Do you know who owns your loved one’s nursing home? Existing data paints an incomplete picture.
COVID-19 deaths had an outsized impact on nursing homes, with over 3,000 residents dying each week at the pandemic’s height. The situation drew the ire of policymakers across the political spectrum. Officials trained their focus on nursing facilities, with Congress holding several hearings to address nursing home care and quality issues and the Biden administration launching an initiative to improve these care settings and better protect their residents.
Within this landscape, AV’s Complex Care team sent a letter to the Centers for Medicare and Medicaid Services (CMS), expressing support for the agency’s proposed rule to increase transparency around nursing home ownership.
“If finalized, the rule will take an important step toward ensuring much-needed oversight of these facilities,” said Arielle Mir , vice president of health care for Arnold Ventures, who leads AV’s Complex Care team.
Improving care in nursing homes is relevant for the population that is dually eligible for Medicare and Medicaid, the focus of AV’s Complex Care team. The so-called dual-eligible population makes up more than 70% of nursing home residents. Even beyond the pandemic, care received in nursing homes has been identified as a major driver of poor outcomes for this population.
The call for increased transparency comes in the wake of a spike in financial acquisitions of nursing homes by private equity firms and real-estate investment trusts (REITs). A REIT is a for-profit public or private corporation that invests in or fully owns income-producing properties, including nursing homes.
Private equity firms and other institutional investors like REITs have made significant acquisitions in health care in recent years, but the ownership of health care facilities is not tracked in government databases. Profit incentives associated with these acquisitions raise concern about the effect of these ownership structures on care and costs for nursing home residents.
Arnold Ventures’ Complex Care team has supported several studies to better understand this relationship. Early results indicate that private equity acquisitions lead to worse patient outcomes, including increasing rates of hospitalization and mortality.
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.
“Today, nursing homes, including those owned and operated by private equity firms, are not meaningfully held accountable for the quality of care that they provide to the people who live and receive care in their facilities, the majority of whom are dual-eligible,” said Arielle Mir. “To do so would require enhanced data collection related to who owns these facilities and how they are operated.
For dual-eligible individuals receiving care in nursing homes, lack of transparency and accountability are only one part of the puzzle. Medicare and Medicaid jointly fund dual-eligible individuals’ nursing home stays.
Each program is responsible for a different portion of this populations’ care and the rates that each program pays vary. This payment fragmentation incentivizes nursing homes to move dual-eligible individuals in and out of hospitals, resulting in a disruptive and harmful experience for patients and inflationary public spending.
“Together with promoting increased accountability of nursing homes, the Complex Care team is committed to funding research and policy development to address payment fragmentation in a way that better aligns the incentives between nursing homes and dual-eligible residents and reduces unnecessary transitions in and out of these facilities,” Mir added.
Below, read our letter to the CMS administrator on nursing home transparency.