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New York Times Report Spurs Investigations of
Nursing Homes Putting Profits Above Care

A September 23, 2007 article by the New York Times reveals how major for–profit nursing home corporations are dividing themselves into many separate corporations in order to avoid being held accountable for neglect and how private equity firms are buying up large portions of the nursing home industry because of the enormous profits to be made from the care of sick and frail old people. The Times’ investigation shows nursing homes owned by private equity firms have higher levels of health and safety violations than other nursing homes.

Click here to read the September 23, 2007 New York Times article:
"More Profit and Less Nursing at Many Homes" (pdf)

Click on the image below to view a diagram by the New York Times of the layers of ownership.

The Times report has triggered demands for federal and state investigations.

On October 3, 2007, Senator Charles Grassley, the Ranking Member of the U.S. Senate Finance Committee, initially responded by seeking investigation by the U.S. Government Accountability Office (GAO).

Click here to read Senator Grassley’s October 3, 2007 press release and letter to the GAO. (pdf)

On October 18, 2007, Senator Grassley and Senator Max Baucus issued a press release describing their joint letter to the Centers for Medicare and Medicaid Services (CMS) – the federal agency that oversees nursing home care – asking what it is doing to address these concerns. The senators also wrote individual private equity firms about their management of nursing homes.

Click here to read Senators Grassley’s and Baucus’ October 18, 2007 press release and letters to CMS and private equity firms. (pdf)

On October 24, 2007, the New York Times published a follow–up story reporting that two Congressional committees would be investigating business practices at nursing homes owned by private investment groups. It also reports that State legislators in Florida, Illinois, Pennsylvania, Michigan and Washington have asked regulators to investigate the Carlyle Group’s $6.3 billion acquisition of HCR Manor Care, the nation’s largest nursing home chain. Carlyle is a private equity giant.

Click here to read the October 24, 2007 New York Times article: "Inquiries at Investor–Owned Nursing Homes.’ (pdf)

The Center for Medicare Advocacy issued a press release on September 24, 2007 advocating major reforms to protect nursing home residents from profiteering nursing home operators. CANHR fully supports and endorses all of its recommendations.

Click here to read the Center for Medicare Advocacy’s press release. (pdf)