As the trend toward private equity buyouts escalates across the country, it is vital that public officials scrutinize such transfers of ownership and the consequences that routinely follow them, such as cost-cutting steps taken to erase massive debt loads. A careful and through review of such transfers is especially important when those buyouts begin to affect critical industries such as healthcare and long-term senior care. In addition to the possibilities for lost jobs as well as reductions in benefits and economic development, these leveraged buyouts deserve extra scrutiny because they impact our most frail citizens, including disabled and elderly patients.
That is precisely the scenario that we are now facing in Illinois as a result of the Carlyle Group's proposed $6.6 billion buyout of the HCR Manor Care chain of nursing homes, which operates 31 facilities in Illinois serving nearly 4,000 elderly and disabled patients. This would mark the first time in Illinois that a private equity firm has sought entry into the nursing home business. Nonetheless, the Carlyle Group—which has vast experience in fields such as aerospace and defense—has urged state regulators to place this deal on a 'fast track' for approval.
The Carlyle Group's proposed buyout may, indeed, make sense for company executives and shareholders. The more important question is whether it makes sense for the thousands of elderly and disabled patients in Manor Care homes across Illinois.
I urge the Illinois Department of Public Health to take as much time as they deem necessary to review these applications, to guarantee that this transaction is in the public interest and will not adversely impact care in nursing homes or long term care facilities. We owe to these patients and their family members nothing less than a guarantee that they can expect to receive quality care in safe and dignified surroundings.
Gregory S. Harris
Representative, 13th District
Member, Illinois House Committee on Aging