The Impact of Private Equity on Nursing Home Care: Recommendations for Policymakers

April 30, 2021

The COVID-19 pandemic has both highlighted the importance of quality care in nursing homes, and exposed the loopholes in federal and state regulations that allow private equity companies to exploit patients for profit. Private equity firms commonly use several strategies that obscure accountability and prioritize investor profits at the expense of nursing home patients and their families. These strategies include legal restructuring, debt financing and real estate sales, and vertical integration. Because the majority of money that flows through nursing homes is from taxpayer-funded public health programs, the US government has an obligation to ensure these funds are used as intended: to provide quality care for the elderly and infirm.

In “The Impact of Private Equity on Nursing Home Care: Recommendations for Policymakers,” Melea Atkins discusses the extractive and exploitative business model used by private equity firms in nursing homes. Atkins uses recent data and case studies from the COVID-19 pandemic to demonstrate how private equity ownership of nursing homes has resulted in a lower quality of patient care and increased mortality rates. To counter this problematic trend, Atkins recommends banning private equity firms from owning and operating nursing home facilities, and instituting a five-year deadline for private equity to divest from the industry. Doing so will help re-center patients and families––not profits––in the nursing home industry.