Private equity firms would be factors in the nursing home business, Richard Matros, chief executive of Irvine nursing home chain operator Sun Healthcare Corp. predicted a few months back.
Well, private equity firms have become an issue in the industry, but in a different way than Matros expected.
Two big-name senators now are questioning what private equity firms’ ownership means when it comes to the type of healthcare being delivered to seniors.
Sens. Charles Grassley, R-Iowa, and Hillary Clinton, D-New York, asked the Government Accountability Office earlier this month to look at the quality of care at nursing homes under private equity ownership.
Grassley and Democratic presidential frontrunner Clinton asked the Government Accountability Office, Congress’ investigative arm, to review whether private equity ownership of nursing homes leads to decreased quality of care.
In published reports, the senators cited a New York Times story that showed several issues after private equity firms bought nursing homes, including an increase in the number of safety violations, a decline in staffing and patients’ care suffering.
The senators’ inquiry comes just as a couple of Sun’s competitors are gearing up to go private.
In August, the Carlyle Group got antitrust clearance to buy Manor Care Inc. of Toledo, Ohio, for $4.9 billion. Kennett Square, Pa.-based Genesis Healthcare Corp. agreed to be bought by Formation Capital and JER Partners in a $1.2 billion deal in January, while Beverly Enterprises Inc. of Fort Smith, Ark., went private two years ago.
The findings were “alarming, to say the least,” Grassley said.
The senator asked the Government Accountability Office to analyze the number of private equity deals involving nursing homes, along with quality and safety issues before and after changes in ownership.
Clinton asked regulators to assess 63 firms that the office cited in March as having troubled histories.
Besides the companies that now are owned by private equity firms and Sun, other nursing home players include Skilled Healthcare Group Inc. of Lake Forest, Ensign Group of Mission Viejo and Kindred Healthcare.
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CHOC in Orange: named top hospital list |
Hospitals, Nurses at It Again
The California Hospital Association and the California Nurses Association, familiar antagonists, are back snapping at each other over a possible extension of the state’s hospital earthquake safety law.
Senate Bill 306, by Sen. Denise Moreno Ducheny, D-San Diego, is designed to allow a certain number of hospitals,those considered to be financially at risk,the opportunity to apply for a seven-year extension to the current 2013 compliance deadline.
The 2013 deadline requires hospitals to withstand a big quake by then. By 2030, they need to be able to keep operating after one.
If the extension is granted, hospitals would have to complete their retrofitting by a more stringent deadline of 2020, instead of 2030.
Late last month, the nursing union called the bill “an earthquake time bomb” and urged Gov. Arnold Schwarzenegger to veto it. The bill is on Schwarzenegger’s desk, having passed the state Senate in mid-September.
The hospital association responded, condemning the nurses’ association for what it called “false allegations” about Ducheny’s bill.
The hospital association estimates that just more than 10 facilities around California would qualify for an extension. But the nurses’ union replied that there are about 340 hospitals that still need seismic retrofitting and could potentially try to qualify for exemptions under the law because of what it called loopholes in the bill’s financial requirements.
Bits and Pieces:
Avanir Pharmaceuticals Inc., an Aliso Viejo drug maker, said it reached a deal with the Food and Drug Administration on how it will design a single third-phase clinical trial of its Zenvia drug candidate for patients with emotional outbursts Children’s Hospital of Orange County said it was one of only eight children’s hospitals in the country named to the Leapfrog 2007 top hospitals list, which measures hospitals’ quality of care and safety. The Leapfrog Group, a group of businesses and others interested in quality issues, puts out the survey A study presented last month at the Interscience Conference on Antimicrobial Agents and Chemotherapy showed that On-Q, the pain relief medication pump from Lake Forest-based I-Flow Corp., could cut surgical site infections in half and reduce patients’ hospital stays by 25% Amerita Inc., an Irvine provider of medical specialty infusion services, said it bought Infusion Innovations of Salt Lake City for an undisclosed price DBN Development LLC of Laguna Hills has started work on Parkside Medical Center, a medical office complex in San Jacinto near Hemet FlexScan Inc. of Mission Viejo said that the San Bernardino County government approved a deal to provide its wellness services to 18,500 employees and 8,000 retirees ThermoTx, an Irvine medical device maker, introduced a line of pain treatment braces earlier this month at the American Academy of Family Physicians’ 2007 Scientific Assembly in Chicago.
