying exemption from taxes.

Grassley has a reputation as a nonprofit cop. He appreciates the work the organizations do, but expects them to be honest and reasonable. He has investigated or questioned several nonprofits, including the Red Cross, the Nature Conservancy and televangelists. He has asked hospitals to justify their tax-exempt status.

Now at least a few “charity” nursing homes right here in Iowa deserve his attention — because something is wrong.

Care Initiatives of West Des Moines, which owns 47 centers in Iowa, compensated its chief executive $2.1 million in 2006. Its chief financial officer earned $1.5 million, and board members were paid up to $412 per hour.

Grassley’s eyebrows might be raised even higher at the fact that this charity owns a for-profit insurance company (which insures only the company’s care centers) in the Turks and Caicos Islands, an offshore tax haven.

Similarly, a South Dakota charity with $1.2 billion in assets and 21 nursing homes in Iowa owns a for-profit insurance company in the Cayman Islands because it is the “best fit” for the company, according to a spokesperson.

Because these charities receive tax exemptions, members of the public must pay more.

Grassley should investigate these nursing homes to determine whether tax-exempt status is justified, given the high salaries for executives and payments to board members.

The Manor Care/Carlyle buyout has been completed.

Just when it seemed Carlyle Group’s attempt to buy Manor Care would stretch into the new year, the private-equity company announced Friday that it closed its $6.3 billion purchase of the nation’s largest nursing home chain.

The hard-fought buyout was completed even with a credit market in turmoil, a tenacious and influential labor union opposing the deal, and concerns on Capitol Hill over private-equity firms purchasing nursing homes. To overcome worries about the deal’s impact on quality of care, Carlyle offered repeated assurances that it would provide adequate staffing and resources to the chain.

Under the deal, Manor Care, which operates 500 nursing and assisted living facilities in 32 states, will be added to a wide-ranging Carlyle portfolio that includes Hertz rental cars and Dunkin’ Donuts. In return, shareholders of Manor Care will receive $67 in cash for each share of stock.

Even down to the wire, the deal faced opposition. In West Virginia, where Manor Care operates some homes, health authorities imposed a stay that was delaying the transaction, but the order was lifted on Thursday. That same day, the Service International Employees Union got a circuit judge in Ingham County, Mich., to issue a temporary restraining order that would stall the transfer of licenses of the state’s Manor Care facilities to Carlyle. Less than 24 hours later, Manor Care’s lawyers got that temporary restraining order overturned and the licenses transferred — the last piece of the puzzle needed to complete the deal.

The wonderful thing about the Internet is that many people from different parts of the country, the world, can come together and share news, gossip, information. Specific to this, we’re in contact with many nurses and aides who work for the various Manor Care managed facilities all over the US; we will be watching and sharing pertinent info as it becomes known. Staff cuts, supply cuts and the like will be reported on. From what I can see, we have contacts in every state a Manor Care facility is located in, so we have good representation.

Highlights from the Democrat candidates plans for LTC, specifically nursing homes:

From John Edwards:

Living With Dignity

9. OFFER CHOICE IN LONG-TERM CARE:

Our long-term care system is poorly equipped to give independence to older Americans and forces many families to juggle elder care, child care, and their jobs or spend themselves into poverty to pay for nursing homes. Edwards will reform Medicaid and Medicare to let people to choose home-based care in their communities and test innovations such as asset and income protection programs. He will also support states and communities offering much-needed and often less expensive alternatives – like adult day care and senior villages – that allow seniors to live at home with their loved ones.

10. IMPROVE NURSING HOMES AND CRACK DOWN ON ELDER ABUSE:

Independence is the goal, but we also need to strengthen quality and safety protection in nursing homes. Edwards will establish national standards for nursing home care, increase national enforcement against abusive nursing home chains, expand inspections and increase penalties for homes that fail to provide decent care. He will also help improve quality of care with measures like reducing patient-staff ratios and improving care provider training.

From Senator Clinton’s web site- a more detailed explanation and how Hillary intends to finance her plan:

Protecting our Seniors By Improving the Quality of Our Nursing Homes

While the majority of the nation’s nursing homes provide quality care to their residents, when persistent quality violations go unaddressed and when our seniors are subjected to unconscionable neglect, it erodes confidence in the system and makes it more difficult for all operators to function effectively. And sadly, the problem of poor nursing home quality extends far beyond the list of 54 under-performing nursing homes that the Centers for Medicare and Medicaid Services has recently released. In 2006, nearly one in every five nursing homes that received federal funds was cited for serious deficiencies in care. And from 2000-2005, nearly half of the 63 nursing homes that regulators had identified as having an established history of serious medical deficiencies continued to repeatedly fail federal requirements and still receive federal funds.

These severe, and often long-standing, quality violations are more than a regulatory problem. They offend our solemn commitment to ensure that seniors live in dignity and security. Our seniors deserve better. That is why Hillary will take aggressive steps to improve quality in our nation’s long-term care facilities by:

* Tripling Federal Support for Nursing Home Ombudsmen Programs to Protect Consumers of Long-Term Care: Effective ombudsmen programs are crucial to combating fraud and abuse in the long-term care industry. Ombudsmen are on-the-ground and act solely on behalf of nursing home residents to monitor quality: identifying and investigating complaints, providing information, monitoring regulations and participating in resident advocacy organizations. However, ombudsmen programs such as Iowa’s are struggling to meet the many new challenges that nursing home residents face. Currently, the Iowa program ranks last among the 50 states in the number of ombudsmen per nursing home facility beds. Yet while Iowa has been making progress in strengthening its ombudsman program, the office still faces many new challenges. As President, Hillary would triple federal support for state ombudsman programs to $50 million per year. The increased resources will strengthen the capacity of ombudsmen to vigorously investigate complaints and offer new training programs on emerging issues like complex insurance fraud and the purchase of nursing homes by private equity firms.

* Directing the Department of Justice and the Federal Trade Commission to Assist State Consumer Advocates and Prosecutors to Tackle New Challenges to Long-term Care: For the past year, Hillary has been raising concerns about the new regulatory challenges that we face in long-term care. Earlier this year, Hillary called for the Government Accountability Office to investigate the unconscionable mistreatment of seniors who have purchased long-term care insurance by their insurance providers—many of whom were systematically denying benefits while forcing steep premium increases. And in October, Hillary called for an investigation into whether nursing homes with new hybrid ownership structures—created in many instances by private investment groups—were evading regulators for quality violations and sub-par standards. As President, Hillary will direct the Department of Justice and the Federal Trade Commission to lend their consumer protection prosecution expertise to state regulators who are struggling to tackle these new and complex challenges. State regulators need sufficient information and sophisticated tools to effectively police nursing homes and insurance carriers, and as President, Hillary will ensure they have the support they need.

* Reversing CMS’ Inexcusable Policy and Giving Seniors Full Access to Usable Data on Nursing Homes, including Data on Nursing Home Ownership Structures: Choosing a nursing home is one of the most important life decisions a senior and their family makes. When seniors and their families are empowered with information, they become not only effective consumers but effective regulators in the nursing home marketplace. But the federal government needs to do far more to ensure that seniors and their families have the information they need to make informed choices. As President, Hillary will direct CMS to release all information on the designations it makes about the quality of nursing home facilities. CMS’s unwillingness to freely and openly share its full list of 128 under performing nursing homes is inexcusable, and must be reversed. Hillary will direct CMS to provide on the Nursing Home Compare website accurate, up-to-date data on nursing home staffing levels; the full—not just abridged—reports from inspections and complaint investigations; and any and all information about repeat offenses that CMS compiles. Finally, CMS should compile and post clear information about the ownership structures of long-term care facilities–so seniors can know who is in charge of the facilities they live in.

* Strengthening our nursing and direct care workforce with a national system of background checks for long-term care workers and a $125 million in Workforce Improvement Grants: While thousands of long-term care professionals provide admirable care to our elderly every day, abuse and neglect of our seniors in long-term care is on the rise. As President, Hillary will combat this abuse with a nationwide system of state criminal background checks for long-term care workers. In addition to ensuring our long-term care workers are qualified, Hillary will also ensure that we have a strong well-trained long-term care workforce. She will invest an additional $125 million per year to improve recruitment and retention of health and direct-service professionals and provide greater consumer choice. The new investment will: 1) provide grants to states to adopt and expand successful organizational models for workforce tracking and coordination, including the development of worker registries through a new directed spending program; 2) make federal funding available to states, in partnership with local organizations, to develop a credentialing programs for direct support professionals (where as a condition of receipt of grants, states must collaborate with state universities and community colleges to allow credentialing program to count as college credit); 3) provide grants to states to encourage the expansion of successful agency models of care that give seniors and individuals more direct control over the services they receive and the people that provide them.

The Democrat presidential candidates have come together for form an alliance, of sorts, that will deal with the needs of seniors and long term care.

Democrats Have a Plan for the “Invisible Army of Caregivers”

Senator Hillary Clinton released her awaited ”Long-Term Care Agenda” this past week, joining her fellow lead democratic candidates Barack Obama and John Edwards with a plan for how to deal with the rising needs of seniors and caregivers around the country.

The top three democratic candidates have brought the issue of eldercare in America to the forefront of their campaigns, hoping to tap into the millions of caregivers throughout the country. With a flair for the dramatic, the democratic candidates have touted their first-hand experience and each packaged their plans with key phrases like “Invisible Army of Caregivers,” elder abuse, improved nursing, lenders, tax-credits, and of course fancy titles to grab attention.

Obama’s “Fulling our Covenant with Seniors” and Edwards’ “Declaration of Independence for Older Americans” both have titles that have a slight resemblance to advertising campaigns of the 1960’s for tonic water that would cure all illness, but with all the flair and fuss, do these plans have the meat to make the powerful impact needed in this growing and costly issue of eldercare?

Hillary’s Plan can be found HERE.

Obama’s Plan is HERE.

And John Edwards Plan is HERE.

Hat tip to LTC Reform Blog.

Manor Care is complaining, already, about the loss of profit in West Virginia.

The nation’s largest nursing home chain wants the state Health Care Authority to give immediate approval to the sale of the company’s seven West Virginia facilities to a private equity firm.

HCR Manor Care executives say the nursing home chain’s shareholders — including the West Virginia pension fund — are losing more than $1 million every day the deal is delayed. The West Virginia Investment Board, which manages state pension plans, holds about 161,000 shares of Manor Care stock.

We see here that states invest in these groups- probably without really knowing the effects of the deal upon resident care.

And we see the return of investment is high: A million bucks off of frail residents who need better staffing and better care, but won’t get that simply because it’s not cost effective. A million bucks a day.

In PA, the Manor Care deal has been approved.

NEW YORK (Reuters) - Manor Care Inc (HCR.N: Quote, Profile, Research) has received approval from the Pennsylvania Department of Health for its proposed $6.3 billion sale to private equity firm Carlyle Group CYL.UL, Manor Care said in a statement on Monday.

If I were a partner in the Manor Care leader team, I would be fighting back allegations of poor care, budget cutting extreme charges; I would be putting word out there of the good services offered; I would show examples of all the high performing facilities. I would share the improvements made to nursing homes. I would offer up a list of ALL CMS data on the nursing homes managed by Manor Care- so that people can decide for themselves whether this deal is good or bad. In other words, I would justify the 1 million a day profit by showing what it does, quality care wise, to the frail and elderly folks being served.

This past Thursday hearings were held at Capitol Hill regarding ownership transparency and nursing homes.

At two Capitol Hill hearings yesterday, legislators highlighted the need for greater transparency in nursing-home operations and called for a government probe into the quality of care given at facilities owned by private-equity firms.

Experts presented studies that showed more incidents at private-equity-owned chains and lower staffing ratios compared to nonprofit and publicly owned facilities.

The hearings come as the Carlyle Group winds up its $6.3 billion takeover this month of Manor Care, the nation’s largest nursing home chain. The takeover has been challenged by some long-term-care advocates and a labor union trying to organize the Toledo company’s 60,000 employees.

Rep. Pete Stark (D-Calif.), chairman of the House Ways and Means subcommittee on health, called for the Government Accountability Office to look into the ownership structures of nursing homes and how they affect transparency, staffing levels and quality of care.

“I am concerned about quality issues and lack of accountability, particularly as more and more beneficiaries are now living in private-equity-owned homes. While we must not prejudge anything, these changes provide ample reason for us to reinitiate closer oversight of this industry to make sure that interests of beneficiaries are protected,” Stark said at the hearing.

Aren’t we all concerned?

The other hearing:

Kerry N. Weems, the acting administrator of the Centers for Medicare and Medicaid Services, which regulates nursing homes, offered several initiatives to improve oversight. His suggestions included releasing the so-called special focus facility list, which identifies homes that regulators consider among the nation’s worst. That list, which will be released Dec. 1, has not been public.

Mr. Weems also announced that his agency was developing a system to identify any person or company that owned more than 5 percent of a nursing home. But similar systems in some state have been easily sidestepped by investment companies hoping to obscure ownership through complicated corporate structures.
[…]
Lawmakers also discussed requiring nursing homes to have insurance or bonds to pay fines or court verdicts. Some owners have escaped such payments by leaving homes undercapitalized or by removing profit through complex transactions.

In defending the industry, a nursing home executive said that some information should remain confidential and that companies were committed to providing quality care.

“Nursing home providers are transparent in the disclosure of quality data, but there are those who take the information and use it against us,” said Steve Biondi, speaking on behalf of the American Health Care Association, a nursing home trade group. “We concur with all here today that there is far more to accomplish. But we must do so together.”

Mr. Biondi said the company he works for, Extendicare, has about five sites on the “special focus facility” list.

The hearings also provided a forum for competing studies that evaluate nursing homes owned by private investment groups.

It’s sad that they even call this the “nursing home industry” when one thinks about it. It should not be an industrious business; it should be humane.

An article that tries to have a look at both sides of the Manor Care/Carlyle buyout debacle.

It’s hard to know who to trust in the latest tussle over a private equity company going billions into debt to buy a nursing home chain. With nursing homes, it’s probably best to trust no one. If you’ve been in one lately, as a visitor, worker or patient, you know what I mean.

Like most people, I find it hard to trust the corporate giants that seem determined to treat nursing homes as commodities. In this dispute, Goliath is the Carlyle Group, which owns Dunkin’ Donuts and Hertz and promises to deliver a quality nursing home product.

Interesting perspective; make sure you read it all.

Florida state representative Pete Nehr has penned an op/ed that is very timely.

Part of it:

As an elected state representative, one of my most important duties is to provide for the safety of my constituents. As you read this, the largest nursing home chain in the United States, HCR Manor Care, is being purchased by the Carlyle Group, a private equity firm that owns Dunkin’ Donuts, Baskin Robbins and Hertz Rental Cars. The details of this acquisition are particularly worrisome. Carlyle will pay for the company by loading it down with $5.5-billion in debt. To pay back this debt, Manor Care will have strong incentives to do what 60 percent of other nursing homes purchased by private investment firms have done: cut costs by significantly reducing staffing, sometimes below federally recommended levels, and cutting other budget items at the expense of patient care.

At the same time, Manor Care’s executives will be making up to $250-million in this deal and the Carlyle Group stands to make up to $60-million.

He’s written much more so make sure you check it.

In South Dakota state legislators are considering using the state pay model for it’s nursing homes and training centers.

PIERRE - Turnover caused by low pay is creating what one lawmaker called a “looming crisis” in staffing South Dakota’s nursing homes and adjustment training centers.

The Legislature’s Appropriations Committee recently discussed - without taking action - a possible pilot program to use a state-employee style of pay for direct-care workers in nursing homes and training centers, which work with people with disabilities.

Such a plan could cost millions of dollars from the state treasury. Without action, a center or nursing home might close, throwing the burden of care for its residents or clients onto the state, some lawmakers fear.

Sen. Jerry Apa, R-Lead, said some reports show turnover rates of 48.5 percent for some direct-support staff.

“The fact of the matter is, we have a looming crisis here, and if we don’t get a hold of it and address it, one of the ATCs is going to close,” Apa said, according to audio minutes of the meeting.

Rep. Jim Putnam, R-Armour, who helps lead the Joint Appropriations Committee with Apa, also anticipates a growing problem unless change is made.

“I don’t think anyone in the state wants to have a nursing home or an ATC or any of the other folks that care for people close up,” Putnam said. “I don’t know that’s a problem at the moment, but it certainly could be one on the horizon.”

Read the rest of this article; some interesting stuff!

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.
[…]
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.