Dec 7, 2018
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Private Equity Firms Operating Nursing Homes is a Bad Idea

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Charles P. Pierce, a writer for Esquire, explores what really happens when a private equity firm purchases a nursing home. Unfortunately, it does not look good for the residents who are in need of quality care. The Carlyle Group, one of the biggest private equity firms in the country, took over real estate for ManorCare. ManorCare, a nursing home chain filed for bankruptcy after struggling financially for years. Prior to the chain filing for bankruptcy, the chain put nearly 25,000 of its patient’s health at risk. There were horrific examples of patients receiving injuries due to understaffing. For example, Pierce explains that one patient, who had uterine cancer, sat on the bedpan for so long that she became bruised. Furthermore, one nurse’s aide had to lift a patient by themselves, resulting in the patient falling and breaking her hip. Since the Carlyle Group purchased the nursing home, the number of incidents like the ones described above increased nearly 26 percent from 2013 until 2017.

The facility, and many other ManorCare nursing homes, were understaffed. This was due to the company having to sell nearly all of its property, laying off hundreds of staff, and cutting cost of operation, due to the financial burden it was under. In all of the states that the chain ManorCare, now under The Carlyle Group, had the highest number of facilities, their rate of incidents increased each year.

The Carlyle Group is not easy to deal with according to the article. The Group apparently knew nothing about the nursing home business. According to the article, the Group does not believe that the billion dollar real estate deal with ManorCare is the reason for the facilities in adequate care, but that government and Medicare policies are responsible.

There is an alarming trend regarding nursing home care. Profit is more important than the patients. Although the article takes shots at the companies, it does bring to light that capitalism is doing more harm than good within the nursing home sphere.



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