Many nursing homes are owned and operated by for-profit businesses. In recent years, there has been an alarming uptick in the number of nursing homes specifically owned by private equity firms.
Private equity firms are somewhat notorious for pumping revenue out of previously successful businesses and then shutting them down just for short-term financial gain. Therefore, those concerned about nursing home care standards may worry about how private equity firms might impact nursing home care. Recent research indicates that private equity ownership may result in worsening care standards.
What have researchers uncovered?
A report authored by professionals consulting for the American Association of Retired Persons (AARP) found several negative trends regarding nursing homes operated by private equity firms. Researchers found that facilities owned by private equity firms tend to bill roughly $1,000 more per resident.
There were more reported hospitalizations for issues that could have responded to timely outpatient care. The researchers also found that private equity ownership caused a 13% decrease in staffing on a per-resident basis. That led to 33 fewer minutes of personal care per day per resident. The overall quality rating of the facilities also tends to decline by roughly 10%, according to data collected between 2019 and 2024.
Unfortunately, decreased investment in patient care and staffing can lead to negligence and poor outcomes for vulnerable older adults paying thousands of dollars per month for a room in a facility. Family members who recognize that private equity ownership has compromised the standard of care at a facility and led to the injury of their loved one may have grounds to take legal action.
Pursuing a nursing home negligence lawsuit (whenever appropriate) can undermine the profit incentive that leads to private equity firms acquiring nursing homes and intentionally undermining the standard of care at those facilities.
