Real estate investment trust (REIT) investment in nursing homes has been linked to an increase in some clinical staff hours per resident day – specifically a 2.15% and 1.55% percent bump in licensed practical nurse (LPNs) and certified nursing assistant (CNAs) hours, respectively.
Registered nurse (RN) hours, on the other hand, decreased 6.25% in the two to three years following REIT investment.
That’s according to a new study published in Health Affairs on Wednesday; to date, there has been no peer-reviewed evidence evaluating the impact of REIT investment on nursing home staffing, according to authors of the study.
“REIT nursing homes may substitute relatively inexpensive LPN and CNA care in place of more expensive RN care,” the authors said in a statement. “More investigation is needed to clarify how changes in staffing after REIT investment affect nursing home quality of care.”
Generally, larger deals resulted in increases to LPN and CNA staffing, and no changes to RN staffing. Smaller deals appeared to replace RN staffing hours – more expensive, skilled care – with less skilled, less expensive clinicians, authors wrote.
Still, full transparency of ownership relationships would help support quality assurance, according to the study. The findings come amid a push from the Biden administration to bring greater transparency to nursing home ownership, as well as a potential federal minimum staffing mandate.
Skilled Nursing News on Wednesday reached out to several REIT leaders, who were unable to respond as of press time.
Calls for more data
Authors admitted that nursing home ownership is complex and in turn, monitoring quality as it relates to staffing levels needs to take these structures into account.
“Quality assurance to date has focused on the facility-level operator and not on the potential labyrinth of financial ties between institutional investors and nursing homes,” authors wrote. “Similarly, information available on Nursing Home Compare and the CMS five-star rating system is limited to the individual facility.”
Licensure and oversight agencies, including state survey agencies, could benefit from a readily available list of facility owners and affiliated entities.
While Nursing Home Compare provides limited ownership information, “full longitudinal data” on ownership isn’t readily available, according to the study. What’s more, the existing data on Care Compare isn’t regularly audited.
“We found that the provider enrollment, chain, and ownership system only documented a REIT as an indirect owner if the operator and REIT were in a taxable REIT subsidiary structure,” authors said.
Those in a triple-net lease agreement were never documented. Authors suggested CMS identify indirect owners in triple-net lease arrangements, as they can potentially provide support to the operator.
Conversely, the study also pointed out the burden that “expensive” leases can place on facility operators, which could lead to cost cutting measures.
In the end, study authors believe ownership information can track which entities are responsible for care and which are benefiting from Medicare and Medicaid reimbursement, along with favorable tax policies.
“Private equity acquisitions of nursing homes have received considerable attention from policymakers, yet REITs have a larger presence in the industry and have received less attention,” authors wrote.
An estimated 5% of nursing homes are tied to private equity ownership; about 12% have REIT ownership, according to the study.
REIT leaders in the nursing home sector — including Rick Matros, CEO of Sabra Health Care REIT (Nasdaq: SBRA), and Eric Mendelsohn, CEO of National Health Investors (NYSE: NHI) — have expressed support for ownership transparency measures. They point out that their companies are publicly traded and therefore already subject to greater disclosure rules than private equity.
Robert Tyler Braun, Lawrence Casalino, Hye-young Jung, Rahul Fernandez, and Mark Unruh with Cornell University served as authors of the study, along with Dunc Williams, Medical University of South Carolina and David Stevenson with Vanderbilt University.
Medicare cost report data between 2013 and 2019 was merged with a homegrown database of REIT investments in nursing homes for findings.
Companies featured in this article:
Cornell University, Health Affairs, Medical University of South Carolina, NHI, Sabra Health Care REIT, Vanderbilt University
