Observers and critics of private equity ownership in US long-term care facilities could be excused if they get a feeling of deja vu when they learn about that type of investor in the United Kingdom.
Private equity involvement in the British long-term care sector is now experiencing complaints that echo those recently tossed around by some US lawmakers, officials and other stakeholders lately.
In “Britain’s Hard Lessons From Handing Elder Care Over to Private Equity,” from Kaiser Health News Wednesday, authors included results of a study that found adverse changes in the quality of care in long-term care facilities supported by private equity investments.
“What you find in America with private equity is much the same here,” said one analyst quoted in the story. “They are often the same firms, doing the same things.”
The Kaiser report cited one instance where “more than a dozen staff members” accused their facility of “‘cutting corners’ to curb costs because their priority was profit.”
On this side of the Atlantic, similar complaints led to President Biden calling out for-profit entities in his State of The Union address and increased watchdog oversight of nursing home ownership connections. There have also been promises to make more transparent ownership data followed by federal action mixed with pushback from the provider side.
Though Britain has a national healthcare plan, its long-term care is supported by both government and private money, just like in the US. And just as in America, government funding is constantly attacked for not being enough to properly care for residents. Accusations of cold-hearted private equity behavior in America mirror those in Britain.
One nursing home chain highlighted in the story switched owners several times in 14 years.
“From 2004 to 2017, big money came and went, with revenue at times threaded through multiple offshore vehicles,” Kaiser explained.
Groups that owned Four Seasons, in part or in its entirety, during this span included the British private equity firm Alchemy Partners; German private equity company Allianz Capital Partners; Three Delta LLP, an investment fund backed by Qatar; the American hedge fund Monarch Alternative Capital; and Terra Firma, the British private equity group struggling with debt demands. H/2 Capital Partners, a hedge fund based in Connecticut, was Four Seasons’ main creditor and ultimately took over.
“By 2019, Four Seasons was managed by insolvency experts,” the Kaiser report noted.
