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Venture capital company no cure for elder care facilities

The HCR ManorCare chain of nursing homes struggled for five years before filing bankruptcy in 2017. Owned by the Carlyle Group, which is a top tier private equity firm, the second largest nursing home group in the country put an estimated 25,000 patients in harm’s way by not properly caring for patients and not providing a safe and clean environment to live in. 

The Washington Post reports that there were numerous health-code violations between 2011-2017, which is the time that Carlyle owned ManorCare:

  • Lack of staff and qualified staff on duty
  • Medication administration errors
  • Not providing special care for injections, colostomies and other treatment
  • Not providing needed assistance for eating and personal hygiene
  • Call buttons that did not work properly

Running a business into the ground

The number of life-threatening violations has rose 29 percent in the five years leading up to the bankruptcy filing. This followed the Carlyle Group buying the company in 2011 and extracting $1.3 billion and saddling the ManorCare with unsustainable financial debt. Part of the shift ManorCare’s fortunes also involved selling the properties for $6.1 billion and then renting them from the new owners. Once the money was taken out of the ManorCare, the Carlyle Group turned to laying off hundreds of employees, which likely contributed to the rise in violations.

Disputing the accusations

The paper also spoke with consultants who handled health code violations for ManorCare, who claimed that the Carlyle Group were bankers and investment experts who had no idea how to run an elder care business. Nevertheless, the company claims it only trimmed administrative costs, created better business practices and left the medical care alone. The company also points to the fact that Medicare cut how much it paid for nursing home services during its ownerships, which led to additional shortfalls.

Company purchased by non-profit

Promedica Health has since bought the beleaguered ManorCare. This mission-focused non-profit would seem to be a better fit for the health care organization. This is of little consolation to the residents and patients who suffered due to poor care.

Sometimes nursing homes change hands. Nevertheless, the new owners have an obligation to provide the services to the elderly. Families who see a downturn in care of their elderly loved ones should consult a personal injury attorney to discuss options for damages.

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