1 year, 5 months ago by Doug Ibendahl, Republican News Watch
From by Doug Ibendahl, Republican News Watch:
Republican gubernatorial candidate Bruce Rauner pledges to run Illinois government “like a business.” In light of some disturbing facts which have come to light through multiple lawsuits involving Rauner’s former private equity firm, voters had better do their homework into what exactly the catchphrase “like a business” means to Mr. Rauner.
The nursing home industry came under serious stress in the wake of the Balanced Budget Act of 1997. The law significantly changed Medicare’s reimbursement system. Where before Medicare had reimbursed nursing homes for their costs plus a profit, now there were strict limitations on reimbursements and new regulations on how long patients could stay in nursing homes for certain conditions.
In 2000 The Wall Street Journal said: “The vultures are circling the carnage in the nursing-home industry. With some of the largest nursing-home operators under bankruptcy protection and others heading in that direction, a number of deep-pocketed investors are preparing to swoop in on the choice morsels.”
Bruce Rauner’s Chicago-based investment firm GTCR, LLC (formerly known as GTCR Golder Rauner)decided to get in on the action and one vehicle it used was Trans Healthcare Inc. (“THI”). THI’s launch to acquire nursing homes appealed to GTCR “because a new prospective payment system for Medicare was just being implemented,” said Ned Jannotta Jr., then a GTCR principal.
Jannotta continued, “We thought it would create a lot of distress, and there would be a decline in multiples for assets and a decline in buyers for those assets.”
Rauner was with GTCR for three decades. He left the firm in October 2012 in advance of his run for governor.
GTCR’s foray into the nursing home business might have been good for the bank accounts of Bruce Rauner and his friends. But according to court documents, some elderly residents of those nursing homes paid the ultimate price.