Private Equity Firm Pledges Quality Nursing Home Care
The Carlyle Group notified state regulators nationwide that it would maintain adequate staffing and investments at nursing homes owned by Manor Care, a chain of more than 500 facilities nationwide that the Carlyle Group is purchasing, the Washington Post reports.
The move is intended to defuse opposition from labor groups lined up against Carlyle's $6.3 billion purchase of the nursing home chain. The groups have raised concerns that the Carlyle Group would reduce staffing or patient care to achieve financial goals.
However, Karen Bechtel, a managing director at Carlyle and head of its health care team, said, "It is fundamental to our investment theses that we continue to improve and enhance patient care because that will attract even more patients and make this a better investment."
Health care experts interpreted Carlyle's pledge to state regulators differently. David Goldstein, an associate professor of clinical medicine at USC's Keck School of Medicine, called it "relatively meaningless," while Joseph d'Oronzio, associate professor of health policy at Columbia University's Mailman School of Public Health, described it as "a positive and good gesture."
Manor Care shareholders approved the sale last week; the deal is expected to close by the end of the year.
Meanwhile, Senate Finance Committee Chair Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa) have asked Carlyle and four other private equity groups for information about their ownership and operation of nursing homes.
Baucus and Grassley also have asked CMS to address a report indicating that nursing homes owned by private equity firms experienced a higher number of health and safety violations (Heath, Washington Post, 10/22).