Thursday, August 25, 2022

PEU Ownership = Rise in Nursing Home Deaths

Private equity ownership of nursing homes is once again front and center in The New Yorker.

In the autumn of 2019, Atul Gupta, an economist at the University of Pennsylvania, set out with a team of researchers to measure how (private equity instituted) changes affected nursing-home residents. They sifted through more than a hundred private-equity deals that took place between 2004 and 2015, and linked each deal to categories of resident outcomes, such as mobility and self-reported pain intensity. The data revealed a troubling trend: when private-equity firms acquired nursing homes, deaths among residents increased by an average of ten per cent. 

The Carlyle Group ran nursing home giant ManorCare into bankruptcyIt had quality problems like those discovered in the Penn study.

At homes with fewer direct-care nurses, residents are bathed less. They fall more, because there are fewer hands to help them to the bathroom or into bed. They suffer more dehydration, malnutrition, and weight loss, and higher self-reported pain levels. They develop more pressure ulcers and a greater number of infections. They make more emergency-room visits, and they’re hospitalized more often.“They get all kinds of problems that could be prevented,” Charlene Harrington, a professor emeritus of sociology and nursing at the University of California, San Francisco, said, of residents at homes with lower nurse-staffing levels. “It’s criminal.”

The greed and leverage boys sponsor compliant lawmakers so consequences are few to nonexistent.  Instead elected officials maintain the PEU boys preferred "carried interest" taxation. 

Consider the case of Richmond, Virginia nursing home. 

Before St. Joseph’s was acquired, it had been a single nonprofit nursing home. (PEU Executives) Simcha Hyman and Naftali Zanziper created a corporate web. They formed one company for the home’s property (called Henrico Va PropCo L.L.C.) and another for the home’s operations (Henrico Va OpCo L.L.C.). Accordius Health was the management company. The Portopiccolo Group, at the very top, was insulated from the nursing home by at least two corporate layers. In the event of a lawsuit, the nursing home would “dissolve into this welter of different legal entities,” Hughes said. “It’s like a sandcastle—when you touch it, it starts to break apart.”

Carlyle broke ManorCare despite promises not to do so to former Medicare Chief Gail Wilensky.  It's hard to avoid responsibility for care debacles when the PEU charges a management fee.  Yet, they do just that while pursuing earthly Mammon at the expense of the elderly. hiked up rent in the home’s apartments—in some cases, from five hundred dollars a month to fifteen hundred. Under Portopiccolo’s ownership, the home had gone from about a hundred employees to sixty.

Revenue up, expenses down is the PEU way.  People being harmed is a several decade long byproduct.  They are good for funeral home job creation. 

Update 8-26-22:  Private equity owns eight of the biggest companies doing autism treatment.  Uh oh...