Private equity firms have become a growing presence in the nursing home industry, bringing troubling trends in fines and care quality. Research links private equity ownership to understaffing, higher fines, and increased risks of nursing home abuse and neglect. Understanding who owns a facility can help families identify potential red flags and advocate for better care.
Who Owns Nursing Homes?
There are four general types of nursing home ownership, and each has its own traits and motivations. Learn more about who owns nursing homes below.
For-Profit Nursing Homes
These facilities operate as businesses, aiming to attract residents while maximizing profits. This type of nursing home is the most common, with about 70% being for-profit.
For-profit nursing homes often focus on cost management, which may affect care quality. One of the most common issues is understaffing in nursing homes, leaving residents without the attention they need.
When facilities operate with too few caregivers, nursing home neglect becomes more likely, increasing the risk of serious health complications.
Government Nursing Homes
Nursing homes that are funded by the government are less common but provide essential care for veterans, low-income individuals, and other vulnerable groups. These are sometimes referred to as public nursing homes.
The quality of government nursing homes can vary substantially. While some receive adequate funding to hire qualified staff, others may struggle with limited resources, leading to staffing shortages similar to private facilities.
Nonprofit Nursing Homes
These nursing homes are typically owned by a charity or community organization. Unlike for-profit nursing homes, nonprofits reinvest extra money into resident care, staffing, and facility improvements.
Some are small, while others are part of large, well-known organizations. Many serve the general public, but some have religious or cultural ties.
Private Equity Nursing Homes
This type of for-profit facility owns about 5% of nursing homes, but its influence extends further through real estate investments and management contracts.
Private equity firms are investment groups that buy businesses, including nursing homes, to increase their profits. After acquiring a facility, they often cut costs to make it appear more profitable, which can impact care quality.
What Happens When a Private Equity Firm Takes Over a Nursing Home?
Private equity firms acquire businesses, including nursing homes, to increase profitability. While this is a common business strategy, focusing on financial returns can negatively impact residents.
To cut costs, private equity-owned nursing homes often operate with minimal staffing and just enough resources to meet basic requirements and avoid penalties. This approach increases the risk of neglect and poor care.
“We know that private equity increases the mortality of Medicare residents by 10%.”
– Sam Brooks, National Consumer Voice for Quality Long-Term Care
Understaffing in nursing homes makes it harder to provide proper care, which can lead to serious harm. When facilities don’t have enough caregivers, all types of abuse in nursing homes become more likely.
Some private equity firms continue cost-cutting practices despite fines, treating penalties as an expected business expense. Instead of improving conditions, some private equity firms choose to pay fines while continuing practices that put residents at risk.
Abuse and neglect can happen in any nursing home. If your loved one was harmed in a facility that was supposed to care for them, taking legal action may be the best path forward.
Get a free case review right now to see if you may qualify.
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Concerns About Care Quality
Growing evidence highlights the negative impact of private equity ownership in nursing homes.
Here are some examples of the impact private equity firms have on nursing homes:
- In Iowa, Cascade Capital Group, a private equity firm, acquired 29 nursing homes. One facility was fined 17 times more under its ownership than before.
- Research from 2000 to 2023 links private equity ownership to higher patient costs and lower quality of care.
- Residents in private equity-owned nursing homes are 11% more likely to require emergency care and 8.7% more likely to be hospitalized for preventable conditions.
Understanding ownership matters when families choose a nursing home. Private equity facilities are frequently associated with reduced care quality for older adults.
“They take over and care goes down, and then they move on.”
– Sam Brooks, National Consumer Voice for Quality Long-Term Care
As data continues to confirm these trends, policymakers and community leaders are paying closer attention.
Regulatory and Financial Issues
Nursing homes must follow regulations that set staffing levels and require on-site administrators. However, private equity-owned facilities often cut corners to boost profits, leading to common causes of nursing home abuse.
One major example is Atrium Health and Senior Living, where owners paid themselves $37 million while the facilities struggled.
A grand jury found serious issues, including:
- Residents evicted in cold weather without warning or explanation.
- A resident left in soiled underwear for seven hours due to neglect.
- Staff shortages that left employees unable to afford basic supplies.
These cases show how private equity ownership can lead to reduced care quality and financial mismanagement.
“A lot of people were shoved around like old shoes. They were traumatized. They didn’t tell them where they were going. They just woke them up and said, ‘You’re moving.’”
– Charlie Kukuczka, son of an Atrium resident
Signs Your Loved One May Be at Risk
Certain warning signs can indicate that a nursing home is providing substandard care.
Watch for these red flags of nursing home negligence:
If you notice these signs, consider looking into the facility’s care practices or exploring other options if possible.
Get Help for Mistreatment in Nursing Homes
Protecting your loved one starts with choosing a nursing home that provides quality care. Researching ownership can offer insight into how a facility is run.
If you notice signs of mistreatment — like unexplained bruises or changes in behavior — document your concerns.
Taking legal action can hold negligent nursing homes accountable and push for better care standards, benefiting all residents.
An experienced nursing home abuse attorney can guide you through the legal process, protect your loved one’s rights, and demand accountability from the facility.
Call us right now at (855) 264-6310 or get a free case review to find out how we can help.
