Dossier mode

The purest test of the private-equity model is one where the product is human care and the customer is the government — and there, the model converts directly into a higher death rate.

The ~11% mortality increase, the staffing cuts, and the +50% antipsychotic use are FACT off patient-level Medicare data with a causal design. The public pays via Medicare/Medicaid; owners extract via fees and related-party rent. The industry's 'we bring capital' defense is PROBABLY TRUE but explains the baseline, not the delta.

the instrumented local average treatment effect on mortality when a private equity firm acquires a nursing home — an estimated 20,000+ excess deaths over roughly twelve years.

NBER w28474

PE ownership raises nursing-home mortality by about 11%.

'Owner Incentives and Performance in Healthcare: Private Equity in Nursing Homes' (Gupta, Howell, Yannelis, Gupta, NBER) used patient-level Medicare data and, after instrumenting for patient–home matching, recovered a ~11% local average treatment effect on mortality — an estimated 20,000+ excess deaths over ~12 years. Not a raw correlation; the design isolates the ownership change.

The care gets cut where it's hardest to see — staffing and sedation.

PE-owned homes cut front-line nursing hours while antipsychotic use rises ~50% — drugs known to increase mortality in older institutionalized dementia patients, and a cheap substitute for staff. Resident mobility declines. The cuts land on the least visible, most essential parts of care.

The public pays the bill — and the owners pull cash out through fees to themselves.

Nursing-home care is financed largely by taxpayers (Medicaid for long-term care, Medicare for short-term skilled nursing — the study's own data). That public money doesn't all reach the bedside: the research finds higher monitoring/management fees routed to the PE owner, and the industry commonly splits a home into an operating company and a property company so the home pays rent to an entity the same owners control.

The industry's defense: PE brings capital, and quality problems predate it.

The rebuttal — PE brings capital to an underfunded sector, Medicaid reimbursement is too low, and nursing-home problems exist across ownership types — is partly true. But it explains the baseline, not the study's core finding: holding the sector's problems constant, the switch to PE ownership itself made survival worse.