(This article is too long to post in its entirety but well worth reading.)
September 23, 2007
More Profit and Less Nursing at Many Homes
By CHARLES DUHIGG
Habana Health Care Center, a 150-bed nursing home in Tampa, Fla., was
struggling when a group of large private investment firms purchased it
and 48 other nursing homes in 2002.
The facility’s managers quickly cut costs. Within months, the number of
clinical registered nurses at the home was half what it had been a year
earlier, records collected by the Centers for Medicare and Medicaid
Services indicate. Budgets for nursing supplies, resident activities and
other services also fell, according to Florida’s Agency for Health Care
Administration.
The investors and operators were soon earning millions of dollars a year
from their 49 homes.
Residents fared less well. Over three years, 15 at Habana died from what
their families contend was negligent care in lawsuits filed in state
court. Regulators repeatedly warned the home that staff levels were
below mandatory minimums. When regulators visited, they found
malfunctioning fire doors, unhygienic kitchens and a resident using a
leg brace that was broken.
“They’ve created a hellhole,” said Vivian Hewitt, who sued Habana in
2004 when her mother died after a large bedsore became infected by feces.
Habana is one of thousands of nursing homes across the nation that large
Wall Street investment companies have bought or agreed to acquire in
recent years.
Those investors include prominent private equity firms like Warburg
Pincus and the Carlyle Group, better known for buying companies like
Dunkin’ Donuts.
As such investors have acquired nursing homes, they have often reduced
costs, increased profits and quickly resold facilities for significant
gains.
But by many regulatory benchmarks, residents at those nursing homes are
worse off, on average, than they were under previous owners, according
to an analysis by The New York Times of data collected by government
agencies from 2000 to 2006.
The Times analysis shows that, as at Habana, managers at many other
nursing homes acquired by large private investors have cut expenses and
staff, sometimes below minimum legal requirements.
Regulators say residents at these homes have suffered. At facilities
owned by private investment firms, residents on average have fared more
poorly than occupants of other homes in common problems like depression,
loss of mobility and loss of ability to dress and bathe themselves,
according to data collected by the Centers for Medicare and Medicaid
Services.
The typical nursing home acquired by a large investment company before
2006 scored worse than national rates in 12 of 14 indicators that
regulators use to track ailments of long-term residents. Those ailments
include bedsores and easily preventable infections, as well as the need
to be restrained. Before they were acquired by private investors, many
of those homes scored at or above national averages in similar measurements.
full: http://www.nytimes.com/2007/09/23/business/23nursing.html
