News and Analysis -- Report blasts private equity for cutbacks

Share this content:

Private equity investors who have been hailed in long-term care circles for scooping up hundreds of facilities at high prices were ripped in a New York Times investigative article for allegedly cutting nursing hours and expenditures to boost profits...

The report analyzed a survey that found that 60% of investor-owned facilities cut expenses and staff while simultaneously raising profits.

Facilities owned by private investment companies were 41% more profitable than the average skilled care facility in 2005, the paper reported. They also accounted for 19% more deficiencies, it noted. And they often have created complicated ownership structures that make it very difficult for people to sue them.

The article set off a maelstrom of negative attention for providers. Federal lawmakers called for an investigation and hearings while providers answered that the front-page Times article is unfair and incomplete.

The analysis was "far from representative of the total long- term care quality picture," said the president of the Alliance for Quality Nursing Home Care.

Equity fund leaders said they should be recognized for supporting the industry.

Next Article in News