GPs absent from hearings on PE-owned nursing homes

Two US Congressional committees will hold hearings on private equity ownership of nursing homes tomorrow; a REIT executive is the only finance-industry representative scheduled to testify.

Private equity will again be under the microscope on Capitol Hill, but buyout firms have not been invited to testify at the House of Representatives and Senate hearings on private equity-owned nursing homes.

Academics, health care industry representatives, elected officials and the Service Employees International Union, a frequent private equity critic, will discuss issues relating to nursing homes, including private equity ownership.

As PEO previously reported, Congressional interest in private equity involvement in nursing homes stems from a September New York Times article which alleged substandard patient care was prevalent at private equity-owned US nursing home chains, including those owned by Warburg Pincus. Warbug Pincus declined comment.

“I am concerned about quality issues and lack of accountability, particularly as more and more beneficiaries are now living in private equity-owned homes,” Pete Stark, chairman of the House Ways and Means Subcommittee on Health, said in a statement. “While we must not prejudge anything, these changes provide ample reason for us to reinitiate close oversight of this industry to make sure that interests of beneficiaries are protected.”

The House’s health subcommittee has published the following tentative witness list: Charlene Harrington, professor of sociology and nursing at the University of California, San Francisco; John Schnelle, professor of medicine and director of the Vanderbilt Center for Quality Aging, Vanderbilt University; Scott Johnson, Mississippi’s Special Assistant Attorney General; and Arvid Muller, assistant director of research for the SEIU.

The SEIU’s Muller, who for years has led the labour union’s campaign for increased patient care levels at nursing homes, will also testify later in the day at the Senate Special Committee on Aging hearing, which consists of three panels.

The first panel will be Republican Senator Charles Grassley, who has been leading inquiries into and endorsing bills related to private equity’s taxation levels. Grassley will discuss “the main objectives of the Nrusing Home Transaprency and Improvement Act of 2007, legislation he and [Special Committee on Aging chairman herb] Kohl plan to introduce in coming weeks”, according to a statement.

The second panel will feature Kerry Weems, acting administrator for the Centers for Medicare and Medicaid. Weems is expected to discuss government programmes established to resolve problems of non-compliance in nursing homes and initiatives for improving care and transaparency.

The third panel consist of Muller, who will touch on the private equity ownership aspect, as well as David Zimmerman, director of the Center for Health Systems Research and Analysis; Steve Biondi, vice president of Extendicare Healthcare Services, a REIT that operates 267 long-term care facilities across North America; Bonnie Zabel, administrator of Marquardt Memorial Manor, a Christian nursing home in Wisconsin; and Sarah Slocum, Michigan State long-term care ombudsman.

Related hearings may also be scheduled by the House of Representatives’ Energy and Commerce Committee as well as the House’s Financial Services Committee and the Senate Finance Committee, both of which held several tax-related private equity hearings this summer.

Earlier this year, a Washington lobbyist told sister publication Private Equity International that witness rosters are reliable indicators of committee member sentiments. The absence of private equity representatives from a hearing on private equity could therefore be a worrying development.