While the calls for nursing home ownership reform tied to private equity (PE) have grown louder from the current administration and other federal figureheads, industry leaders say such endeavors are old hat — investors are already leaving the SNF sector in favor of home health and private-pay senior housing.

That’s according to an article published by Forbes on Wednesday. It’s not only private equity investors either; insurance companies and health systems are selling their SNF assets in favor of home health, Forbes Senior Contributor Howard Gleckman said.

Congress is “two beats behind” what is really happening in the sector, according to Gleckman. The Biden administration sought more timely, public information about who owns and operates nursing homes as part of its sweeping reforms announced in February – but it’s just a start, Gleckman added.

Big operating chains, publicly-traded real estate investment trusts (REITs), and PE largely opted out as nursing home margins shrank – all seeking  “greener pastures,” Gleckman wrote, referring to home care.

Given this shift, Congress and the Biden administration should be “cracking down” on private equity involvement in home health care, not nursing homes, according to Gleckman.

The article points to the relationship between REIT Welltower Inc. (NYSE: WELL) and nursing home giant Genesis HealthCare as a prime example of the trend. Once Genesis suffered major financial blows early on in the pandemic, Welltower severed its SNF leases. Skilled nursing facilities only account for 5% of the REIT’s portfolio today.

The trend was echoed in part during a virtual panel with capital providers and hosted by Skilled Nursing News. Jonathan Slusher, partner and head of senior living and health care at real estate private equity firm the Northwind Group, specifically pointed to hospital systems divesting their SNF assets.

“They’re good at surgery, but they’re not good at running a long-term care building, and they know it,” Slusher said during the panel. “They’re willing to sell their portfolios and also partner with the for-profit operators that they’re selling it to, and they think that’s a very good coordination for them.”

Earlier this month New Jersey-based hospital system Hackensack Meridian Health agreed to sell off a majority of its long-term care facilities to Complete Care Management, a family-owned and operated New Jersey-based provider.

The Forbes article cited 2017 as the “tipping point” for large private equity involvement in the SNF sector, most notably with The Carlyle Group severing ties to nursing home chain HCR ManorCare.

From 2017 on, private equity ownership dropped from 11% to 4%, Forbes reported, pulling from SNN reporting and a study published by experts at the UC Berkeley School of Public Health and the American Antitrust Institute.

Buyers aren’t “mega investment firms” either, according to the Forbes article. Mid-size owner/operators are more likely to purchase five or 10 facilities in select markets.

It’s likely some, but not all, of these mid-size companies are “shady operators,” Gleckman wrote, contracting a diverse set of services to third-party businesses — like pharmacy and supplies.