Maryland May Get Tough on Nursing Homes

Dan Frith

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Maryland is studying whether restrictions should be placed on large corporate ownership of nursing homes as regulators face criticism that private equity groups make it more difficult for the public to hold nursing homes accountable for poor care. My guess is the purchase of one of the nation's largest nursing home chains (HCRManorCare) by the Carlyle Group for $6 billion in 2007 is behind this new sensitivity by Maryland legislators. HCR ManorCare has 14 nursing homes in Maryland and 277 nationwide.

The Service Employees International Union (SEIU), which represents 1,100 workers at HCR ManorCare facilities nationwide released a study last year asserting that buyouts of two other nursing home chains have led to more violations of state and federal regulations, and new business structures to limit liability, reduce tax bills and make it more difficult to track how Medicare and Medicaid dollars are spent. Union officials have complained of violations of federal and state regulations at HCR ManorCare nursing homes in Maryland and of what they say is "inadequate staffing."

Two comments/observations: First, private equity owners are interested in one thing..."PROFIT." Providing good care will take a back seat to making money. Second, many of the stories I read in my home state's newspapers talk about how nursing homes just can't make any profit due to low Medicaid reimbursement rates. Somebody better tell that to those private equity investors from the Carlyle Group!