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05/19/22

BuzzFeed research found that KKR prioritized profits over patients, leading to abuse and neglect and putting patients’ lives at risk

Washington, D.C – US Senators Patty Murray (D-Wash.), Chair of the Senate Committee on Health, Education, Labor and Pensions; Elizabeth Warren (D-Mass.), member of the Senate Committees on Finance and Banking, Housing and Urban Affairs; Ron Wyden (D-Ore.), Chair of the Senate Finance Committee; and Bernie Sanders (I-Vt.), Chairman of the Senate Budget Committee, sent a Letter to the co-CEOs of private equity firm KKR, which is blowing up the company after a blow-up BuzzFeed News investigation revealed that following KKR’s acquisition of BrightSpring Health in 2019, the Company provided grossly substandard care and unsafe living conditions in its Intermediate Care Facilities (ICFs) for people with intellectual and developmental disabilities. Executives at KKR and BrightSpring are willing to cash out while patient safety and quality of care decline. Senators are asking KKR for answers about its troubling business practices that threaten patient safety.

“That BuzzFeed News Research found that after KKR’s acquisition, coverage at BrightSpring ICFs deteriorated, with regulators in seven states finding 118 cases of “dangerously understaffing” — double the number at non-KKR-owned facilities. During the same period, KKR boasted that the company grew BrightSpring’s revenue from $2.5 billion in 2018 to $5.6 billion in 2022. However, there is no evidence that these revenues were used to improve the quality of care in ICFs: “Conditions [at BrightSpring ICFs] got so bad that nurses and caretakers quit in droves, a state banned the company from taking in new residents, and some of the most vulnerable people in its care suffered and died. wrote the senators.

The senators pointed to the long-standing problem of private equity’s role in healthcare – which prioritizes short-term profit maximization over considerations of quality of care and patients. While the small ICFs owned by KKR BrightSpring in California, Indiana, Louisiana, North Carolina, Ohio, Texas and West Virginia accounted for just 16% of ICFs, they accounted for a whopping 40% of serious citations in those states. That BuzzFeed The research found that nurses and other caregivers had alarmingly high turnover rates, uncompetitive salaries and inadequate training.

BrightSpring’s and KKR’s failure to protect ICF patients and efforts to maximize profits also resulted in preventable injuries and deaths. In West Virginia, state officials accused BrightSpring of ignoring multiple warnings that resulted in at least one preventable death and ordered BrightSpring to stop accepting new patients, eventually shutting down 20% of the organization’s homes in the state. Facility managers said they were under pressure to keep houses full, even with patients they couldn’t care for, to maximize profits.

Senators urged KKR to pocket its profits instead of improving conditions for patients. BrightSpring’s KKR-controlled board of directors has saddled the company with $1.1 billion in debt, and BrightSpring has paid more than $135 million annually in interest on its loans. Meanwhile, BrightSpring CEO Jon Rousseau doubled his salary to $1.6 million in 2020. Now, KKR and BrightSpring executives, who oversaw the company’s post-acquisition operations, are facing another payday. In October 2021, the company filed for an IPO in a $100 million initial public offering, citing its access to a “combined $1.5 trillion market opportunity.”

“We have long been concerned about the detrimental impact of private equity on healthcare and patient care. Her company illustrates how private equity firms exploit the healthcare industry to squeeze profits at every stage. Private equity has spread into healthcare services from rural hospitals to nursing homes and hospice centers to healthcare billing management and collections systems, compounding existing problems such as unexpected medical bills, inadequate training and a lack of oversight and due process.” continued the senators.

Senators asked KKR to answer a series of questions about how the BrightSpring Health acquisition has impacted patients by June 2, 2022.

Read the full letter here.

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