Finance

N ursing home care and profit have had a long and sometimes difficult relationship. For-profit companies have performed a significant role in the nursing home sector for many years, and almost two-thirds of U.S. 1 Several facilities are part of multifacility chains, although parent companies differ in their size and geographic range.

In the context of continuing quality-of-care problems, the role of for-profit companies has often been central to investigations of and judgments in what ails this care sector. 2 A big body of research has looked into this topic as well, and distinctions between for-profit and not-for-profit facilities are a staple of many studies of nursing home quality. A fresh flashpoint has emerged in assessing the role of profit in nursing home care.

As complete by a fresh York Times article, private equity investors have recently targeted nursing home chains and facilities as investment opportunities. 4 Importantly, the Times article highlighted quality-of-care concerns and described complex management structures that may obscure responsibility for care and hamper the ability of residents and families to get recourse through litigation. Although the infusion of private collateral dollars into the nursing home industry has been going on for several years, the Times article raised the likelihood that these transactions might have a negative impact on residents. And in addition, stakeholders-including advocates, labor unions, and the U.S. Congress-have been quick to respond, pressing for further scrutiny of the deals and for reassurances that treatment won’t suffer.

1. Eddie Schodowski says
2. A graphic about the pension performance that was wrong,
3. Turn off the main water shut off valve inside your home
4. I bought 5,000 shares of the IAU gold ETF
5. Extend the SCSS account for another three years

Despite the attention garnered by recent media coverage, has been released in the research literature on the topic little. Although based on an intensive investigation, the Times article raises many questions, in particular about the analytic approach used. 5 Recent congressional testimony analyzed the impact of private collateral purchases in the framework of single-chain transactions, and the Florida Agency for Health Care Administration evaluated the impact of similar transactions in that condition.

6 However, there’s been no thorough quantitative assessment of these styles and their impact all together. The purpose of this paper is to analyze the impact of private equity investment in the nursing home sector. Specifically, we explore changes in occupancy payer blend, staffing ratios, and a range of quality signals following private collateral purchase.

We also discuss broader implications of private equity investment in the nursing home sector, focusing on the bonuses of private equity-owned facilities in accordance with other assisted living facilities and on the oversight and accountability. The term private equity refers to a variety of investments not tradable on open public stock markets. Private equity companies focus on venture capital and leveraged buyouts typically, funding transactions through a combination of capital raised from investors and lent from lenders.