Fierce Healthcare reported a well-known truth: Greed kills. Nursing homes owned and operated by vulture capitalists provide inadequate staff causing abuse and neglect of vulnerable adults nationwide. Residents at PE-acquired nursing homes also generate higher Medicare costs for more profit.
Apologists claim that the industry needs private equity capital to operate facilities but that is simply not true. Most facilities operate without the capital from private equity. New nursing home construction loan closings increased sixfold during the first quarter of the year compared to the same time period in 2021. Despite staffing issues and inflationary costs, participating lenders said there were no foreclosures in the first quarter of 2022.
Private equity often bifurcates the assets into real estate and operations. The greedy chain owner/operator divert taxpayer funds to related shell companies offering worthless services instead of increasing staffing to safe levels.
SNFs can attract and retain more staff with competitive wages and flexible hours. Hourly rates have increased for critical positions like the certified nursing assistant (CNA), licensed practical nurse (LPN) and registered nurse (RN). The 2022-2023 Hospital & Healthcare Compensation Services (HCS) Nursing Home Salary & Benefits Report stated that increases ranged 9.38% and 11.15% this year.
Non-clinical staff including dietary aides, housekeepers, kitchen staff and recreation departments are not getting similar wage increases.