Private equity firms are buying up America’s nursing homes, triggering alarming declines in the quality of resident care, according to an article in Stat News, a media company that reports on health, medicine and life sciences. These for-profit takeovers often leave facilities struggling financially, leading to staff layoffs, regulatory violations, and harm to residents.
Currently, according to another report in KFF Health News, approximately 72% of the 15,000 nursing homes in the U.S. are owned by for-profit operators. Since 2015, more than 900 struggling nonprofit nursing homes have been acquired—over half by for-profit entities. Many of these facilities were once operated by faith-based organizations but are now under the control of private equity firms, real estate investment trusts, or other complex ownership structures.
To maintain profitability, these new owners often reduce staffing, which contributes to lower quality ratings and more frequent regulatory violations. Some for-profit operators set up networks of related companies to provide services at additional fees, while others sell the nursing home’s real estate to affiliated companies that charge higher rents. Private equity firms in particular hand proceeds to investors while the home continues to be responsible for escalating costs.
These profit-driven strategies not only drain operating funds but also have devastating consequences for residents. A study found that private equity investment in nursing homes was linked to staffing shortages and an alarming 11% increase in resident deaths.
In 2023, New York Attorney General Letitia James filed a lawsuit against four nursing homes, citing resident neglect and financial fraud. The lawsuit alleges that the owners misappropriated over $83 million in taxpayer funds for personal gain while residents endured neglect, harm, and humiliation. Staff shortages left many residents without assistance for basic activities of daily living, forcing them to live in unsanitary and degrading conditions.
The challenges aren’t limited to for-profit facilities. All nursing homes face financial pressures due to inadequate Medicaid reimbursement rates that fail to cover the cost of care. Compounding this issue is a widespread shortage of healthcare workers. To address these concerns, nursing homes are lobbying for additional funding tied to quality outcomes.
If your loved one has been injured in a nursing home or assisted living facility in Pennsylvania and you suspect negligence, contact us. We offer decades of experience through a recognized leader in long-term care litigation cases and can provide the skilled legal guidance you need to seek justice.
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