Alarmed that the purchase of nursing homes by larger companies could cause a decline in care, Maryland is studying whether restrictions should be placed on ownership as regulators face criticism that private equity groups make it more difficult for the public to hold nursing homes accountable for poor care.
The goal of the two bills that Gov. Martin O'Malley recently signed into law is to determine if the type of ownership - ranging from small nonprofits to corporations with worldwide holdings - has a connection with violations of state and federal regulations at nursing homes, said Wendy Kronmiller, director of the state Office of Health Care Quality.
The driving force behind the effort is the acquisition of one of the nation's largest nursing home chains, HCR ManorCare, by the Carlyle Group for $6 billion in December. HCR ManorCare has 14 nursing homes in Maryland and 277 nationwide.
The Service Employees International Union, which represents 1,100 workers at HCR ManorCare nursing homes nationwide, including 200 in Maryland, released a study last year asserting that buyouts of two other nursing home chains have led to more violations of state and federal regulations, and new business structures to limit liability, reduce tax bills and make it more difficult to track how Medicare and Medicaid dollars are spent. Union officials have complained of violations of federal and state regulations at HCR ManorCare nursing homes in Maryland and of what they say is "inadequate staffing."
Kronmiller said a task force formed this summer would have a wider scope than ownership by private equity firms. The group, which will include representatives of consumer groups and nursing homes, will analyze data over two years to determine whether there is a link between type of ownership and poor care.
The state has anecdotal evidence that talented administrators and nursing directors, combined with little staff turnover, result in better care, but officials have not studied ownership, said Kronmiller, whose office is part of the Department of Health and Mental Hygiene.
Maryland has 233 nursing homes - about 60 percent for-profit and 40 percent nonprofit, state officials say. The study will try to determine how many are owned by private equity groups.
