Report blasts private equity for cutbacks

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Hillary Clinton (D-NY)
Hillary Clinton (D-NY)
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.