PRIVATE EQUITY’S INVESTMENTS IN PRIVATE DUTY NURSING

The report analyzes the incursion of private equity into private duty nursing (PDN), a critical service for medically complex individuals. It argues that the private equity business model—characterized by leveraged buyouts, roll-up strategies, and high debt—diverts Medicaid funds away from direct patient care to service debt and generate investor returns. Through case studies of Team Select Home Care and Aveanna Healthcare, the document illustrates how these financial pressures lead to staffing shortages, low wages, and compromised patient safety. It highlights the 'preferred payer' strategy used by Aveanna to deprioritize patients with lower-reimbursing payers and notes industry opposition to the CMS 80/20 pass-through rule. The report concludes with policy recommendations including antitrust enforcement, limits on healthcare debt, and the expansion of paid family caregiver programs.

• Private equity firms utilize a 'roll-up' strategy in the fragmented private duty nursing market to consolidate small agencies into larger chains, which allows them to sell investments at higher multiples.
• High debt service obligations can lead to harmful cost-cutting measures, including low wages, understaffing, and a reliance on temporary staff, which negatively impacts patient care and family stability.
• Team Select Home Care has engaged in 'stealth consolidation' by acquiring agencies without immediate public announcement and has used dividend recapitalizations, such as a $203.11 million deal in June 2024, to pay out investors using company debt.
• Aveanna Healthcare, the largest US provider of private duty nursing, has operated at a net loss for four fiscal years and carried $1.47 billion in debt as of 2024, with interest payments being its most significant use of operating cash flow.
• Aveanna employs a 'preferred payer' strategy, prioritizing contracts with payers who offer higher value-based rates and terminating contracts with those who do not, which can deprioritize care for certain patients.
• There is a significant gap between Medicaid fee-for-service reimbursement rates and the actual wages paid to nurses by private equity-owned firms like Aveanna and Team Select in states such as Colorado, Pennsylvania, Illinois, and Texas.
• Major industry players and trade groups, including Aveanna, have opposed the CMS 80/20 pass-through rule, which would require 80% of Medicaid payments to go directly to direct care worker compensation by 2030.
• The report identifies a critical labor shortage in private duty nursing, with The Arc reporting that 50% to 70% of shifts nationwide were unfilled as of 2023.

APA

Bugbee, M. (2025). PRIVATE EQUITY’S INVESTMENTS IN PRIVATE DUTY NURSING. Private Equity Stakeholder Project. https://pestakeholder.org/wp-content/uploads/2025/09/PESP_Report_PrivateDutyNurse_2025.pdf

Chicago

Bugbee, Mary. PRIVATE EQUITY’S INVESTMENTS IN PRIVATE DUTY NURSING. Private Equity Stakeholder Project, 2025. https://pestakeholder.org/wp-content/uploads/2025/09/PESP_Report_PrivateDutyNurse_2025.pdf.

Wikipedia

{{cite report |last1=Bugbee |first1=Mary |title=PRIVATE EQUITY’S INVESTMENTS IN PRIVATE DUTY NURSING |publisher=Private Equity Stakeholder Project |date=July 2025 |url=https://pestakeholder.org/wp-content/uploads/2025/09/PESP_Report_PrivateDutyNurse_2025.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bugbee2025private, author = {Bugbee, Mary}, title = {{PRIVATE EQUITY’S INVESTMENTS IN PRIVATE DUTY NURSING}}, institution = {Private Equity Stakeholder Project}, year = {2025}, month = jul, url = {https://pestakeholder.org/wp-content/uploads/2025/09/PESP_Report_PrivateDutyNurse_2025.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }