Tuesday, July 03, 2007

The Carlyle Group & Bush's White House

Two weeks before Hurricane Katrina made landfall on the Gulf Coast, The Carlyle Group purchased LifeCare Hospitals, a long term acute care hospital company. After Katrina struck, LifeCare's New Orleans facility had the highest patient death toll. Patients suffered in horrific conditions for up to five days waiting for rescue.

In front of cameras President Bush asked FEMA Chief Mike Brown about hospital patients the day Katrina struck. The nation watched in horror as words turned into inaction. After the federal government's botched response the President commissioned Frances Townsend to investigate with the intention of performing "an honest" assessment and doing better next time.

The White House Lessons Learned report released in early 2006 had several glaring omissions. First it failed to mention the hospital organizations with the highest patient death toll. Carlyle's LifeCare and Tenet's Memorial Hospital shared the same facility. Second, it made no mention of the trade group that coordinated hospital patient evacuations while FEMA stumbled. The Louisiana Hospital Association worked frantically to mobilize resources to evacuate patients suffering in dead facilities. However, the White House report's most glaring error is it never said whose responsibility it was to evacuate patients in the first place, much less evaluate how they performed their duties. Without this critical information, how can we do better next time?

Fast forward to 2007 as Carlyle's LifeCare tries to defend itself in wrongful death civil lawsuits. How does the federal silence help their case? This comes from LifeCare's annual report to shareholders:

"The company is currently defending itself against a variety of Katrina related lawsuits... We intend to vigorously defend ourselves in these lawsuits"

The same LifeCare annual report says this about their services. "A long term acute care hospital serves patients with serious and complicated illnesses or injuries requiring extended hospitalization. Long term acute care hospitals are specifically designed to accommodate such patients and provide them with a higher level of care than a skilled nursing facility or inpatient rehabilitation facility, each of which is often incapable of treating and delivering the same outcome as a long term acute care hospital."

So what is LifeCare's defense? They contend that as soon as FEMA and the Coast Guard began evacuating people from New Orleans their patients became wards of the federal government. If the evacuation began in earnest on Tuesday, then LifeCare had no obligation to their patients for how many hours or days? Who was responsible for providing that higher level of care LifeCare's patients needed?

This defense is laughable as the feds didn't make evacuating patients from dead hospitals and nursing homes a high priority. The Louisiana Hospital Association and HCA are proof of that. HCA hired medical helicopters to transfer patients from its dead facilities. Why couldn't The Carlyle Group? One might expect a private equity firm with over $50 billion under management to pull off such a feat while the Charity Hospitals of the region have to wait.

Why did the White House Lessons Learned report omit the information needed to paint a clear picture of the evacuation of hospital patients post Katrina? Did they do so as a favor to their private equity friends just down Pennsylvania Avenue? How does the blank slate of the White House Lessons Learned report help them defend their "variety of Katrina related lawsuits."

Just as the little folks suffered after the Exxon Valdez oil spill, the little person will take it on the chin courtesy of the government's incompetence and hand holding of major corporate interests. There's a plan here somewhere. What does it portend for Bush's widespread privitization strategies? The Carlyle Group just announced it intends to gobble up Manor Care, a nursing home chain. Will they do any better with those patients post disaster, man made or natural? Want to bet the Bush Justice Department doesn't even ask the question?

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