If your loved one’s nursing home has private equity ownership, you might want to consider moving to a new facility. Even the best nursing homes struggle to provide the daily assistance and medical needs of elderly residents. However, studies have shown that when nursing homes are acquired by private equity, the quality of care for the elderly goes drastically downward as the owners’ profits go upward.

In a perfect world, money should not be an object when we are talking about our health and happiness in our golden years. The reality is that 24/7 nursing home care is extremely expensive, and the cost of that care is beyond the reach of all but the wealthiest citizens. Fortunately, the government programs of Medicaid and Medicare are there to support us when need them to cover the cost of nursing home care. Ideally, every penny of those tax dollars would go to our care and well-being. Again, we do not live in a perfect world. 

Since the 1980s, there has been a rapid trend in which independent and nonprofit nursing homes have been acquired by private equity firms. It is not hard to guess what is driving this investment. There is an enormous customer demand for elder care as the Baby Boomer generation reaches senior citizen status. It’s also a recession-proof cash cow. There are roughly 15,500 nursing homes in the United States, and they can count on tens of billions of taxpayer dollars from Medicare and Medicaid.

Unfortunately, these private equity firms are driven by profit, and the only reliable way to drive up revenue is to cut costs. That means reducing the availability and quality of care.

Here are some of the highlights, or lowlights, of the influence of private equity on nursing home care, as reported in a recent report by the White House.

1.) A recent study found that residents in nursing homes acquired by private equity were 11.1% more likely to have a preventable emergency department visit. 

2.) One working paper examining 18,000 nursing home facilities over a seventeen-year period found that private equity ownership increased excess mortality for residents by 10% … that suggests an additional 20,150 lives lost as a result of private equity ownership.

3.) Another study found that private equity-backed nursing homes’ COVID-19 infection rate and death rate were 30% and 40% above statewide averages, respectively. 

What to Do About Bad Nursing Homes

Even with federal and state-level oversight, nursing homes do not have much financial incentive to provide a safe environment for residents. Many nursing homes repeatedly violate government standards, leading to the misery, injury, and even death of residents, yet the fines that are imposed are too low to provide a deterrent. If you or a loved one suspects nursing home negligence, through abuse or neglect, your most effective option is often legal action. At Brown & Barron, we have expertise with nursing home abuse and neglect cases, and we can help get the truth, get justice for your loved one, and send a forceful message to nursing homes that substandard care will not be tolerated. For a free consultation, please call Brown & Barron at (410) 698-1717 or contact us online by clicking here.