Corporate ownership changes linked to poor nursing home quality

The study aimed to find how nursing home residents are affected by chain transactions, Grabowski says
The study aimed to find how nursing home residents are affected by chain transactions, Grabowski says

Nursing homes that are bought and sold frequently by corporate chains tend to provide a lower quality of care, according to research from Harvard Medical School released on Monday.

Many nursing homes that experienced a chain-related transaction between 1993 and 2010 had a higher number of deficiency citations than facilities that did not undergo a transaction, according to researchers from Harvard, the University of Michigan, the University of Rochester and Vanderbilt University.

In many instances, nursing homes that were the subject of a transaction were already having quality issues, which continued after the transaction. Those pre-existing quality issues led the researchers to believe that the transaction wasn't to blame for any drops in quality, but rather that corporate transactions can be an indicator of a low-quality facility.

The study's results could spur policymakers to create legislation that requires more comprehensive reporting of ownership for nursing homes chains, as well as increased accountability, oversight and transparency for corporate chains, the researchers said. The researchers also suggest that notices of nursing home sales should be publicly available, an idea that was recently set as a rule in Massachusetts.

The researchers noted that consumers may be able to use the number of a facility's chain-related transactions as a potential indicator of a facility's quality.

"A large number of mergers, sales and acquisitions have occurred over the past two decades among nursing home chains, and we wanted to see how residents living in these nursing homes were affected by these transactions," explained lead researcher David Grabowski, Ph.D., a professor of healthcare policy at Harvard.

Each year, between 1,200 and 2,000 nursing homes in the United States — 7% to 13% of all facilities — are involved in a corporate chain transaction. Despite that, the amount of nursing homes owned by a corporate chain remains the same as it was in the 1990s, the study's authors note.

The most common type of transaction is mergers across chains, with eight of the 10 largest nursing homes chains — which comprise 12% of all facilities — undergoing some sort of ownership change within the study period.

Results of the study appear in the May issue of Health Affairs.