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Private Equity

Ownership

Do private equity ownership affect COVID numbers?  Skilled Nursing News reported on a recent study. The authors published the study on October 28 in JAMA Network Open  The study examined 11,470 nursing homes in the U.S.  However, the researchers rely on self-reported data which is not reliable.  Private equity in SNFs is under scrutiny. Several lawmakers demanded answers from firms on their ownership of nursing homes in the last months of 2019.

This study shows that nursing homes owned by private equity (PE) firms had COVID-19 outcomes comparable to facilities with other ownership structures. Several other studies examine various factors that lead to worse COVID-19 outbreaks in facilities. The variables included staffing levels, number of cases, and COVID-19 deaths.

The team measured the self-reported number of COVID-19 cases and deaths, as well as deaths by any cause, per 1,000 residents.  The study included supplies of personal protective equipment (PPE); and staffing shortages.
“It is possible that differences in rates of testing among facilities may have obscured differences in COVID-19 cases and deaths, but this would not have affected estimates of deaths by any cause.”

Results

The 11,470 facilities were broken down as follows:

  • 7,793, or 67.9%, were for-profit
  • 2,523, or 22%, were non-profit
  • 511, or 5.3%, were government-owned
  • 543, or 4.7% were PE-owned

“PE-owned nursing homes did not have significantly higher self-reported rates of COVID-19 cases than non-profit or for-profit nursing homes but had 35.5 more cases per 1000 residents than government-owned facilities,” the authors wrote.

However, PE-owned facilities were less likely than for-profit, non-profit or government owned homes to have a 1-week supply of various kinds of PPE. PE-owned nursing homes fell short on supplies of medical gowns; gloves, and eye protection.

Although PPE issues for nursing homes as a whole have improved since the start of the pandemic. Facilities have reported shortages of some kind. The for-profit national chains cut corners. They often safe money with unsafe staffing. The for-profit chains spend and siphon money to related real estate and management companies.

The industry needs more resources to provide safe staffing. Our loved ones are worth it.