25000 Country Club Blvd. Suite 255, North Olmsted, OH 44070

Studies Show Private-Equity-Owned Nursing Homes Underperform, Overspend

July 26, 2022

Knowing who owns your local nursing home matters because it could affect your health, according to recent studies that examine the effects of private-equity ownership on nursing homes.

Private-equity acquisition of nursing homes was associated with higher Medicare costs and increases in emergency department visits and re-hospitalizations, according to a Journal of American Medicine Association article published in 2021. The article calls for more oversight of private equity-owned nursing homes.

The White House has cited this study, along with several others, in its recent fact sheet titled “Protecting Seniors by Improving Safety and Quality of Care in the Nation’s Nursing Homes.” Private-equity ownership is on the rise, causing concern from industry experts and regulating bodies alike.

“Too often, the private equity model has put profits before people—a particularly dangerous model when it comes to the health and safety of vulnerable seniors and people with disabilities,” The White House fact sheet states.

Among the sources citing poor outcomes from private-equity-owned nursing homes was a working paper published by the National Bureau of Economic Research (NBER). The paper’s findings state that of the 18,000 nursing home facilities studied over a seventeen-year period, private-equity ownership increased excess mortality for residents by 10 percent. “That suggests an additional 20,150 lives lost as a result of private equity ownership,” the paper states.

JAMA, NBER, and Americans for Financial Reform have all recently published articles and working papers sharing several other data findings that indicate private-equity-owned nursing homes underperform when compared to for-profit nursing homes not associated with private equity. These findings include:
  • 50 percent increased use of antipsychotics at private-equity-owned nursing homes (source: JAMA)
  • Private-equity-owned nursing homes had a COVID-19 infection rate and death rate that were 30 percent and 40 percent above statewide averages, respectively (source: Americans for Financial Reform)
  • Nursing homes owned by private-equity firms had a 3 percent decrease in hours of frontline nursing staffing (source: NBER)
  • Residents at private-equity-owned nursing homes were 11.1 percent more likely to have a preventable emergency department visit (source: JAMA)
  • Private-equity-owned nursing home residents were 11.1 percent more likely to experience a preventable hospitalization (source: JAMA)

These negative outcomes aren’t just affecting peoples’ health. They are affecting their pocketbooks too. There has been increased taxpayer spending of 11 percent per resident in private-equity-owned nursing homes, according to the NBER.

“Private equity (PE) investment in US health care has grown dramatically, with $750 billion in deals from 2010 to 2019,” according to JAMA. “These investments have concerned policy makers because PE firms often create complicated asset, management, and operating structures that may avoid transparency and accountability in patient care.”

While private equity continues to acquire more and more nursing homes throughout the country, experts say it is important for consumers to identify ownership and choose nursing homes that are owned by entities that are not dependent on private-equity money.

“Private equity investors are acquiring buildings at premium pricing and, subsequently, drastically cutting expenses— namely labor— in order to attain unrealistically high profit margins,” said Joe Altieri, Chief Governance Officer of Foundations Health Solutions, a large, nursing home outfit based in Ohio. “Foundations Health is not dependent on private equity to support our operation. It allows us to invest in our physical plants, making more private rooms, and having higher staff-to-resident ratios.”

Foundations Health Solutions, the state of Ohio’s largest nursing home provider, owns nearly 60 of the state's 800-plus nursing homes. The company reports higher-than-average Medicare star ratings and lower re-hospitalization rates than its private-equity-owned competitors, Altieri says.

“It’s more than just business for us. We live and work where we own these nursing homes,” Altieri said. “We do the right thing because we answer to our residents and their families. We don’t answer to investors.”

Who owns your nursing home matters. Foundations has proudly served local communities for over two decades. With a Culture of Care that prioritizes finding individuals that know what it means to put the resident first, Foundations' teams offer superior care. If you are looking for a quality skilled nursing facility in your neighborhood, click the button below to find a Foundations location near you.

Foundation Health Locations

News & Events

Spreading The Culture of Care
Foundations' Dietary Teams are serving up appreciation one facility at a time!

Empowering Caregivers: An Inside Look at Our Annual Nurse Skills Fair
At Foundations we never stop learning and honing our skills!

LTC Heroes Podcast Features Lura Sandy, Regional Administrator of Foundations
Listen to FHS's very on Lura Sandy on the LTC Heroes Podcast!

Foundations Health Welcomes New Director of Vibes
Introducing Dean Palombaro to the FHS family!

The Couples of Foundations Health
The love we see between our residents and their spouses moves us all!

Help Us Name Our Newest Facility!
FHS is exanding our family of facilities!

Foundations Health Moves to In-House Therapy
Listen to the leaders of Foundations Health's transition to in-house therapy discuss how this change came to be!

Page 1 of 18 (179 items)Prev[1]2Next