Ownership Maze

The Skilled Nursing News had an article about the difficulty in determining the real owners and operators of a nursing home chain. Identifying the difference between related entities including landlords, lenders and operators is impossible. Dr. Atul Gupta, an associate professor at Wharton, has found that understanding ownership arrangements for nursing homes is like navigating a “maze.”

Industry experts and consumer advocates want transparency and disclosures so reimbursement, revenue, and profits provide quality of care.

Nursing home ownership structures should be transparent. Sunshine is the best disinfectant. How can you hold people accountable without identifying them?

The growth of private equity in health care is a major problem. Nursing care is not a product or but a social good. Private equity turned the industry into a financial commodity to exploit and leverage. Deals reached $105.3 billion over 1,171 deals in 2020 compared to 449 deals for $43.2B in 2010.

“In the context of nursing homes, I think the evidence is relatively consistent that for-profit ownership tends to produce lower quality outcomes for patients than nonprofit ownership,” Gupta said.