Private equity ownership of nursing homes linked to lower quality of care, higher Medicare costs

 

No surprise.

 

https://www.eurekalert.org/news-releases/935629

 

 News Release 19-Nov-2021
Peer-Reviewed Publication
Weill Cornell Medicine

 

Nursing homes acquired by private equity companies saw an increase in emergency room visits and hospitalizations among long-stay residents and an uptick in Medicare costs, according to a new study from Weill Cornell Medicine investigators. The findings, published Nov. 19 in JAMA Health Forum, suggest that quality of care declined when private equity firms took over the facilities.

“Our findings indicate that private equity firm-owned facilities offer lower quality long-term care,” said Dr. Mark Unruh, an associate professor of population health science at Weill Cornell Medicine. “These residents are among the most vulnerable in our health care system and a lack of transparency in ownership makes it difficult to identify facilities with private equity ownership, which consumers may be interested in knowing.”

Private equity investment in nursing homes has soared in recent years, as part of $750 billion in health care deals between 2010 and 2019. An estimated 5 percent of nursing homes in the United States are owned by private equity firms, according to the research team, which included Dr. Lawrence Casalino, Dr. Hye-Young Jung, Dr. Robert Tyler Braun, and Weill Cornell Medical College alumnus Dr. Zachary Myslinski ’21.

The pressure to generate high, short-term profits could lead private equity-owned nursing homes to reduce staffing, services, supplies or equipment, which may have an adverse association with quality of care, Dr. Unruh said, adding that such firms seek annual returns of 20 percent or more. 

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