At nation's nursing homes, profits rise as care slips
NEW YORK - Habana Health Care Center, a 150-bed nursing home in Tampa, was struggling when a group of large private investment firms purchased it and 48 other nursing homes in 2002.
The facility's managers quickly cut costs. Within months, the number of clinical registered nurses at the home was half what it had been a year earlier, records collected by the Centers for Medicare and Medicaid Services indicate. Budgets for nursing supplies, resident activities, and other services also fell, Florida's Agency for Health Care Administration said.
The investors and operators were soon earning millions of dollars a year from their 49 homes.
Residents fared less well. Over three years, 15 at Habana died from what families contend was negligent care in lawsuits filed in state court. Regulators repeatedly warned the home that staff levels were below mandatory minimums. When regulators visited, they found malfunctioning fire doors, unhygienic kitchens, and a resident using a broken leg brace.
"They've created a hellhole," said Vivian Hewitt, who sued Habana in 2004 when her mother died after a large bedsore became infected by feces. Habana is one of thousands of nursing homes that large Wall Street investment companies have bought or agreed to acquire in recent years.
Those investors include prominent private equity firms like Warburg Pincus and the Carlyle Group, better known for buying companies like Dunkin' Donuts.
As such investors have acquired nursing homes, they have often reduced costs, increased profits, and quickly resold facilities for significant gains.
But by many regulatory benchmarks, residents at those nursing homes are worse off, on average, than they were under previous owners, according to an analysis by The
At facilities owned by private investment firms, residents on average have fared more poorly than occupants of other homes in common problems like depression, loss of mobility, and loss of ability to dress and bathe, according to data collected by the Centers for Medicare and Medicaid Services.
