Pulling Back the Veil on Today’s Private Equity Ownership of Nursing Homes

The report argues that private equity ownership of nursing homes often leads to reduced staffing, higher patient mortality, and decreased quality of care due to profit-seeking tactics and opaque corporate structures. It highlights specific firms like Formation Capital, GI Partners, and Portopiccolo Group, noting their roles in facility acquisitions and associated controversies regarding COVID-19 outbreaks and fraudulent billing.

• A 2020 National Bureau of Economic Research (NBER) study found that private equity ownership of nursing homes increased the short-term mortality of Medicare patients by 10%, which implies approximately 20,150 lives were lost between 2005 and 2017.
• Private equity buyouts are associated with operational declines, including a 3% average decrease in hours provided by frontline nursing assistants and a 1.4% decline in overall staffing. Additionally, the probability of patients taking antipsychotic medications increases by 50%.
• Financial structures used by private equity firms, such as leveraged buyouts and sale-leaseback transactions, divert funds away from patient care. Following buyouts, interest payments increase by approximately 325%, lease payments by 75%, and management fees by 7.7%, while cash on hand decreases by about 38%.
• Formation Capital is a major investor with at least 40,000 beds in 22 US states and the UK. Its subsidiary, Consulate Healthcare, has been scrutinized for poor quality, alleged fraudulent billing, and severe COVID-19 outbreaks, including one in Windsor, Virginia, where 63 residents contracted the virus and 8 died.
• GI Partners owns Plum Healthcare, the second largest nursing home company in California. Plum facilities experienced significant COVID-19 outbreaks; specifically, the Redwood Springs Healthcare Center in Visalia saw 115 residents and 61 staff test positive, resulting in 26 resident deaths.
• Portopiccolo Group acquired more than 20 nursing homes during the pandemic, often targeting lower-quality facilities. A study found that 43% of its nursing homes have a one-star CMS quality rating, compared to a national average of 17%.
• Fillmore Capital Partners owns Golden LivingCenters, which significantly reduced its footprint from 300 facilities in 21 states in 2006 to just 24 locations in Indiana by May 2021. Its pharmacy service, AlixaRx, paid $2.75 million to settle DOJ allegations of improperly dispensing controlled substances between 2014 and 2017.

APA

O’Grady, E. (2021). Pulling Back the Veil on Today’s Private Equity Ownership of Nursing Homes. Private Equity Stakeholder Project. https://pestakeholder.org/wp-content/uploads/2021/07/PESP_Report_NursingHomes_July2021.pdf#page=10

Chicago

O’Grady, Eileen. Pulling Back the Veil on Today’s Private Equity Ownership of Nursing Homes. Private Equity Stakeholder Project, 2021. https://pestakeholder.org/wp-content/uploads/2021/07/PESP_Report_NursingHomes_July2021.pdf#page=10.

Wikipedia

{{cite report |last1=O’Grady |first1=Eileen |title=Pulling Back the Veil on Today’s Private Equity Ownership of Nursing Homes |publisher=Private Equity Stakeholder Project |date=July 2021 |url=https://pestakeholder.org/wp-content/uploads/2021/07/PESP_Report_NursingHomes_July2021.pdf#page=10 |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ogrady2021pulling, author = {O’Grady, Eileen}, title = {{Pulling Back the Veil on Today’s Private Equity Ownership of Nursing Homes}}, institution = {Private Equity Stakeholder Project}, year = {2021}, month = jul, url = {https://pestakeholder.org/wp-content/uploads/2021/07/PESP_Report_NursingHomes_July2021.pdf#page=10}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }