Rising Concerns Over For-Profit Nursing Homes

Harvard Professor of Health Care Policy, David Grabowski was featured on the CBS Evening News as part of an “Eye on America” investigative report centered on the growing number of acquisitions of nursing homes by for-profit entities, raising concerns about quality of care and financial transparency. The report highlights this significant shift in ownership structure, focusing on two patient experiences with Aspen Skilled Healthcare, a for-profit chain of nursing homes. 

Currently, over 70% of U.S. nursing homes are for-profit, with private equity firms and real estate companies increasing their investment in the industry. Experts like Grabowski, who specializes in nursing home care research, have raised concerns that this profit-driven model may come at the expense of patient well-being.

In the CBS story, Grabowski suggested, "The vast majority of quality problems in the U.S. are centered in for-profit nursing homes." Studies show these facilities often have lower quality ratings, fewer registered nurses on staff, and more safety violations.

The report also raises questions about financial practices in for-profit facilities. Some facilities have been accused of using "related-party transactions" to divert funds away from direct resident care. These transactions involve payments to entities affiliated with the nursing home, making it difficult to track how taxpayer dollars from Medicare and Medicaid are spent. 

Grabowski emphasized the limitations of current transparency measures based on his research. Although the federal government requires nursing homes to disclose more financial information, these reports do not provide a clear picture of where public funds end up. 

As Grabowski suggested in the CBS story, “We're kind of flying blind with respect to these nursing homes…we really don't know how they're using public dollars and whether they're going into direct resident care."

In the piece, Grabowski argued for stricter regulations that track and provide detailed reporting of the facilities’ finances, "Does Aspen have particular investors? There's no ability to peel that back with the federal data… basically, we need to know for every nursing home in the country, how they're spending public dollars."

The Biden administration is implementing new regulations aimed at increasing nursing home transparency and accountability. These include requiring facilities to disclose ownership structures and implementing minimum staffing requirements. However, the effectiveness of these efforts remains to be seen, especially considering the loopholes in current cost reporting practices.