Oversight of Private Equity
Ways and Means Committee
The Ways and Means Committee had an incredible hearing about private equity ownership in the nursing home industry. The hearing, “Examining Private Equity’s Expanded Role in the U.S. Health Care System” included witnesses calling for transparency and regulatory oversight of the private-equity investors.
New York University assistant finance professor Sabrina Howell testified during the hearing. She proved that private-equity ownership is linked to declines in staffing, more antipsychotic medication use and increases in the amount billed to Medicare.
“Going to a PE-owned nursing home increases the short-term probably of death by about 10% — implying over 20,000 lives lost due to PE-ownership of nursing homes during about a 10-year period.”
Sen. Kirsten Gillibrand (D-NY) previously cited research by the National Bureau of Economic Research that found private equity investment in nursing homes had grown twentyfold in 18 years — from $5 billion in 2000 to $100 billion in 2018.
Ernest Tosh, an attorney and nursing home data analyst, also testified about a lack of transparency within the industry. He accused chains of “highly manipulating” their financial documents to hide funds through use of related parties.
“The fact is we do not know whether any one chain is making money or losing money. We don’t know if an individual nursing home is highly profitable or on the verge of bankruptcy,” he told lawmakers.
“How many grandmothers and grandfathers died because profits were prized above lives, with our taxpayer dollars funding this?” Rep. Bill Pascrell, chair of the House Ways and Means Subcommittee on Oversight, said.
“Research has shown nursing home buyouts are linked with higher patient-to-nurse ratios, lower quality care, declines in patient outcomes, weaker inspection performances, and increased mortality rates,” Pascrell said. “That’s a horror. Think about it: Our most vulnerable.”
Finance Committee
Adelina Ramos bravely testified to the Senate Finance Committee hearing about her experience as a certified nursing assistant. Senator Warren posted the virtual interchange with Ramos and Gifford to her Twitter feed. Ramos testified:
“It was horrifying. We begged management for more staff for each shift, but they said they couldn’t find anyone. And so our residents and staff kept getting sick and dying.”
“I don’t think they [owners] should make millions of dollars in bonuses…. we could have put in a higher wage so we could have actually attracted more staff.”