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Large Investment Firms Conceal Nursing Home Quality Issues

In September, The New York Times published an in-depth analysis of trends at nursing homes purchased by private investment groups. The journalists used data from the Centers for Medicare and Medicare Services (CMS) to compare quality indicators of investor-owned homes against national averages.

What they found is disturbing. Not only did the quality of resident care suffer, but private investment companies shield themselves from regulators by creating “complex corporate structures” that make it difficult to identify who controls the facility. Publicly owned facilities are required to disclose who is in charge of their facilities in securities filings and other regulatory documents.

According to the Times, at 60 percent of homes bought by large, private equity groups from 2000 to 2006, managers have cut the number of clinical registered nurses, at times below levels required by law. These conditions make it impossible for the care centers to provide residents with the necessary and required hours per day of nursing care. Homes owned by large, private investment firms provided, on average, one clinical registered nurse for every 20 residents, 35 percent below the national average.

Resident advocates are urging lawmakers to increase transparency at nursing homes so that those liable for poor care can be identified and penalized. U.S. Senators Max Baucus (D-Mont.) and Charles Grassley (R-Iowa) have asked CMS for a briefing to address this issue; Grassley has requested that the Government Accountability Office conduct a review.

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