Quality of care decreases with private ownership of nursing homes, study finds

Retirement homes acquired by private equity firms have seen an increase in emergency room visits and hospitalizations among long-term residents and rising Medicare costs, according to a new study from investigators at Weill Cornell Medicine. The results, published Nov. 19 in the JAMA Health Forum, suggest that the quality of care declined when private equity firms took over the facilities.

Our results indicate that facilities owned by private equity firms provide lower quality long-term care. These residents are among the most vulnerable in our healthcare system, and a lack of transparency in ownership makes it difficult to identify facilities with private holdings, which consumers may be interested in knowing. “

Dr Mark Unruh, Associate Professor of Population Health Sciences, Weill Cornell Medicine

Private equity investments in nursing homes have skyrocketed in recent years, under $ 750 billion in healthcare deals between 2010 and 2019. According to the research team, 5% of Nursing homes in the United States are owned by private equity firms. 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 profits in the short term could lead privately owned nursing homes to cut staff, services, supplies or equipment, which may have a negative association with the quality of care, said. Dr Unruh, adding that these companies are looking for returns of 20 percent or more.

Using a new national database developed by Dr Braun for the study, investigators at Weill Cornell identified 302 nursing homes acquired by private equity firms between 2013 and 2017, with a total of 9,632 long-stay residents. Investigators compared the results of residents in privately owned facilities with the results of residents of 9,562 other for-profit nursing homes, which included 249,771 long-stay residents during the study period.

For quality of care indicators, the team looked at emergency room visits for outpatient care (ACS) and hospitalizations. These episodes, such as complications from diabetes or heart failure, can be largely avoided with good management of the disorders.

Investigators found that residents of privately owned facilities were 11% more likely to have an ACS emergency visit and 8.7% more likely to be hospitalized. As a result, they had Medicare costs (Medicare covers emergency room visits and hospitalizations) that were 3.9% higher, or $ 1,080 more per year, per patient than the residents of for-profit nursing homes without private participation.

“The majority of revenues that fund care in nursing homes come from public sources,” Dr Unruh said. “After acquiring equity, the quality of care declines and Medicare spending increases for residents, and this should be a concern for policy makers.”

The study deserves further discussion not only on the implications of the growth of private equity firm acquisitions, Dr Unruh said, but also on the importance of making property information available on enabling websites. for the public to compare nursing home providers.


Journal reference:

Braun, RT, et al. (2021) Association of Private Equity Investment in US Nursing Homes with quality and cost of care for long-term residents. JAMA Health Forum. doi.org/10.1001/jamahealthforum.2021.3817.

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