Lives Lost

Nationally, many nursing homes are owned by groups of out-of-state and unknown investors who have formed limited liability corporations to avoid accountability and operate each of their facilities. The facility owners are affiliated with other for-profit vendors that sell their services — such as management, staffing and resident therapy — to the nursing homes. Such relationships with related entities increase costs since they provide a financial incentive for owners to siphon money from the taxpayer-supported facilities into the coffers of their related entities.

For just one example, the nursing home chain Life Care Centers reported $1.2 billion in payments to various companies for management, staffing, insurance and therapy. All of those companies are owned or controlled by Life Care.

The National Consumer Voice for Quality Long-Term Care reported that care facilities’ payments to their for-profit affiliates greatly exceed the cost of the actual services provided. The organization noted that while the nursing home chain Pruitt Health reported to the government related-party costs of nearly $482 million over three years, it paid those same affiliates $570 million.

According to the federal government, roughly 70% of all nursing homes nationwide are for-profit facilities. The National Bureau of Economic Research concluded that that private equity ownership increased the short-term mortality of Medicare patients by 10% — suggesting 20,150 lives have been lost due to private-equity ownership over a 12-year period.