Academics say that PE firms are responsible for the deaths of up to 20,000 Medicare patients over 12 years. Reckless.
I don’t know about you, but I am really getting mad at what I am reading. Four academics just came out with a research paper on the impact of private equity on the skilled nursing industry.
Backed up by equations that few of us would understand, they concluded that private equity firms are responsible for up to 20,000 deaths of Medicare patients in nursing homes over a 12-year period.
Really? The study included 128 deals for 1,674 facilities and 136 unique PE firms that acquired nursing facilities. Hmm. 136 “unique” PE firms. Even over 12 years that seems like a stretch.
I know PE firms are not perfect, and the one criticism I have always had is the leverage they often put on their acquisitions, either at the time of the deal or several years later. We all know their names. That is often how they get their investment out, which is part of the formula. But is it killing their customers who fill beds?
But to basically say they killed up to 20,000 Medicare patients that would not have died under a different ownership structure is reckless. The providers themselves usually do not change after a PE acquisition, so who is at fault? And in the case of nursing homes, the PE investors often make capital improvements in order to attract more higher paying Medicare patients, who are more frail and more apt to die because of their co-morbidities. And yes, they are more profitable.
What also really gets me mad about academia is people like Charlene Harrington of University of California’s School of Nursing, who now wants a federal mandate to have RNs on duty 24/7. And, of course, Harvard’s David Grabowski, the ubiquitous Mr. COVID on the news, who says we need to hire more staff and pay them more for better care in our nursing homes. Well duh, but where is the money coming from and where are the people to fill those positions? Hellooo. I really wish academics would spend some real time in long-term care facilities and see how tough a job it is with reimbursement that is often inadequate. It is time for them to get out of la-la land and get into the land of the real.
