by Dan Burns

Jul 3, 2022, 9:30 AM

Private equity has killed many thousands in nursing homes

I acknowledge that when I first saw this I was skeptical. If it’s true, why isn’t it a much bigger story? But the study, which was released over a year ago, does seem to have everything together, and there has been plenty of supporting evidence of how conditions tend to plummet when private equity takes over elder care. And of how the pathologically greedy supreme assholes of private equity screw over pretty much all of us, in many ways.

This paper studies the effects of PE ownership on patient welfare at nursing homes. With administrative patient-level data, we use a within-facility differences-in-differences design to address non-random targeting of facilities. We use an instrumental variables strategy to control for the selection of patients into nursing homes. Our estimates show that PE ownership increases the short-term mortality of Medicare patients by 10%, implying 20,150 lives lost due to PE ownership over our twelve-year sample period. This is accompanied by declines in other measures of patient well-being, such as lower mobility, while taxpayer spending per patient episode increases by 11%. We observe operational changes that help to explain these effects, including declines in nursing staff and compliance with standards. Finally, we document a systematic shift in operating costs post-acquisition toward non-patient care items such as monitoring fees, interest, and lease payments.
(Becker Friedman Institute/University of Chicago)

I’m something of a true crime aficionado. Not hard-core, but I like to browse, now and then. While there have been serial killers in the medical profession with much higher totals, the #1 nursing home killer in the U.S. that I could find was Amy Archer-Gilligan, who certainly killed 4 of her clients and may well have done in as many as 48. (The listed amounts in the article include one additional victim, namely her second husband.) Awful, but chump change compared to what private equity is doing.

And, yes, the intent here is indeed to imply some kind of parallel between private equity bosses and murderous psychopaths. The facts speak for themselves. As far as it becoming a bigger story, hopefully it’s just a matter of time. A GAO investigation is ongoing.