A recent New Yorker feature story examines the effects of private equity acquisitions on nursing home care. Based on firsthand accounts from a nursing home acquired by a private equity firm, and drawing from recent academic research, the article makes a compelling and heartbreaking argument that acquisitions lead to drastic staffing cuts and diminished care, among other negative quality outcomes.
As the article explains, the ostensible promise of private equity takeovers of nursing home facilities is that they will optimize operations by stripping out inefficiencies in a home’s operations. In practice, what ends up happening all too often is that the acquiring firm cuts costs so ruthlessly that they facility struggles to deliver bare minimum levels of care. As one economist’s survey of nursing home acquisitions between 2014 and 2015 found, “when private-equity firms acquired nursing homes, deaths among residents increased by an average of ten per cent.”
One reason for this may be the staffing cuts private equity firms make when they take over a new home, as staffing is “often represents the largest operating cost on a nursing home’s ledger.” Unfortunately, the economist pointed out, nurse availability in nursing home facilities “is the most important determinant of quality of care.” When nursing levels fall, so does the quality of care residents receive:
At homes with fewer direct-care nurses, residents are bathed less. They fall more, because there are fewer hands to help them to the bathroom or into bed. They suffer more dehydration, malnutrition, and weight loss, and higher self-reported pain levels. They develop more pressure ulcers and a greater number of infections. They make more emergency-room visits, and they’re hospitalized more often.
The New Yorker article opens with the story of a nursing home in Virginia, formerly called St. Joseph’s Home for the Aged. When it was purchased by New Jersey private equity firm Portopiccolo Group in 2021, staffing cuts quickly followed the acquisition. The cuts were reportedly so drastic that “Some mornings, there were only two nursing aides working at the seventy-two-bed facility,” which one nurse noted can be the number of aides required simply to transfer a resident to the bathroom. The new owners cut costs elsewhere too, eliminating amenities like an aquarium and an aviary, and by reducing the variety of foods served in the nursing home’s dining room.
But the most severe effect of the takeover, the article suggests, was in the reduced quality of care. It describes a 97-year-old resident left un-bathed for a week and a 94-year-old resident who “went several months without having her hair washed.” One patient, her son told the New Yorker, dramatically lost weight and suffered from open pressure ulcers. Four months after the takeover, a nurse gave her morphine despite instructions to call the family before doing so—the resident preferred a different one. “But the nurse didn’t call,” according to the article. “Instead, she released two milligrams of morphine under Bertha’s tongue, according to Cumber. Within an hour, another nurse administered another two-milligram dose.” The resident reportedly stayed asleep for two days before her breathing stopped.
To read the full story about private equity’s influence on nursing home care, read the New Yorker story here.
