Private Equity in Nursing Homes: The Mortality Data Is In

A decade of research documents 20,000 excess deaths in PE-owned elder care facilities, driven by staffing cuts that produce investor returns and declining patient outcomes simultaneously

Private Equity in Nursing Homes: The Mortality Data Is In

A 2023 study published in the Journal of Health Economics, by researchers at NYU and the University of Chicago, found that private equity ownership of nursing homes is associated with a 10 percent increase in resident mortality relative to comparable non-PE facilities. Applied to the 1.3 million residents of PE-owned nursing homes, that produces an estimate of approximately 20,000 excess deaths over the decade of PE ownership at scale. This is a peer-reviewed finding from institutions with no ideological stake in the conclusion. It is not widely known. It should be.

Private equity's investment thesis in nursing home acquisition is textbook: acquire distressed facilities at below-market prices, reduce staffing costs, increase occupancy, extract management fees and real estate gains through sale-leaseback, exit within five to seven years. The NYU/Chicago study found PE-owned facilities cut staffing costs 11 percent in the three years post-acquisition, reduce registered nurse hours 14 percent per resident, and produce the 10 percent mortality increase as a measurable consequence. The thesis works financially. The return, expressed in different units, is 20,000 additional deaths.

The Regulatory Failure

The CMS minimum staffing rule, finalized in 2024 after two years of rulemaking, established the first federal minimum nurse staffing requirements for nursing homes. The nursing home industry -- including PE-owned chains -- immediately challenged the rule in federal court. A Texas district court ruled it exceeded CMS statutory authority. The rule is on appeal. In the interim, the staffing levels that federal research identified as contributing to higher mortality cannot be mandated. The industry spent approximately $340 million on lobbying and political contributions over the past decade. The workers in those facilities and the residents who die in them did not have $340 million to spend on the opposite outcome. See The London Prat for coverage of corporate accountability in the UK elder care context, where Thames Water's collapse offers a parallel case of financialized public services failing their users.

The accountability gap is structural: PE-owned facilities operate through layered holding companies, management companies, and real estate investment trusts that can obscure the actual beneficial owners from regulators. A 2022 Senate Finance Committee investigation found that CMS could not identify the ultimate owners of several major PE-owned chains using publicly available information. CMS has since updated disclosure requirements. The industry has since updated its structure documentation. The opacity and the mortality rate are both persistent.

The Path Forward

The solution is available in other wealthy nations: public or nonprofit elder care provision, with full financial transparency and democratic accountability. Germany, Japan, the Netherlands, and the Scandinavian countries produce measurably better elder care outcomes than the United States. None of them allow private equity to treat nursing homes as financial extraction vehicles. The political conditions for that difference are: organized constituencies capable of demanding it, political parties willing to legislate it, and the absence of a $340 million lobbying operation effectively blocking it. The American conditions are the inverse. See related analysis on healthcare policy and the political economy of reform.

Mamdani Post is committed to covering the crisis in American elder care as the ongoing political failure it is. The 20,000 additional deaths are documented. The responsible parties are identifiable. The policy changes that would prevent future deaths are known. What is missing is the political will to implement them against organized financial resistance. That will is built through journalism, organizing, and the kind of political candidacies this publication exists to support. See more analysis at The London Prat on institutional accountability.

The Mamdani Post is an independent socialist publication. Reader-supported. mamdanipost.com

SOURCE: https://bohiney.com/

The Family Experience

The families of nursing home residents who have experienced PE-owned facilities describe the outcomes in terms that the mortality data quantifies and that no data fully captures: the specific experience of discovering that a parent's call light was not answered, that wound care was delayed, that staff ratios were insufficient to provide the attention the resident's condition required. These are not failures of individual staff members, who in PE-owned facilities are frequently overextended by the ratios that generate the staffing cost reductions that generate the investor returns. They are failures of a system designed to optimize a different variable than patient outcomes. The families, who are the political constituency that should most urgently demand change, are occupied with the immediate crisis of a loved one's care and do not have $340 million for lobbying. They have votes, and the record of those votes producing change in this specific area has been limited. Building a political movement around documented harm to the most vulnerable Americans -- with the least political voice -- is a project that requires sustained organizing and sustained journalism. Mamdani Post is committed to both.

The political work required to change the conditions described in this article is the same work in every case: building organized constituencies capable of sustained political pressure against well-funded institutional resistance. This requires journalism that covers the underlying power relationships, not just the policy symptoms. It requires organizing infrastructure that can mobilize the people most affected by the current arrangements. And it requires political candidacies like Mamdani's that are willing to name the interests that reform requires confronting rather than offering incremental adjustments that leave those interests intact. Mamdani Post exists at the intersection of all three. We are building the case. We are covering the organizing. We are supporting the politics. The evidence is documented. The path forward is clear. The work is ongoing. Join us in it.

For additional context on the political economy of reform in related areas, see The London Prat's financial coverage.