Manor Care buyout decision imminent
By Karen Lincoln Michel
MADISON - Questions of financial liability and patient care were raised at a public hearing Monday on a proposed $6 billion buyout of Manor Care Inc. nursing homes.
The state has until Friday to decide whether it will grant a one-year probationary license to Carlyle Group, one of the nation's largest private equity firms, to run eight of Manor Care's long-term care facilities in Wisconsin. Five are located in Northeastern Wisconsin; two are in Green Bay.
Two lobbying groups - the Service Employees Inter-national Union, the state's largest health care labor union, and the Wisconsin Academy of Trial Lawyers - warned against the possibility of Carlyle creating a complex corporate structure that would make it difficult to successfully sue the investment company for negligent injury or wrongful death.
"Once Carlyle's applications for nursing home licenses are approved, it may be very difficult to hold these homes accountable," said Brian Olney, senior researcher for the Service Employees International Union.
In addition to concerns about possible staff cuts and whether the ownership change would negatively affect quality of patient care, Olney also said the union reviewed the Manor Care application and found it "deficient."
He said the company needs to provide more information on plans for revenue and profit growth and disclose a complete list of executives and corporate entities that will exercise control over the nursing homes.
Stephen Guillard, executive vice president and chief operating officer for HCR Manor Care - Manor Care's operating group - testified that the "transaction will be seamless to our patients, families and employees" and said the people who currently manage the facilities will remain in their positions.
He said there will be no staff reductions as part of the buyout.
"We believe that the reputation and value of our company is directly related to the quality of services that we provide to our patients, residents and families, and we will do everything within our power to ensure that it continues uninterrupted," said Guillard.
Otis Woods, administrator of the Division of Quality Assurance for the state Department of Health and Family Services, said that if a one-year probationary license is granted, the state will conduct periodic reviews to ensure that the company is in compliance with state law.
Sen. Tim Carpenter, D-Milwaukee, and committee chairman, said the hearing emphasized the point that a new trend is developing in nursing home ownership.
"It's a whole new era, and what we need to do is make sure that our laws and statutes are up to date to protect the most vulnerable members, the frail elderly, that are in these nursing homes," Carpenter said.