A growing body of research shows that private equity-owned facilities have worse health outcomes than all other facilities.A sort of February 2021 Research Research from the National Bureau of Economic Research found that traveling to a facility owned by a private equity firm increases a resident’s chance of dying by 10 percent compared to staying in other types of facilities. The study was conducted from 2005 to 2017.

A sort of November 2021 Cornell University study Residents of private-equity-owned nursing homes were found to be more likely to visit the emergency room or be hospitalized than residents of other for-profit nursing homes. Both studies found that the higher cost per resident of health insurance means more taxpayer dollars are being spent on private equity facilities.

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Industry trade associations have dismissed the findings, saying the studies do not provide a comprehensive picture of how care at private equity-owned homes differs from care at other facilities.

“The focus on nursing home private equity is a diversion,” said Mark Parkinson, president and chief executive of the industry group. American Health Care Association/National Center for Assisted LivingThese investor groups have turned to other “more lucrative” health care industries, he added in the statement. There is evidence Private equity is increasing its investment in home health care and hospice care as more senior Americans choose to age in place.

“If policymakers want to talk about private equity, it’s a conversation across the health care system, not just nursing homes,” Parkinson said.

this American Investment CouncilAdvocacy groups for the private equity industry have countered these findings with other research.A private equity-owned nursing home Perform better under COVIDanother found living in a private equity-backed house Does not affect the quality of care for residents (Although this study used old data and had a limited sample size).

Still, it’s indisputable that private equity firms buy nursing homes because they’re likely to be profitable, he said Robert Taylor BraunAssistant Professor of Population Health Sciences at Cornell University and author of the November 2021 study.

“The main draw is that the profit margins are low, and they get valuable real estate through the purchase,” Braun said. “Furthermore, the way these deals are structured allows you to bring in parties that a private equity firm might have, such as maid services [and] Clinician Services” and charge higher rates than the market suggests.

Profits can also be maximized by reducing the number of employees or hours worked, thereby affecting the care of residents, says Erin O’GradyResearch and Campaign Manager Private Equity Projecta private equity regulator.

The Biden administration is working to improve the quality of nursing homes—for example, directing Medicare to set higher standards for facilities and directing the Department of Health and Human Services Check Private Equity OwnershipBut some initiatives will require assistance from Congress, which has so far been slow in oversight. Still working on the data collection phase.