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Private-equity owned nursing homes deliver poorer quality care according to study

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When we are looking at housing options, we might not consider the profitability of a nursing home in making a determination as to whether or not it is an appropriate choice but certainly the people who stand to profit from it have done so.  Beginning at the beginning of this century, private equity investors (those investors with investments that are not tradable on public stock markets) began to take a serious look at nursing homes as an investment tool.  Certainly it makes sense with the Baby Boomers beginning to move en mass towards their 60s, 70s and later.

By 2008, an article looking at the trend found that for-profit companies owned nearly two-thirds of American nursing homes.  In 2010, “The Economist” ran an article saying that three of the five largest chains of homes in the United States were owned by private equity firms.   That article claimed that with a need to maximize profits, those firms by necessity cut quality of care but there still wasn’t any sort of clarion call but perhaps that is about to change.  This year, investigators that looked at about 350 Florida nursing homes found that homes owned under private equity ownership had more deficiencies and fewer registered nurses on staff than other for-profit facilities.  They also found that they had 9 percent higher pressure ulcer risk prevalence, 21 percent higher deficiencies than a control group of chain-affiliated nursing homes, 29 percent lower registered nurse hours per-patient-day, generally by substituting less expensive nursing and resulting in  a 25 percent lower skill mix.

The researchers also found that there was a documented decline in RN staffing with every year of private equity ownership.  The one positive the researchers found was that private equity facilities reported few serious deficiencies than the control group, a result researchers suggested might be more as a result of concerns of “attracting stringent regulatory action including monetary fines.”

Four key measures of quality the study looked at were the hours of quality staffing, prevalence of pressure ulcers, prevalence of restraints and number of deficiencies. The authors of the study estimated that if all the nursing homes in the United States were operated on a not-for-profit basis, 7,000 current residents with pressure sores would not have them and that residents in nursing homes would experience 500,000 more hours of nursing care a day.    To read more about the research, go here.

What all the articles I read didn’t point out was that Florida, whether it’s because there are so many older Americans living in the state or because of some other underlying issue, frequently comes in near the bottom of the pile when it comes to the care it provides its older residents.  It’s therefore not necessarily fair to hold it as a standard for the kinds of care that all such facilities provide.  It’s safe to say that if a nursing home becomes an option, do your due diligence.  Rajiv tells a story about ending up selecting a home further away from his home when his father-in-law ended up in a nursing home because the ones closer to his home didn’t smell as clean.  Spend the time necessary to look at what your money will buy.

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