Abstract
Private equity firms have been acquiring US nursing homes; an estimated 5% of US nursing homes are owned by private equity firms. To examine the association of private equity acquisition of nursing homes with the quality and cost of care for long-stay residents. In this cohort study of 302 private equity nursing homes with 9632 residents and 9562 other for-profit homes with 249 771 residents, a novel national database of private equity nursing home acquisitions was merged with Medicare claims and Minimum Data Set assessments for the period from 2012 to 2018. Changes in outcomes for residents in private equity-acquired nursing homes were compared with changes for residents in other for-profit nursing homes. Analyses were performed from March 25 to June 23, 2021. Private equity acquisitions of 302 nursing homes between 2013 and 2017. This study used difference-in-differences analysis to examine the association of private equity acquisition of nursing homes with outcomes. Primary outcomes were quarterly measures of emergency department visits and hospitalizations for ambulatory care-sensitive (ACS) conditions and total quarterly Medicare costs. Antipsychotic use, pressure ulcers, and severe pain were examined in secondary analyses. Of the 259 403 residents in the study (170 687 women [65.8%]; 211 154 White residents [81.4%]; 204 928 residents [79.0%] dually eligible for Medicare and Medicaid; mean [SD] age, 79.3 [5.6] years), 9632 residents were in 302 private equity-acquired nursing homes and 249 771 residents were in 9562 other for-profit homes. The mean quarterly rate of ACS emergency department visits was 14.1% (336 072 of 2 383 491), and the mean quarterly rate of ACS hospitalizations was 17.3% (412 344 of 2 383 491); mean (SD) total quarterly costs were $8050.00 ($9.90). Residents of private equity nursing homes experienced relative increases in ACS emergency department visits of 11.1% (1.7 of 15.3; 1.7 percentage points; 95% CI, 0.3-3.0 percentage points; P = .02) and in ACS hospitalizations of 8.7% (1.0 of 11.5; 1.0 percentage point; 95% CI, 0.2-1.1 percentage points; P = .003) compared with residents in other for-profit homes; quarterly costs increased 3.9% (270.37 of 6972.04; $270.37; 95% CI, $41.53-$499.20; P = .02) or $1081 annually per resident. Private equity acquisition was not significantly associated with antipsychotic use (-0.2 percentage points; 95% CI, -1.7 to 1.4 percentage points; P = .83), severe pain (0.2 percentage points; 95% CI, -1.1 to 1.4 percentage points; P = .79), or pressure ulcers (0.5 percentage points; 95% CI, -0.4 to 1.3 percentage points; P = .30). This cohort study with difference-in-differences analysis found that private equity acquisition of nursing homes was associated with increases in ACS emergency department visits and hospitalizations and higher Medicare costs.
Highlights
Private equity (PE) investment in US health care has grown dramatically, with $750 billion in deals from 2010 to 2019.1 These investments have concerned policy makers because PE firms often create complicated asset, management, and operating structures that may avoid transparency and accountability in patient care
Of the 259 403 residents in the study (170 687 women [65.8%]; 211 154 White residents [81.4%]; 204 928 residents [79.0%] dually eligible for Medicare and Medicaid; mean [SD] age, 79.3 [5.6] years), 9632 residents were in 302 private equity–acquired nursing homes and 249 771 residents were in 9562 other for-profit homes
Residents of private equity nursing homes experienced relative increases in ambulatory care– sensitive (ACS) emergency department visits of 11.1% (1.7 of 15.3; 1.7 percentage points; 95% CI, 0.3-3.0 percentage points; P = .02) and in ACS hospitalizations of 8.7% (1.0 of 11.5; 1.0 percentage point; 95% CI, 0.2-1.1 percentage points; P = .003) compared with residents in other for-profit homes; quarterly costs increased 3.9% (270.37 of 6972.04; $270.37; 95% CI, $41.53-$499.20; P = .02) or $1081 annually per resident
Summary
Private equity (PE) investment in US health care has grown dramatically, with $750 billion in deals from 2010 to 2019.1 These investments have concerned policy makers because PE firms often create complicated asset, management, and operating structures that may avoid transparency and accountability in patient care. Over half of older adults will eventually stay in a nursing home for postacute or long-term care,[6] and 12.5% of physicians provide at least some care in these facilities.[7]. There are 1.3 million long-stay nursing home residents in the US, with 90% being 65 years of age or older.[8]. High rates of emergency department (ED) visits and hospitalization among residents, which often reflect poor quality long-term care, are associated with a disproportionate share of Medicare spending on this population.[10-12]. For these reasons, policy makers have expressed concern about PE acquisitions of nursing homes,[13,14] concern that has been heightened by the toll of the COVID-19 pandemic on residents of these facilities.[15]
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