Should Nursing Homes Be for Profit?

By Emily Udell, In These Times. Posted January 28, 2008.

Is it right that people are trying to make money off taking care of our most vulnerable population?

In late 2007, the investment firm The Carlyle Group purchased one of the country's largest nursing home chains despite the concerns of regulators, lawmakers and workers' groups that the acquisition would lead to staffing cuts and cause a decline in quality of care for residents. The $6.3 billion purchase of Toledo, Ohio-based Manor Care Inc. closed after a Michigan judge lifted a restraining order that temporarily halted the sale.

"The problem is, in the nursing home industry, making money means cutting care," says Julie Eisenhardt, a spokeswoman for Service Employees International Union (SEIU), which represents employees at about 15 Manor Care homes and which spearheaded a campaign to raise awareness about the buyout.

Rump says that Carlyle would not separate its assets from its operations as some private equity firms have done and that the Manor Care management team would remain the same.

But a preliminary study of a large nursing home chain owned by a private investment firm found that staffing of registered nursing homes dropped by 8 percent and deficiencies that harmed residents doubled.

"They're not there to invest in the care for the residents, they're there to make money," says Charlene Harrington, a professor of nursing at the University of California, San Francisco, and author of the 18-month study. "The way these chains have made money is by cutting the staff to the bare bones and pocketing the profits."


"These chains have had so many quality problems that they have wanted to go private in order to keep from having the litigation they have," she said.

A recent New York Times analysis of government data from 2000 to 2006 found that the quality of care declined at nursing homes that were taken over by investment firms such as Warburg Pincus and Carlyle because of cost-cutting and staff reduction.

David Adams, 40, entered one of Manor Care's homes in Pittsburgh, Pa., after he ruptured his Achilles tendon playing basketball. He says the care at the Shadyside Nursing and Rehabilitation Center was substandard before the takeover, and he's concerned it will only get worse.

"As boomers get older, taking care of them is going to be big business," says Eisenhardt of SEIU. "The question is: Do we as a society think it's right that people are trying to make money off taking care of our most vulnerable population?"

Abridged and Edited for EA =>>