Private equity firms purchase all kinds of businesses. Sometimes, because of the complicated nature of these purchases and varying legal requirements, it’s not readily apparent – or even easy to determine – that they’re the true owners. They can hide behind names that don’t reflect the true ownership.
Private equity firms have taken a growing interest in nursing homes. One recent study estimated that they own somewhere between 5% and 13% of nursing homes throughout the country. The actual number hasn’t been determined because of these firms’ ability to hide their ownership. However, it’s believed to be closer to the higher end of that estimate.
Private equity ownership of nursing homes can be problematic, which is why it’s come under scrutiny by lawmakers, regulators, the media and others. In some cases, private equity firms have used nursing homes as a way to acquire income from Medicare and then file for bankruptcy. If one of these firms owns a lot of facilities in a particular area, this can leave people in these areas with few, if any, nursing home options.
What about the quality of care?
Is the care provided in nursing homes owned by private equity investors worse than that of facilities not owned by private equity investors? A study of nursing homes in another state found that private equity-owned facilities had:
- Much lower overall performance ratings
- Worse inspection results
- Lower ratings for nurse staffing
- More citations for abuse
The report concluded, “Multiple studies confirm the harmful effects that private equity ownership has on nursing homes, and the increased risk placed on residents and workers.” The federal government is unlikely to improve the situation. The report notes that the first Trump administration revised federal protocols “to discourage regulators from levying fines against nursing homes” even when negligence or wrongdoing resulted in fatalities.
It’s crucial for families to thoroughly research nursing homes and other care facilities before choosing one for a loved one. Besides determining the true owners, it’s important to look at all data available, including ratings and reviews.
Those who have concerns about the care their loved one is receiving (or not receiving) shouldn’t hesitate to talk with the facility’s management. If harm has already been done, it’s important to get legal guidance.
