Carlyle: Fix ManorCare Now!

Background:

In 2007, ManorCare shareholders approved a buyout by the Carlyle Group, a Washington, DC-based private equity firm with a history primarily in the defense and government contracting sectors. In recent years, Carlyle has also acquired companies such as Hertz Car Rental, Dunkin’ Donuts, and others.

Between the deal approval and the December 20, 2007 deal close, quality care advocates came together to challenge Carlyle to commit to fixing ongoing care problems at ManorCare. Regulators pressed Carlyle and ManorCare to answer key questions, many of which remain unanswered:

• How does Carlyle intend to make a profit at ManorCare without cost cutting measures that could affect front-line care?
• Will Carlyle restructure the company to make it more difficult for residents to hold them accountable?
• Who will be ultimately responsible for the care provided after the buyout?

In response to the campaign, Carlyle and ManorCare issued a “Quality Patient Care Pledge” that outlined general concepts of how they intend to deliver care.

What’s happening now:

Since the buyout, ManorCare homes have been cited for serious care problems, and these citations, together with other recent developments, raise questions about whether Carlyle - ManorCare intend to live up to their promises.

• A home in Davenport, IA was denied new admissions of federal-pay residents after repeated, poor inspection reports. Its latest inspection report showed violations of 35 regulatory standards.
• Workers at a Towson, MD home are fighting for a contract that includes a fully paid training program. Although Carlyle’s “Pledge” included promises about education and training for staff, they’re fighting back against the workers’ request.
• A charge has been filed with the Federal Government, claiming that ManorCare is violating workers’ rights in Pennsylvania, including a worker who spoke up about staffing and care concerns. The Federal Government is currently investigating this charge.
• A delegation representing some of those concerned about the Carlyle buyout visited Carlyle-owned senior care facilities in Japan and found a more positive and productive relationship between management and staff than seems to exist here in the US. The delegation is raising questions about why an American company can’t develop that kind of relationship in America, too.
• Congress recognized that additional regulation is needed to address problems like those raised in connection with this buyout and has reacted by introducing the Nursing Home Transparency and Improvement Act, S2641.
• 60 nursing home workers from around the nation gathered in Baltimore to confront Carlyle co-founder David Rubenstein, to picket ManorCare Towson, and to flyer at area nursing homes from April 27-30 in the first ever Nursing Home Accountability Team actions.