With all that is going on in the country and abroad, it was nice for President Biden to carve out some time to talk about nursing homes in his State of the Union address last night. He said, “as Wall Street firms take over more nursing homes, quality in those homes has gone down and costs have gone up. That ends on my watch.” He was citing JAMA Health Forum’s November 2021 study linking private equity ownership of nursing homes with more hospitalizations and higher Medicare costs, but we’ve said before that study is very misleading.
Mr. Biden also promised that Medicare would set higher standards for nursing homes, while also cutting costs. We’re not sure what kind of voodoo government policy that would be, because earlier in the day, the White House also released a fact sheet detailing new minimum staffing requirements and a goal to reduce the number of shared occupancy rooms. Great, and hopefully Medicaid and Medicare reimbursement rates will help cover those costs. The fact sheet also stated that HHS and other federal agencies will not only examine the role of private equity, but also REITs and other investment ownership, and increase accountability and transparency of SNFs’ corporate ownership.
We can get behind some of the changes: jumping through hoops to determine the actual ownership of facilities has always frustrated us, especially when serious quality of care or financial fraud issues arise. But the last two years have proven that nursing homes are the media’s and politicians’ favorite punching bag, followed by the private equity boogeyman. So we are doubtful that reforms will actually fix things, rather than just score political points or ratings.
