By Steve Moran

The theme is not new: that when private equity, REITs, and other for-profit entities purchase senior living communities, particular nursing homes, quality of care goes to hell. The most recent example is in an article titled “Concerns Grow Over Quality of Care as Investor Groups Buy Not-for-Profit Nursing Homes,” by Harris Meyer.  

The big theme is that since 2015, more than 900 not-for-profit senior living communities and nursing homes have changed hands, and more than half of those transactions have transferred communities from not-for-profit ownership to for-profit ownership.  

Big Issues Worth Talking About

As I write this, I am struggling with how to tackle all the big issues that one article raised. Here is the list:

  1. Does the sale of a not-for-profit nursing home to a for-profit entity always mean a decrease in quality of care?
  2. Why are not-for-profits selling their nursing homes at a rapid pace?
  3. Is it possible for a nursing home to be overstaffed?
  4. While I am not saying I agree with the premise that this shift is a bad thing, whose fault is it?
  5. Are ownership structures that include a network of related companies to sell services to the nursing home really a bad thing?
  6. How much credibility should sensationalism in this and other articles really have?
  7. Are there nursing homes owned by REITs or private equity that are doing a good job?
  8. How could and should the industry be addressing these questions, these articles?

To the Credit of the Author …

To the credit of the author, he touches on some of these big questions, noting that these sales are happening because the nursing homes are losing money under the current ownership structure. What is frustrating is that he seems not at all outraged by the government’s unwillingness to fund good care and bothered over the moon that a for-profit investment company might own nursing homes. 

But he fails to acknowledge that there are many privately owned nursing homes that provide great care and that we have seen a number of stories over the last couple of years about not-for-profit nursing homes that have failed their residents and staff. 

The truth is that there are great operators, middle of the road operators, and not so good operators. Some are owned by big corporations, some by family enterprises, some by not-for-profits, and some by investment firms. They need to be judged based on individual companies and individual communities. 

We also need to acknowledge that in particular, the nursing home regulatory and reimbursement system is a mess that mostly makes things worse rather than better. It needs a complete, start from scratch overhaul that puts quality of life for residents and staff first. 

This article is long enough, which means a series of articles is to come, addressing the above questions. Though not one article for every question.

This is part 1 of a four-part series. If you’re not already a Foresight subscriber, you can subscribe here to get the rest of the series when it comes out.

Correction: This article originally indicated that “over the past year,” more than 900 not-for-profit senior living communities and nursing homes have changed hands. This has been corrected to “since 2015.”