Private equity companies purchase nursing homes, but care does not suffer
September 10, 2008In recent years, private equity investors have increasingly targeted nursing homes as investment opportunities. Spurred by investigative reports and anecdotal evidence that these deals led to worsened quality of care, many companies have found themselves under increased federal scrutiny.
But according to a new study, such conclusions may be premature. Private equity purchases of nursing homes—many of which result in administrative and corporate restructuring—have not caused quality of care to decline significantly to date. In fact, in some aspects, the quality of care has improved.
"This is an early look at what happens after these purchases," says Harvard Medical School assistant professor David Stevenson, who co-authored the paper with associate professor David Grabowski. "Many of the transactions we looked at were just a few years old, so it's hard to draw definitive conclusions about these types of deals. However, our results paint a more positive picture than had emerged previously."
These findings appear in the September/October issue of the journal Health Affairs.
Starting around 2000, a number of private equity groups began purchasing nursing home chains, mostly in states like Florida and Texas, where litigation was more common than in other states. As a result of these transactions, and to buffer themselves against costly litigation expenses, many of the nursing homes were divided into sub-companies, decentralizing ownership so that, for example, the same "company" didn't own both the property and operations. As a result, if a patient were to sue for medical negligence, it would be more difficult to pursue property assets.
Investigative reporting, such as a 2007 front page article in the New York Times, looked at patient care in these homes both before and after these corporate purchases. It concluded that such restructuring had weakened patient care, which in turn led to increased attention and Congressional hearings on the topic.
"We wanted to study this issue in a quantitatively rigorous way, for example controlling for broader trends within nursing home markets and particular facilities over time," says Grabowski. "The attention to these transactions and the issues they raise is important, and we hoped our study would provide a comprehensive and accurate view of what was happening."
Stevenson and Grabowski examined a range of nursing home outcomes and compared the quality of care in private equity purchased nursing homes to those that had not undergone these transactions.
The researchers looked at various indicators including nurse and aide staffing, survey deficiencies, and a range of resident outcomes including the prevalence of catheter use, urinary tract infections, weight loss, restraint use, pressure ulcers, residents' ability to take care of their own daily needs, and range of motion loss.
When the data were analyzed, the researchers found scant evidence to suggest that the overall quality of resident care had declined substantially following these purchases. Some factors, such as RN staffing, did in fact decline. But others, such as aide staffing, catheter use, UTIs, weight loss, and pressure ulcers, actually improved.
"After taking facility and market trends into account, we did not find a substantial drop in the quality of care delivered in these nursing homes overall," says Stevenson.
The researchers caution that these findings are preliminary, given the recent nature of many of these transactions. In addition, they emphasize that it is still important to consider a range of issues around ownership transparency and accountability that extend beyond private equity investment.
"Our study provides an initial snapshot that is somewhat reassuring," says Stevenson. "But the attention on these deals and the corporate structures that emerge from them still has broader value. Most of all, we need to be confident that residents are positioned to receive high quality care and that there is sufficient recourse in cases where they do not—regardless of who owns the nursing home."
Source: Harvard Medical School
Nov 23, 2009 |
not rated yet |
0
Staffing Cuts and Mounting Patient Care Problems at Manor Care's Pennsylvnia Facilities under Carlyle's Ownership
A new analysis of federal government data reveals staffing cuts and a surge in violations at ManorCare%u2019s Pennsylvania nursing homes while under Carlyle%u2019s ownership. Average nurse and CNA staffing has actually decreased to just 3.29 hours per resident per day (HPPD) at the 20 Pennsylvania Manor Care nursing homes that have undergone annual surveys since Carlyle acquired the company on December 21, 2007. (1) Nurse staffing was cut by 21.4% to just 3.05 HPPD at Manor Care Health Services %u2013 Lansdale, a 170 bed facility in Montgomeryville. (2) In addition, none of the 20 facilities provided the 4.07 hours of care identified by experts in a 2001 study as the threshold below which quality of care is compromised. (3) This staffing data may help to explain a surge in violations of federal health and fire safety standards at these facilities, which increased 31% overall to 202 violations in their post-buyout surveys. (4)
Government survey records describe the tragic stories behind these violations:
ManorCare Health Services - York South was cited in January 2008 and again in May for two separate incidents involving a failure to timely notify a physician of a resident%u2019s change in condition. The residents involved in both incidents died. In January, a resident with a history of fainting and at a known risk for falls fell and died several days later as a result of blunt force head trauma sustained in the fall. Incomplete information was faxed to a physician%u2019s closed office, but a physician was not actually called for more than 17 hours after the fall occurred, during which time the resident exhibited symptoms of increased confusion and vomiting. (5) In May, the facility again failed to timely notify a physician after a resident, whose medication carried a known risk of side effects including heart attacks, complained of head and chest pain and had elevated blood pressure. The resident went into fatal cardiac arrest late that night. (6)
ManorCare Health Services at Mercy Fitzgerald was cited by government inspectors for failing to provide timely assistance to a resident who had amputations of both legs, whose repeated requests for assistance in using the bathroom went unanswered over the course of half an hour. (7)
Donahoe Manor was cited for failure to follow state law and its own policies requiring an FBI criminal background check for an employee who had been hired more than 9 months earlier, and for hiring a dietary aide who worked on the tray line and delivering carts before his tuberculosis skin test was completed. (8)
(1) This average is weighted to reflect different homes census level. The staffing data is based on information from %u201CAbout the Nursing Home%u2013Inspection Results,%u201D Centers for Medicare and Medicaid Services Nursing Home Compare data, downloaded 7/22/2008 and 11/09/2007. Under federal law, nursing homes must be inspected every nine to 15 months.
(2) Ibid.
(3) Ibid.
(4) Ibid.
(5) MANORCARE HEALTH SERVICES-YORK SOUTH, Incident investigation and a State monitoring visit, 01/09/2008, F-0309.
(6) MANORCARE HEALTH SERVICES-YORK SOUTH, Medicare/Medicaid Recertification,
State Licensure, Civil Rights Compliance and Incident investigation survey, 05/22/2008, F-0309.
(7) MANORCARE HEALTH SERVICES AT MERCY FITZGERALD, M edicare/Medicaid Recertification, State Licensure and Civil Rights Compliance Survey, 01/08/2008, F-0309.
(8) DONAHOE MANOR, Medicare/Medicaid Recertification Survey and State Licensure Survey, 01/07/08, F-0226, F-0630.