WATERLOO, Iowa (KCRG) – Who owns nursing homes? The answer to that question is often private equity groups. They buy companies, streamline them, and sell them at a profit.
And one such private equity firm out of Illinois, called ‘Cascade Capital Group,’ has bought 29 nursing home facilities in Iowa last year, according to the Iowa Capital Dispatch.
“They take over and care goes care, goes down, and then they move on,” said Sam Brooks with ‘National Consumer Voice for Quality Long-Term Care.’
In November, the state imposed a $10,000 fine on Harmony House Health Care Center in Waterloo after a resident died after choking to death.
This happened two months after the private equity firm ‘Cascade Capital Group’ and its affiliate ‘Legacy Health Care’ bought the nursing home.
Sam Brooks with the ‘National Consumer Voice for Quality Long-Term Care’ said there’s been a trend in private equity firms buying nursing homes.
“We know that private equity increases the mortality of Medicare residents by 10%. We know these things now. And it’s just really no… private equity should not be in health care. It should not be in nursing homes,” Brooks said.
Brooks said these companies often make cuts in staff, services and even cuts in the quality of food. All in the name of saving money.
”You also have to be vocal. In nursing homes, the squeaky wheel gets the oil. So the nursing home administrator, the staff, need to be hearing from you. You need to be demanding high-quality care,” said Brooks.
Since 1972 each state has had a place where people can bring concerns about nursing homes: an Ombudsman.
Iowa’s long-term care ombudsman said building relationships with residents is central to quality care, but when leadership is far removed from the facility, that’s difficult.
“When you get people that don’t know the resident, don’t know their needs, don’t have any kind of an interest in the community,” said Angela Van Pelt, Iowa Long-Term Care Ombudsman. “It’s just not, it’s not an ideal scenario, and quality is generally the first thing to go.”
Since the private equity firm bought nearly 30 nursing homes in Iowa, fines against those homes have skyrocketed.
Data from The Center for Medicare and Medicaid Services shows Legacy has been fined around 17 times more than Harmony’s previous owner.
At the end of the day, Brooks said these companies aren’t looking to do better when they get these big fines.
“These are businesses who have a bottom line. They know how much money they need to return to their investors and in what time. So they’re doing this… these calculations down to the to the penny. So they know that’s just the price of doing business until we step in and say, no, you can’t do business anymore or until those fines become so robust that it diminishes their profits, we’re going to continue to see this,” said Brooks.
And he added, that for these companies the bottom line is how much money can they make.
“These aren’t folks that are in it for the care. These aren’t folks that are looking at fines and violations and saying, oh, we can do better. They’re saying, you know, how can we get around them?” he said.
Brooks said he hopes continuing conversations will help facilitate change in the future.
TV9 has reached out to both Cascade Capital Group and Legacy Health Care for comment and has not heard back.
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