Senators seek private equity nursing home probe

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WASHINGTON (Reuters) – Two Senators asked the Government Accountability Office on Tuesday to examine the quality of care at nursing homes under private equity ownership, citing a New York Times report of deteriorating patient care.

Sen. Hillary Clinton of New York, who is seeking the Democratic presidential nomination, and Republican Sen. Charles Grassley of Iowa asked the investigative arm of Congress to review whether private equity ownership of nursing homes leads to shoddier care.

The lawmakers cited the September 23 story that reported after Wall Street private equity firms bought nursing homes, the number of safety violations rose, the number of staff declined and the care offered to patients suffered.

The private equity firm Carlyle Group won antitrust clearance in August to buy Manor Care Inc, the largest U.S. nursing home owner for $4.9 billion. Another chain, Genesis Healthcare Corp. agreed to be bought by private equity in January, and Beverly Enterprises went private in 2005.

“The findings were alarming to say the least,” Grassley said in a statement on the Senate floor.

Grassley asked the GAO to analyze the number of private equity deals involving nursing homes, and quality and safety issues before and after changes in ownership.

Clinton asked for an assessment of 63 firms in particular that the GAO cited in March as having a troubled history.

Other players in the space include Kindred Healthcare, Sun Healthcare Group and Skilled Healthcare.

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