Midsize for-profit nursing home chains, which make up about 40% of the industry, are at the center of investigations by news organizations whose analysis of new government data shows troubling statistics for quality.
The Conversation is the latest to publish its analysis scrutinizing for-profit nursing home ownership.
The Conversation’s article published Thursday unveils instances of neglect, abuse, and financial exploitation within midsize skilled nursing chains.
The investigation revealed a pattern of cost-cutting, low staffing, poor quality of care, and financial fraud, including siphoning money from homes through complex corporate structures.
“Analyzing newly released government data, our investigation found that these problems are most pronounced in … midsize chains that operate between 11 and 100 facilities,” The Conversation article states. “This subsection of the industry has higher average fines per home, lower overall quality ratings, and are more likely to be tagged with resident abuse compared with both the larger and smaller networks.”
Midsize chains, comprising 39% of all nursing facilities, are found to have higher fines, lower quality ratings, and increased instances of abuse compared to larger and smaller chains. Such chains operate 11 of the 15 most-fined facilities, according to The Conversation.
Private investors, attracted by the perceived profitability of the sector, acquire underperforming homes and maximize profits by minimizing staffing and quality of care while exploiting regulatory loopholes, The Conversation reported.
The article also delved into the history of for-profit nursing homes, tracing their expansion since the introduction of Medicare and Medicaid in 1965, noting the clash between publicly traded chains’ pursuit of profit and the need for quality care.
Private equity investors exacerbated these issues by acquiring struggling chains, further diminishing transparency and oversight.
The report cited research that showed that for-profit homes, especially those owned by private equity firms, have lower staffing levels and quality compared to nonprofits and government-run facilities, leading to increased mortality and suffering among residents.
The investigation also highlighted the complexity of ownership structures within nursing home chains, with investors employing convoluted systems to obscure accountability and maximize profits.
A recent KFF article also found that private equity groups and real estate investment trusts are increasingly acquiring struggling not-for-profit nursing homes in the United States. This trend has accelerated recently, with over 900 not-for-profit nursing homes changing hands since 2015, more than half of which were acquired by for-profit operators.
The KFF article reported that for-profit companies acquiring nursing homes claim they can address staffing shortages and improve care quality by offering better wages, benefits, and career opportunities for employees, yet critics argue that for-profit ownership exacerbates existing challenges in the nursing home industry, including inadequate Medicaid rates and high labor costs, calling instead for for increased government support and regulation to ensure quality care for nursing home residents, regardless of ownership structure.
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