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Call to Action: Improving Nursing Home Outcomes and Transparency

Pandemic impacts and private equity investment snap into focus the need for transparency and accountability in nursing homes.

A man sitting in a wheelchair receives a booster shot from a worker wearing scrubs in a lobby area of a nursing home.
A nursing home resident receives a COVID-19 booster shot in New York in this Sept. 27, 2021, file photo. (Seth Wenig/Associated Press file)

More than one in five people who have died from COVID-19 were living or working in a nursing home — that’s 200,000 lives lost. That figure has sparked renewed scrutiny by policymakers of the dangerous conditions in nursing homes that experts believe were exacerbated by the pandemic.

President Biden noted in his first State of the Union address on March 1: As Wall Street firms take over more nursing homes, quality in those homes has gone down and costs have gone up. That ends on my watch.” Prior to the president’s address, the White House announced a strategy to begin cracking down on behaviors that are contributing to poor outcomes in these facilities.

Researchers and advocates note that these conditions have long existed, and yet more evidence is needed to drive policy changes that would protect nursing home residents from private equity business practices that put the bottom line ahead of the health and safety of people who need long-term care in nursing facilities.

While policies to expand care for older adults and people with disabilities at home and in the community have received renewed focus, the need for institutional settings for individuals who require intensive supports will always exist,” said Arielle Mir, vice president for health care at Arnold Ventures. Greater transparency into the costs, quality, and management structure of these facilities is essential to ensuring that care is delivered safely, equitably, and efficiently.” 

A recent report from AV grantee Faegre Drinker recommends specific ways to improve data that can help make clear who is responsible for nursing home care. 

Today, it’s challenging to know which organizations own a nursing home, making it difficult for the government and private citizens to hold them accountable. The vast majority of nursing home revenue comes from the Medicare and Medicaid programs, which are funded by taxpayers. And taxpayers have the right to understand who is receiving their money and whether they are getting a good value for it. Furthermore, the federal data systems that hold skilled nursing facility data do not provide complete information on nursing facilities or their ownership.

Drinker’s new report shows just how much work needs to be done to fix our existing systems so that ownership information is clear. The team examined each of the federal data systems and talked to leading experts including those that use the data for research on the quality of nursing homes to develop recommendations for improvements. Recommendations include conducting ongoing data integrity checks to strengthen data quality and publishing publicly available files related to nursing home ownership.

Researchers and advocates note that poor conditions in some nursing homes have long existed. Pre-pandemic, many of these facilities were over capacity and not meeting basic safety requirements, like training on sanitation and hand-washing measures. In addition, high levels of staff turnover in nursing homes created the conditions for more rehospitalizations and more frequent use of physical restraints.

Simultaneously, private equity has pursued the nursing home industry as an opportunity for profit. Private equity firms’ investment in nursing homes has increased from $5 billion in 2000 to over $100 billion in 2018, with nearly 5% of nursing homes now owned by private equity firms. 

Evidence shows the detrimental impacts of that investment. Private equity entrance into this market has led to declines in nursing staff and compliance with standards, which in turn has meant worse outcomes. One study found that going to a private equity-owned nursing home increased individuals’ short-term mortality by 10% during and for 90 days after the nursing home stay.

The combination of these factors created the perfect storm at the height of the pandemic. Many facilities throughout the country were hit incredibly hard, some too short staffed and ill equipped to manage a viral illness on the scale of COVID-19. There were shocking stories of facilities with as many as 50 deaths and families unable to get timely updates about their loved ones.

Biden’s State of the Union address, the ongoing pandemic, and the growth of evidence on the impacts of private equity in these facilities has fostered a new call to action for the federal government. 

The time to provide increased transparency on these facilities is now,” Mir said.