The Harmful Effect of Private Equity Ownership in Nursing Homes

The Harmful Effect of Private Equity Ownership in Nursing Homes

It’s hard to say that any good things have come from this pandemic, but we can’t overlook the new attention now given to nursing homes and how they are managed. Nursing home management has been under the microscope as family members realize that conditions may not be what they seem, and facilities might be more motivated by profit than the actual care of the people in their care. This has become especially evident in nursing homes managed under Private Equity Ownership. 

Private Equity Ownership

Private Equity Ownership of a company that “is composed of funds and investors that directly invest in private companies, or that engage in buyouts of public companies, resulting in the delisting of public equity.” Groups like Formation Capital, Portopiccolo Group, Plum Healthcare & GI Partners, and Tryko Partners are some of the investing firms that have an investment of thousands of nursing home and skilled care beds across the country. 

The Problem

Research and investigations have found that nursing homes controlled by private equity ownership have “higher patient mortality rates, reduced staffing, overreliance on psychiatric medications, and reduced quality of care.” Hidden in a tangled web of legalese and the constant change of ownership, these companies run nursing home facilities with very little transparency. 

As a result, not only are facilities not obligated to share their practices, they are also capable of running their facilities however they like – which is often with very few funds, staff shortages, and other issues that are never brought to light and fixed.

What Can You Do?

Thoroughly research any nursing home or care facility you are interested in moving a loved one to. Ask who owns the facility, what their policies are, and who can be contacted in the case of any issues or questions. 

Look for ratings online. Many people consult online nursing home rating systems when selecting a nursing home. The most popular rating site is Care Compare, which is operated by the federal Centers for Medicare and Medicaid Services (CMS). Keep in mind, though, that there are sometimes serious flaws in this system that can make the rating unreliable. However, it can still be useful in narrowing your choice since it is almost always best to avoid lower rated nursing homes if you can.

A growing number of nursing homes are reviewed on Yelp as well, and other web-based review sites. Reviews offered on these sites offer a much more individualized perspective on the quality of care and the treatment of residents. Use your best judgment when considering online reviews to determine if they appear to be trustworthy. Some nursing homes arrange for fake reviews, so beware of comments that seem unreliable or too good to be true.

If you become aware of abuse occurring in a nursing home facility, contact the proper authorities immediately, and call Gharibian Law (866-239-8812) for the best legal representation.