Taking Note, a financial blogging group, provides further evidence that big business is putting its desires for quick profits over the care of nursing home residents. The nursing home population is exploding. Big business is recognizing the opportunity to profit off this fact and is jumping in the nursing home industry. There are no laws controlling ownership of nursing homes in the United States making transition of ownership from an experienced owner to a large corporation easy.
Maggie Mahar, the articles author, skillfully calculates that roughly 6% of the 2 trillion dollar United States annual health care budget is spent on nursing homes. The percentage of the health care budget is likely to increase. Citing a Genworth Financial survey, the average annual cost for a private room in a nursing home hit $76,460, or $209 per day this year—a 17 percent increase over the $65,185 cost in 2004.
The Center for Disease Control notes that more than two-thirds of the nation’s nearly 16,000 nursing homes were in the hands of private investors. The new owners include prominent private equity firms like Warburg Pincus and the Carlyle Group. The remaining one-third were owned either by the government or by non-profit organizations.
Ms. Mahar cites to a New York Times story that examined more than 1,200 nursing homes purchased by large private investment groups since 2000—plus more than 14,000 other homes—reporters compared investor-owned homes against national averages in multiple categories.
As corporations enter the ‘nursing home industry’, there are indications that patient care is deteriorating. The New York Times article showed the ratio of RNs to nursing home residents was significantly higher at the investor-owned homes (20:1) than the national average (13:1), as was the share of long-term residents who suffered from health deficiencies, anxiety and depression, or needed more help with daily activities such as simply moving around their rooms. In the investor-owned homes, patients were deteriorating.
For more information on nursing homes in New York look here. For laws related to New York nursing homes, look here.
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