When I read stories like this, I find myself wondering if we are really in the people business or is it just about grabbing as much cash as we possibly can?

By Steve Moran

I read stories like this and find myself wondering if we are really in the people business . . . or it is just about grabbing as much cash as we possibly can and then shrugging our shoulders when things go badly with a careless attitude of “oops, I guess that didn’t work out so well”.

What Am I Talking About?

This story published on November 25 in the New York Post titled . . .

Overdoses, bedsores, broken bones: What happened when a private-equity firm sought to care for society’s most vulnerable

Was Larry Minix Right?

I cannot tell you how much it pains me to ask this question. When Larry was the head of LeadingAge, he would bash the for-profit world saying the not-for-profits provided better care. I hated it when he did that and was publically critical because it was a grossly unfair comparison, especially since most of the Medicaid care is provided by for-profit providers — and even worse, many not-for-profits have figured out ways to mostly take private pay, HMO, and Medicare patients.

And Yet . . .

HCR ManorCare, under the ownership of the Carlyle Group, ended up in bankruptcy because of greed. Because all they cared about was making as much money as the could. At the end of the day, they cut expenses, sold the buildings, and created an unsustainable situation. They were either complete idiots (which I don’t believe) or just didn’t care enough about the residents and team members to do the right thing.

This Is Very Personal to Me

I have written about my journey as a consumer of senior living when I had to place my mother in extended care, where I experienced the very best and the worst. I have avoided naming providers that provided less than stellar care until now.

The worst was a 7-day stay in an HCR ManorCare nursing home where the care looked more like hell than home. My mother was not supposed to go to the bathroom unaccompanied, but when she hit her call button it took 10+ minutes for someone to respond.  

The CNAs were great. They cared and they clearly felt guilty that they did not have enough help. Yet, the RNs would sit at the nursing stations acting oblivious to the call bells that never stopped ringing.

We could come to visit and find my mother’s nasal cannula across the room in the direction of the bathroom because no one was available to help. And they were receiving perhaps $1,000 a day from Medicare for this kind of treatment.

I complained to the Director of Nursing. It did no good. I could never reach the Administrator. I complained to the Regional Manager and got lip service sympathy, and yet still nothing changed. Consequently, in just a few days we found an amazing 6-bed community, called All Seasons, where my mother lived out the last 8 months of her life.

Carlyle’s Response . . .

According to the article, Carlyle placed blame for the bankruptcy on the Medicare Program.   

“In the first four years [after the acquisition] we felt very good about the progress” at HCR ManorCare, said Chris Ullman, a Carlyle spokesman. “They had improved some of the quality metrics. We were looking to expand, then things changed drastically due to the massive Medicare rate cut.”

It is a completely bogus argument. It was bad care and creating an unsustainable financial capital model. Ultimately though, I believe the root cause was simply the bad care. If we are honest, senior living organizations that provide great care almost never go broke. But the Carlyle Group seems to have made decisions designed to get them the highest short-term financial gain.

No Harm, No Foul . . . No Way!

They argue in the referenced article that this was really a “no harm, no foul” situation because . . . ”not a single creditor lost a single penny as a result of the bankruptcy filing”.


Why are we not outraged by this? How about those team members who were overworked and abused? How about those residents like my mom, who got crappy care . . . just so the millionaire executives of Carlyle could make their bank accounts even bigger.   

Don’t Get Me Wrong

I am firmly a capitalist. I ultimately think Larry Minix’s attacks and comparisons were unfair and did serious damage to the industry. There are some amazing for-profit providers and some not-for-profits that aren’t that good.

But we as an industry need to condemn these things. We need to be outraged when this kind of care happens. We have to speak out.  

Perhaps that is our single biggest failing . . . that we are too willing to protect our own tribe members when a member shames the rest of the tribe.