By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Wealth Beat NewsWealth Beat News
  • Home
  • News
  • Finance
  • Investing
  • Banks
  • Mortgage
  • Loans
  • Credit Cards
  • Small Business
  • Dept Management
Notification Show More
Aa
Wealth Beat NewsWealth Beat News
Aa
  • News
  • Finance
  • Investing
  • Banks
  • Mortgage
  • Loans
  • Credit Cards
  • Small Business
  • Dept Management
Follow US
Wealth Beat News > Finance > Who Really Owns Nursing Homes, And How The Feds Are About To Learn More
Finance

Who Really Owns Nursing Homes, And How The Feds Are About To Learn More

News
Last updated: 2023/11/27 at 4:46 PM
By News
Share
6 Min Read
SHARE

The federal government wants to know more, and wants consumers to know more, about who owns nursing homes. It is about time. And it may help identify some of the worst actors who pollute the nursing home industry. However, without easier access to this new information, I’m not sure how helpful it will be for prospective residents and their families.

At the same time it issued ownership and operator disclosure rules, the Department of Health and Human Services released an important paper on what we know now about nursing home ownership and its relationship to quality care.

The Private Equity Myth

The paper was written by David Stevenson, chair of the department of health policy at the Vanderbilt University school of medicine, and colleagues. And it helps explode a myth that private equity firms—businesses that pool large amounts of capital from large investors and rely heavily on debt financing— are the prime cause of poor nursing home quality.

The authors conclude that private equity facilities do suffer from lower quality than other for-profit facilities and that quality does decline after these firms acquire nursing homes. Those are important findings that support some previous studies but contradict others.

However, these firms own only a tiny, and shrinking, fraction of facilities—5 percent in 2022, or about 900 out of roughly 18,000 nursing homes. Real Estate Investment Trusts (REITs), privately-held or publicly-traded firms that invest in multiple properties, own about 9 percent, a share that has held relatively steady since 2019. They have similar quality issues.

By comparison, other non-PE, non-REIT for-profit chains owned about 6,800 facilities while about 3,200 were mom-and-pops. Roughly 3,500 were not-for-profits.

Data Problems

But there are important caveats. First, quality measures may themselves be unreliable. Like many studies, this one uses the government’s Nursing Home Compare five star rating system as a measure of quality. But it suffers from significant gaps. For example, it does a better job measuring safety than patient and resident experience and overall quality.

The authors also look at deficiencies reported by state inspectors. But they are inconsistent and have many other flaws.

Still, this study and others like it are a useful way to look broadly at the industry. But they are constructed by using multiple data sets (this paper uses six). And, crucially, it often is impossible for consumers to learn who owns a specific facility.

This is especially important when it comes to chain owners and operators. For example, when an owner with a terrible quality and safety record purchases a facility, the new acquisition likely is a quality timebomb. But currently consumers don’t know about the buyer’s track record. That matters since between 2016 and 2021, about 3,000 facilities changed hands.

Hard To Track

Tracking ownership is complicated for several reasons. Among them:

Often, owners don’t manage facilities. Many operators lease a facility from a REIT or other investor, or even from a separate company owned by the manager. But the key player is the operator, who makes day-to-day management decisions while the owner may do nothing more than collect lease payments. In the case of small chains or independent facilities, the owners and operators typically are the same. But not so with larger chains.

The other challenge is the ownership or operating structure itself. Often, chain facilities are controlled by limited partnerships that are owned by one or more other partnerships. That makes it extremely difficult to know who is in charge.

The new Centers for Medicare and Medicaid Services (CMS) rules require facilities to report their ownership, including names of officers, directors, and managers, when they first apply for Medicare or Medicaid payment, when they are recertified (usually every five years), and whenever they change ownership.

The new rule requires reporting by parties that have management or financial control over a facility, although CMS still must provide additional detail about which entities must be reported. It also defines private equity and REITs to help assure consistent reporting.

Consumer Access

CMS promises to make the information publicly available about a year after it is reported, though it does not say how. Unless this information is easily accessible and understandable, it will be of little use to consumers.

The Affordable Care Act of 2010 (Obamacare) required CMS to mandate more detailed ownership but the agency never finalized rules until now. Thus, it required only limited information from nursing home owners and did not make it available to consumers.

About 1.3 million Americans are residents or patients in nursing facilities, roughly half are long-stay residents and half receive time-limited post-hospitalization care such as rehab.

Surveys show consumers mostly pick facilities based on location—those closest to family members. But the more they know about quality and safety the better. And understanding who owns a facility can help inform those decisions, if only at the margin.

Read the full article here

News November 27, 2023 November 27, 2023
Share this Article
Facebook Twitter Copy Link Print
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Fast Four Quiz: Precision Medicine in Cancer

How much do you know about precision medicine in cancer? Test your knowledge with this quick quiz.
Get Started
Excelerate Energy: Nearby Best Energy-Source Cap-Gain Prospect (NYSE:EE)

The primary focus of this article is Excelerate Energy, Inc. (NYSE:EE). Investment…

Penske Is Steady, But The Road Ahead May Be Bumpy (NYSE:PAG)

Investing Thesis On Wednesday, Penske Automotive Group (NYSE:PAG) released a superficially encouraging…

Top Financial – No, Stop It, This Is Silly (NASDAQ:TOP)

TOP Financial Moves, yes, but why? TOP Financial (NASDAQ:TOP) was quite the…

You Might Also Like

Finance

From Potential Paralysis To Profits

By News
Finance

Should I Keep The Mortgage In Divorce?

By News
Finance

What You Thought You Knew Is Hurting Your Money

By News
Finance

What Qualifies As An HSA Eligible Expense?

By News
Facebook Twitter Pinterest Youtube Instagram
Company
  • Privacy Policy
  • Terms & Conditions
  • Contact US
More Info
  • Newsletter
  • Finance
  • Investing
  • Small Business
  • Dept Management

Sign Up For Free

Subscribe to our newsletter and don't miss out on our programs, webinars and trainings.

I have read and agree to the terms & conditions

Join Community

2025 © wealthbeatnews.com. All Rights Reserved.

Join Us!

Subscribe to our newsletter and never miss our latest news, podcasts etc.

I have read and agree to the terms & conditions
Zero spam, Unsubscribe at any time.
Welcome Back!

Sign in to your account

Lost your password?