America’s Seniors Deserve a Hearing

After logging nearly 800 miles on the road since last Wednesday, a caravan of long-term caregivers and senior advocates arrived on Capitol Hill yesterday with a message: Private equity firms — the ones that buy public companies, take them private, and make dramatic changes before re-selling the companies for a profit — have a responsibility equal to their size; these buyout firms should be held accountable for the impact of their actions on seniors, taxpayers, and workers.

After meeting with the workers, Chairmen John Dingell (D-Mich.) and Barney Frank (D-Mass.) announced the first congressional hearings on private equity ownership of nursing homes. The announcement comes on the eve of the biggest private equity nursing home takeover in history, the $6.3 billion buyout of HCR Manor Care by The Carlyle Group.

It’s been a landmark month for families, workers, and advocates concerned about what happens when decisions about nursing home care delivery are placed in the hands of buyout kings accountable only to their investors. A recent New York Times investigation depicted these concerns all too vividly.

On October 2, we sent letters to four Congressional committees urging them to hold hearings and exercise their oversight duties on behalf of America’s seniors, one of our nation’s most valued — and vulnerable — populations. The response from Congress has been encouraging.

On October 18, the Senate Finance Committee sent letters to five large private equity firms asking for information about their ownership and management of nursing homes. Earlier this month, Sens. Baucus (D-Mont.) and Grassley (R-Iowa) asked the Centers for Medicare and Medicaid Services (CMS) to account for reports of higher health and safety violations in nursing homes that have been bought by private equity investors. Sens. Grassley and Clinton (D-N.Y.) each requested investigations of the issue by the Government Accountability Office.

Rep. Frank summarized succinctly why he and others are acting now: “We see what private equity brings to the table, and we’re skeptical that it’s what the nursing home industry needs.