By: Carol J. Gibbons, J.D.
They take the profits and duck liability.
We have all have heard it said, “Follow the Money”, but according to the New York Times, poor Vivian Hewitt is finding it a hard row to hoe after her mom died because of the negligence of Habana Health Care Center in Tampa, Florida.
Vivian’s mom developed Alzheimer’s disease and Vivian placed her mom in the care of Habana Health Care. But, little did Vivian know that Habana switched hands and was under the new ownership of a prominent investment firm – Warburg Pincus. Investors are in business to make profits, and it seems that there is a growing trend – private equity investors buy up nursing homes, cutting staff and shielding themselves from liability by spreading out the ownership in an ever-growing corporate web, the Times described as a ‘rat’s maze’.
What a concept! Assets and shares of ownership are purposely obscured and difficult to determine – discouraging lawsuits that are costly and almost impossible for grieving families to endure. It is hard to believe that a business model that was created for such a positive purpose could be bastardized in a way that works to protect a corporate structure that sanctions the worst forms of neglect! Neglect of our own parents and grandparents!
An investigation by the Times indicates that private equity groups purchasing nursing homes, and then cut nursing staffs below standards required by law is common. Toby S. Edelman, a nursing home expert with the Center for Medicare Advocacy, a nonprofit group that counsels people on Medicare said, “Private equity is buying up this industry and then hiding the assets” and “now residents are dying, and there is little the courts or regulators can do.” That needs to change – NOW!
Fifteen precious family members have died while in Habana’s care, from what their families assert was negligent care. Regulators warned Habana that their staff levels were below mandatory minimums and when they visited Habana they found various safety and hygienic violations. Surprisingly, Florida regulators indicated they did not know that many of the nursing homes were commonly owned! How can that be???
Private equity-owned nursing homes have consistently received lower ratings in patient care and well-being. And, disturbingly, private equity investors have purchased six of the ten largest nursing home chains.
In the end Vivian is filled with guilt, and she lost her mom, so even if she finds the money she still lost her mom and is feeling responsible for trusting Habana.