How Private Equity in Nursing Homes Affects Health Outcomes

When you move a loved one into a nursing home, you expect them to be treated with dignity, respect, and competent medical care. Unfortunately, that is not always the case, especially when the facility is owned by a private equity (PE) firm.

Over the last decade, these financial firms have quietly bought nursing homes nationwide.

While they may promise efficiency and modern management, the opposite is true. Sometimes, this means staff cuts, neglected residents, and a sharp decline in the quality of care that can put patients at risk for abuse.

Here’s how private equity in nursing homes affects health outcomes.

Why Is Private Equity Involved in Nursing Homes?

Private equity firms are investment groups that buy businesses with one goal: to make money quickly.

They purchase nursing homes through other companies and load them with debt. After that, they look for ways to cut costs and boost profits. This is at the expense of patient care.

These firms plan to sell the facilities within just a few years. This short-term focus contrasts with the long-term care that nursing home residents need. The consequences can be detrimental to the health of residents.

A Decline in Health and Safety

Recent research paints a troubling picture. A 2021 study published in the Journal of the American Medical Association found that residents in private equity-owned nursing homes were 10% more likely to die within the first 90 days of admission compared to those in other facilities. Other studies have found higher rates of bedsores, infections, and the overuse of antipsychotic medications.

Families often notice a sharp decline in care shortly after a private equity firm takes over a nursing home. Nutritious meals are replaced with cheaper, lower-quality food. Housekeeping suffers. Rooms often go uncleaned, linens are not changed regularly, and odors linger.

Most troubling, staff members seem overworked, distracted, or absent. Some residents may wait hours for basic assistance or be left unattended for long periods.

This is more than poor management: it directly results from deliberate cost-cutting. Private equity owners reduce the number of skilled nurses and certified aides to increase profit margins. This can leave facilities dangerously understaffed. Even routine needs, like bathing, turning, medication, and supervision, can be neglected without trained caregivers.

These changes put residents at serious risk.

Fewer Staff, More Risk

One of the first ways private equity firms cut costs is through staffing. They may reduce the number of registered nurses (RNs) or certified nursing assistants (CNAs). This leaves fewer caregivers responsible for more residents.

With less time and support, even the most compassionate staff members cannot meet the demands placed on them. This understaffing directly affects resident safety. Without enough supervision, residents are at higher risk of:

• Falling
• Choking
• Wandering away from the facility
• Suffering from untreated infections

These are real injuries and preventable tragedies.

Hidden Ownership and Accountability

Another serious issue is transparency. When private equity takes over a nursing home, ownership often becomes buried under layers of shell companies. That makes it harder for families and government regulators to determine who is responsible when something goes wrong.

If you have ever tried to file a complaint or hold a nursing home accountable, you may have been passed from one entity to another. Each one may claim they are not the ones in charge. This lack of clarity is not accidental. It is part of a strategy to minimize liability while maximizing profits.

Your Loved One Deserves Better

Elder care should never be about squeezing out profits. Nursing home residents have worked hard, raised families, and deserve compassion and proper medical care in their final years.

The human cost is tremendous when corporations treat them as line items on a spreadsheet.

No one should have to wonder whether their loved one is safe in a nursing home. If you have noticed signs of neglect or abuse, such as bedsores, sudden weight loss, unexplained injuries, or changes in behavior, you need to act right away. These may be symptoms of a larger problem, especially in privately owned or under-resourced facilities.

You placed your trust in a nursing home. If that trust was broken, we can point you in the direction to help make things right. At My Nursing Home Abuse Guide, we have the resources to help you take action.