Categorized | Family Care, Features, Pushback

Nursing Facilities And Predatory Owners

Assisted Living, nursing

It wasn’t just Covid that was ravaging nursing homes. It was the owners, too. Private equity firms have been buying up nursing homes, and these private equity-owned nursing homes have worse outcomes for their residents.

By Al Norman

There are more than 15,500 Medicare- and Medicaid-certified nursing facilities in America today, with more than 1.4 million residents. One thing we learned from the Covid pandemic was that these facilities became the death address for roughly 25 percent of all the Covid fatalities in our country over the past two years.

Roughly 200,000 residents and staff have died from Covid inside nursing facilities. Politicians from your hometown, on up to the highest levels nationally, have noticed the unfortunate correlation between nursing facilities and Covid deaths. At the end of February, 2022, the White House issued a press release/fact sheet titled: “Protecting Seniors by Improving Safety and Quality of Care in the Nation’s Nursing Homes.”

 “Despite the tens of billions of federal taxpayer dollars flowing to nursing homes each year,” the Biden Administration press statement said, “too many continue to provide poor, sub-standard care that leads to avoidable resident harm.” The White House noted that nursing facility non-compliance with Federal guidelines was “widespread.” A Government Accountability Office (GAO) report found that based on Medicare and Medicaid surveys conducted between 2013 to 2017, 82 percent of all nursing facilities had an infection prevention and control deficiency.

It wasn’t just Covid that was ravaging nursing homes. It was the owners, too. Private equity firms have been buying up nursing homes, and these private equity-owned nursing homes have worse outcomes for their residents.

According to the Biden Administration, private equity firms’ investment in nursing homes exploded from $5 billion in 200 to more than $100 billion by 2018 — 5 percent of all nursing homes are now owned by private equity firms. “Too often, the private equity model has put profits before people,” the White House says, “a particularly dangerous model when it comes to the health and safety of vulnerable seniors and people with disabilities.”

 According to a 2021 study in the Journal of American Medicine, resident outcomes are significantly worse at private equity-owned nursing facilities. Private equity ownership of nursing homes was associated with higher costs and increases in emergency department visits and hospitalizations for ambulatory sensitive conditions. Another study by Americans for Financial Reform found that in private equity-backed nursing facilities, COVID-19 infection rates and death rates were 30 percent and 40 percent above statewide averages, respectively.

patient-centered, Social Security, ageist, nursing, COVID, Trump, vaccineThe Biden Administration says it’s committed to ensuring that “taxpayer dollars go toward the safe, adequate, and respectful care seniors and people with disabilities deserve — not to the pockets of predatory owners and operators who seek to maximize their profits at the expense of vulnerable residents’ health and safety.” The federal Center for Medicare and Medicaid Services (CMS) is promising it will improve the public transparency of facility ownership and safeguard nursing home residents: “For too long, corporate owners and operators have not been held to account for poor nursing home performance. CMS will improve the public transparency of facility ownership and safeguard nursing home residents.”

One of the initiatives the White House is pursuing is an investigation of the growing role private equity investors are playing in the nursing facility sector. “Published research increasingly indicates that facility ownership by investment groups leads to worse outcomes while costing taxpayers more,” the White House says, “particularly as these owners have sought to cut expenses at the cost of patient health and safety, including during the COVID-19 pandemic.” Federal agencies will examine the role of private equity, real estate investment trusts (REITs), and other investment ownership in the nursing home sector and will “inform the public when corporate entities are not serving their residents’ best interests.”

If you visit the Nursing Home Compare website, you will find a 9 page “Nursing Home Checklist” which provides helpful questions to ask about safety and care, appearance, resident’s rooms, menus and food, staffing, dementia care, and prevention of abuse.

You can also search a facility’s inspection results, Covid vaccination rates, and quality measures. But there is nothing available about who owns the facility — whether it’s a non-profit facility or owned by a private equity firm. There is no financial data on the health of its fiscal operations, staffing expense as a percentage of total operations, net profit, etc. The ownership and the financial status of the facility are the true “bones” of the operation.

When you visit a facility, ask for a copy of their most recent financial audit, and for a list of who the owners are — and how long they have owned it. The nice rug in the entryway and the baby grand piano in the corner may catch your eye, but if you want to know who runs the place, and what percentage of its budget goes to direct care staffing, you will have to dig deeper into its corporate structure. If the facility is reluctant to share such information, search elsewhere for a facility to care for your loved ones.

Al Norman was an executive in the field of elderly home care in Massachusetts for nearly four decades. He has been writing opinion columns for 50+Life since the 1980s.

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