Beware of Private Equity-Owned Nursing Homes: Study

Nov. 19, 2021 — When you must assist a dad or mum select a nursing house otherwise you want nursing house care your self, you may seek the advice of a healthcare skilled, speak to associates, or take a look at the Nursing Home Compare web site of the Centers for Medicare and Medicaid Services (CMS). The CMS web site contains star scores for every nursing house, each total and on well being inspections, staffing and sure high quality measures.

But what you won’t know is what monetary incentives a specific nursing house may need to supply high-quality care, relying on what sort of entity owns the ability.

A examine printed Nov. 19 in JAMA Health Forum throws mild on at the least one side of the possession query: What occurs when a non-public fairness (PE) agency acquires a nursing house? According to the examine, you may count on a considerably decrease stage of high quality in a PE-owned nursing house than in different for-profit amenities.

The researchers in contrast CMS information on 302 nursing properties owned by 79 PE corporations to information on 9,562 for-profit amenities not owned by such firms from 2013 to 2017. Among fee-for-service Medicare sufferers in long-term care, personal fairness acquisitions of nursing properties have been related to an 11.1% enhance in ambulatory-care-sensitive (ACS) visits to the emergency division (ED) and an 8.7% enhance in ACS hospitalizations per quarter, in comparison with the modifications that occurred within the non-PE-owned amenities, they discovered.

What’s extra, Medicare prices per beneficiary elevated 3.9% extra — or about $1,000 a yr — within the PE-owned nursing properties than they did within the different cohort in the course of the examine interval.

And when the acquired nursing properties have been in comparison with the nursing properties previous to their acquisition by PE corporations, there have been no statistically important variations in. unadjusted outcomes, the researchers discovered. That means the 2 cohorts have been broadly comparable.

The researchers adjusted the numbers of their examine for varied traits of the amenities and their residents. For instance, the PE-acquired nursing properties have been prone to have a better share of sufferers lined by Medicare and a decrease share lined by Medicaid than their non-PE counterparts.

The imply percentages of Black residents, feminine residents and residents aged 85 or older have been 12.4%, 65.4% and 36.2%, respectively, for the PE-owned nursing properties and 15.7%, 67.8% and 39%, respectively, for the non-PE-owned amenities.

Less than optimum outcomes

On common, the residents of non-PE-owned nursing properties had higher outcomes , than did the sufferers within the PE-owned amenities. But that doesn’t imply that the typical for-profit nursing house had terrific outcomes.

For all of the nursing properties within the examine, the imply quarterly charge of ACS emergency division visits was 14.1% and the imply quarterly charge of ACS hospitalizations was 17.3%.

“These events should be largely, although not completely, preventable with appropriate care,” the researchers identified.

To date, PE corporations have invested about $750 billion in U.S. well being care, with nursing properties being a serious goal of those firms, which at present personal 5% of expert nursing amenities, per the examine. PE firms search annual returns of 20% or extra, the paper says, and thus really feel stress to generate excessive short-term income. That might result in lowered staffing, companies, provides or tools of their amenities.

Some nursing properties bought by PE corporations could also be liable for the debt incurred in their very own leveraged buyouts, the researchers famous There can be concern that PE corporations could focus their properties disproportionately on short-term post-acute care, which is reimbursed at a better charge than long-term care, the examine says.

For all these causes, some well being coverage makers are involved in regards to the long-term affect of private-equity nursing house acquisitions, in accordance with the examine.