Private Equity Firm’s Management of Ohio Nursing Homes Under Fire

Ohio Nursing Home Guide

It is unknown how many of our vulnerable elderly fall victim to neglect or abuse each year since such actions are easily hidden from view and underreported. In fact, according to the National Center for Elder Abuse (NCEA), 84 percent of abusive situations involving older adults go unreported or unrecognized.

    We know that nursing home abuse and neglect is a serious problem in Ohio. Yet it is difficult to get a full measure of how bad the situation is, because abuse and neglect is under-reported in general. And even when it is reported, state officials may not take appropriate action.
    Recently, the Washington Post published an important expose of widespread neglect and abuse problems at HCR ManorCare, which is the second-largest nursing-home chain in the United States. Based on state-agency inspection records reviewed by the Post, the management practices of HCR ManorCare’s former owner–the Carlyle Group–exposed “roughly 25,000 patients to increasing health risks.”
    More precisely, the Post said there was a 26 percent increase in health-code violations at 230 HCR ManorCare facilities reported between 2013 and 2017. These violations included failure to prevent and treat bedsores, mistakes in administering medication to patients, and even failures in providing basic care, such as “assisting patients with eating and personal hygiene.”
    Carlyle is a well-known multinational private equity firm. Founded in 1987 at the Carlyle Hotel in New York City, the Carlyle Group currently manages over $200 billion in assets worldwide. Carlyle acquired HCR ManorCare in 2007 in a $6.1 billion deal.
    But according to the Post, “Carlyle’s acquisition of HCR ManorCare made the company’s finances more risky because the purchase burdened it with billions in long-term debt.” In 2011, Carlyle sold HCR ManorCare’s real estate assets–i.e., the physical buildings housing its nursing homes and the land underneath–to a separate investment company. HCR ManorCare then had to “rent” its facilities back from this company. Carlyle used the profits from this real estate sell-off to pay back debt it took on to buy HCR ManorCare in the first place. But the Post said this left HCR ManorCare unable to pay its bills–and ballooned its own debt from less than $1 billion to over $6 billion.
    HCR ManorCare filed for bankruptcy in March 2018. The chain was then sold to a nonprofit group.

    Contact a Cleveland Nursing Home Abuse Lawyer Today

    During Carlyle’s ownership of HCR ManorCare, the Post said the number of reported violations at the company’s Ohio facilities “rose more than two times faster” than those at other nursing homes in the state. A Carlyle spokesman told the Post that any decline in patient care should be blamed on Medicare, which “reduced how much it paid for nursing-home services” in 2011. But the Post noted those cuts affected other nursing homes as well, and they were not forced into bankruptcy, as they were “less burdened by financial obligations” created by ownership actions.
    And in fact, many HCR ManorCare residents and their families are not accepting Carlyle’s excuses. The Post noted there are multiple lawsuits pending against a ManorCare facility in Pennsylvania. And more lawsuits are expected in the future.
    If you, or someone you love, has suffered injuries as the result of a nursing home owner’s abuse or neglect, it is important to take action. Contact the nursing home neglect lawyers at Tittle & Perlmuter at (216) 308-1522 if you need legal advice today. Our elderly abuse lawyers serve clients in Cleveland, Lakewood, Elyria, Chardon, Sandusky and surrounding areas.

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