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To: RealMuLan who wrote (69720)	9/30/2007 2:05:23 PM
From: RealMuLan	Read Replies (1) \| Respond to of 116555

A long article from New York Times on how Wall Street and private investment firms "stole" from the public by LBO of nursing homes query.nytimes.com At Many Homes, More Profit and Less Nursing By CHARLES DUHIGG Published: September 23, 2007 Habana Health Care Center, a 150-bed nursing home in Tampa, Fla., was struggling when a group of large private investment firms purchased it and 48 other nursing homes in 2002. The facility's managers quickly cut costs. Within months, the number of clinical registered nurses at the home was half what it had been a year earlier, records collected by the Centers for Medicare and Medicaid Services indicate. Budgets for nursing supplies, resident activities and other services also fell, according to Florida's Agency for Health Care Administration. The investors and operators were soon earning millions of dollars a year from their 49 homes. Residents fared less well. Over three years, 15 at Habana died from what their families contend was negligent care in lawsuits filed in state court. Regulators repeatedly warned the home that staff levels were below mandatory minimums. When regulators visited, they found malfunctioning fire doors, unhygienic kitchens and a resident using a leg brace that was broken. ''They've created a hellhole,'' said Vivian Hewitt, who sued Habana in 2004 when her mother died after a large bedsore became infected by feces. Habana is one of thousands of nursing homes across the nation that large Wall Street investment companies have bought or agreed to acquire in recent years. Those investors include prominent private equity firms like Warburg Pincus and the Carlyle Group, better known for buying companies like Dunkin' Donuts. ... About 70 percent of lawyers who once sued homes have stopped because the cases became too expensive or difficult, estimates Nathan P. Carter, a plaintiffs' lawyer in Florida. ''In one case, I had to sue 22 different companies,'' he said. ''In another, I got a $400,000 verdict and ended up collecting only $25,000.'' Regulators have also been stymied. For instance, Florida's Agency for Health Care Administration has named Habana and 34 other homes owned by Formation and operated by affiliates of Warburg Pincus as among the state's worst in categories like ''nutrition and hydration,'' ''restraints and abuse'' and ''quality of care.'' Those homes have been individually cited for violations of safety codes, but there have been no chainwide investigations or fines, because regulators were unaware that all the facilities were owned and operated by a common group, said Molly McKinstry, bureau chief for long-term-care services at Florida's Agency for Health Care Administration. And even when regulators do issue fines to investor-owned homes, they have found penalties difficult to collect. ''These companies leave the nursing home licensee with no assets, and so there is nothing to take,'' said Scott Johnson, special assistant attorney general of Mississippi. ... Formation sold Habana and 185 other facilities to General Electric for $1.4 billion. A prominent nursing home industry analyst, Steve Monroe, estimates that Formation's and its co-investors' gains from that sale were more than $500 million in just four years. Formation declined to comment on that figure. ...