Private Equity Ownership

Profits over People

Unfortunately, private equity ownership in nursing homes soared in recent years. As an attorney against long-term care facilities over the last 25 years, the type of management and ownership clearly affects the quality of care for residents. The pressure to generate high, short-term profits causes private equity-owned nursing homes to reduce staffing, services, supplies or training. For-profits cut corners.

Now, studies prove it. A published national cohort analysis proves private equity firms provide less staff, less care, and suffer more neglect and abuse. Weill Cornell Medicine investigators saw an increase in emergency room visits and hospitalizations among long-stay residents. Researchers saw an 11.1% relative increase in emergency department visits and an 8.7% relative increase in hospitalizations. The data also shows an increase in Medicare costs for nursing homes acquired by private equity companies.

Researchers wrote in JAMA Health Forum:

“This cohort study suggests that [private equity] firm–owned nursing homes provided lower-quality long-term care than other for-profit homes based on two widely used quality measures and were associated with higher total per-beneficiary Medicare costs.” 

The findings, published Nov. 19 in JAMA Health Forum, suggest that quality of care declined when private equity firms took over the facilities. Dr. Mark Unruh is an associate professor of population health science at Weill Cornell Medicine. He concluded:

“Our findings indicate that private equity firm-owned facilities offer lower quality long-term care. These residents are among the most vulnerable in our health care system and a lack of transparency in ownership makes it difficult to identify facilities with private equity ownership, which consumers may be interested in knowing. The majority of revenue that pays for care in nursing facilities comes from public sources. After private equity acquisition, quality of care declines and Medicare spending goes up for residents, and that should be a concern for policymakers.”