Thursday, November 15, 2007

Today's Hearing on ManorCare/Carlyle Deal

Capital Hill will hold a hearing today on the acquisition of huge nursing home chain, ManorCare by the politically connected private equity underwriter, The Carlyle Group. Just down Pennsylvania Avenue from The White House sits Carlyle's headquarters. It happens the occupants of 1600 Pennsylvania Avenue left out their neighbors when writing the Lessons Learned report after Hurricane Katrina. Carlyle's LifeCare Hospitals had the largest patient death toll in the storm's aftermath.

It is highly likely that today's choreographed testimony will omit Carlyle's startling failure to safeguard twenty four patients in a time of disaster. Yet the private equity firm's legal defense adds to the malodorous emanations, which continue seeping from the event. Carlyle blames medical providers from Tenet Healthcare, when LifeCare clinicians clearly had a responsibility to their patients.

News reports indicate a LifeCare administrator abandoned the hospital's patients in a time of need. While their employee went below deck in Joseph Hazelwood fashion, Carlyle tried to turn a doctor and two nurses into crazed criminals. Jurors didn't buy it in a criminal trial, casting doubt on the PEU's ability to win with this defense in civil wrongful death lawsuits. Now Carlyle blames the federal government, claiming LifeCare patients became wards of the federal government as soon as FEMA evacuation teams set up in New Orleans.

If Carlyle failed patients in one of twenty one long term acute care hospitals in a disaster, how might they perform with 550 mostly nursing homes? The question is relevant based on Carlyle's history with health care acquisitions, yet no one will ask it on the Hill today. At least that's my guess.