[20,000 nursing home residents died from 2004 to 2016 because they
lived in nursing homes run by private equity firms, according to
updated data.] [[link removed]]

HOW WALL STREET KILLED GRANDMA  
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Julia Rock and David Sirota
February 22, 2021
David Sirota's The Daily Poster [[link removed]]

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_ 20,000 nursing home residents died from 2004 to 2016 because they
lived in nursing homes run by private equity firms, according to
updated data. _

, BSIP/Getty Images

 

As governors in New York and Florida face political crises over their
handling of the pandemic, the scandals have spotlighted how a
disproportionate amount of COVID casualties have occurred in the
nation’s nursing homes. The situation is a cautionary tale not only
about political corruption, but about the consequences of a nursing
home infrastructure being run by for-profit corporations — and now a
study documents some of the body count.

The analysis found that between 2004 and 2016, more than 20,000
Americans perished as a consequence of living in nursing homes run by
private equity firms. The data showed that going to a
private-equity-owned nursing home significantly “increases the
probability of death during the stay and the following 90 days” as
compared to nursing homes with a different ownership structure.

The study from University of Pennsylvania, University of Chicago and
New York University researchers evaluated data from 15,000 nursing
homes across the United States, alongside Medicare patient data, to
assess the impacts of private equity ownership on patient outcomes. In
all, the researchers found that the deaths accounted for “about
160,000 lost life-years.”

Private equity firms typically take over existing corporations with
borrowed or investor money and then impose cost-cutting measures to
maximize revenues — often in preparation for selling off the newly
stripped down firms at a profit. In the health care sector, private
equity buyouts have been associated with lower staffing levels, more
frequent citations for health and safety violations, shortages of
supplies like ventilators that are crucial for COVID patients, and
other failings tied to the constant imperative to cut costs.

In all, 70 percent of nursing homes currently operate as for-profit
businesses, far more than other healthcare facilities. Only about one
quarter of hospitals, for example, are for profit.

Less Staffing, More Deaths

The new study — which updates the researchers’ previous findings
— offers clues about why private equity ownership of nursing homes
has resulted in higher casualty counts. As the paper noted, private
equity-owned nursing homes have lower staffing levels than their
counterparts, which is directly correlated with patient outcomes.

“We find that [private equity] ownership leads to a 3 percent
decline in hours per patient-day supplied by the frontline nursing
assistants who provide the vast majority of caregiving hours and
perform crucial well-being services such as mobility assistance,
personal interaction, and cleaning to minimize infection risk and
ensure sanitary conditions,” reported the study’s authors.

In total, the researchers found that staffing levels in private
equity-owned nursing homes were 1.4 percent lower than staff levels in
other facilities. The staff reduction mostly impacted patients who
were older but less sick, concluded the researchers, because “there
may be less scope to reduce the costs of care for the sicker patients,
as they have explicit medical needs.”

These were the same type of patients, however, that the researchers
discovered experienced higher mortality rates in private equity-owned
facilities. In other words, the reduced staffing levels at private
equity-owned nursing homes could help explain the facilities’ higher
death rates.

The new data echoes a Government Accountability Office report from a
decade ago, which found that investor-owned nursing homes “had more
total deficiencies than nonprofit homes both before and after
acquisition.”

Deadly Consequences During The Pandemic

The current nursing home scandal in New York underscores the
potentially deadly consequences when for-profit nursing home companies
are shielded from consequences for their corporate decisions. There,
critics argue that Gov. Andrew Cuomo’s law shielding nursing home
executives from lawsuits removed a deterrent to corporations cutting
corners in ways that jeopardized lives.

In October, a study published in the Journal of the American Medical
Association found that during the COVID pandemic, private equity-owned
nursing homes had lower supplies of personal protective equipment for
their workers when compared to all other types of nursing homes.

A separate report by Americans for Financial Reform found that in New
Jersey, the state with the highest nursing home death rates during the
pandemic, private equity-owned nursing homes had COVID infection rates
that were 24.5 percent higher than the statewide nursing home average,
and COVID death rates that were more than 10.2 percent higher.

Meanwhile, the New York Times’ own analysis last year found that
“for-profit nursing homes — roughly 70 percent of the country’s
15,400 nursing homes and often owned by private investors —
disproportionately lag behind their nonprofit counterparts across a
broad array of measures for quality (and) are cited for violations at
a higher rate than nonprofit facilities.”

Private Equity Could Face Congressional Scrutiny

The relationship between private equity and the health care industry
recently took center stage in Congress during last year’s debate
over surprise billing.

Private equity firms Blackstone and KKR have acquired hospital
staffing firms in recent years, which have been associated with high
levels of “surprise billing” — a euphemism for the practice of
sending people huge medical bills after they visit hospitals that are
part of their insurance networks and are treated by doctors or staff
who are out of network.

In 2019, a dark money group funded by hospital staffing companies
owned by Blackstone and KKR spent $75 million on an advocacy campaign
opposing legislation to end surprise billing. Later that year, after a
bipartisan deal had been reached on the bill, the legislation was
killed by Rep. Richie Neal, a lawmaker who received sizable campaign
donations from Blackstone.

Lawmakers passed a new provision to end surprise billing in
December’s budget bill, but the final version was watered down by
lobbying from private equity-owned staffing firms, and is expected to
drive up health care costs.

Last week, congressional Democrats introduced legislation designed to
close tax loopholes and make private equity investing less lucrative.
That followed Democratic lawmakers in 2019 requesting information from
private equity giants about their nursing home business practices.

In 2009, Democrats who had just won control of Congress held hearings
about the role of private equity in the nursing home industry.
Democrats who have now regained power in Congress once again have the
power to launch another investigation into the matter.

In the interim, however, donors from private equity and investment
firms have more than doubled their campaign contributions to
Democrats. So it remains to be seen whether Democratic lawmakers will
launch another review of the industry.

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This article reprinted with permission from David Sirota. The
newsletter relies on readers pitching in to support it. If you like
what you just read and want to help expand this kind of journalism,
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