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A newly released report challenges the long-term care industry’s narrative that private equity (PE) has largely stepped back from nursing home ownership. The report finds private equity funds remain active players in the skilled nursing home space, despite sector claims of PE retreat from skilled nursing.
The nursing home industry lobby group, the American Health Care Association (AHCA), is quoted as saying that PE firms own only a small fraction of nursing homes and that most facilities are locally owned “Main Street” operations, not “Wall Street” ones.
Quotes like this obviously put the public at ease. No one wants profit-minded private equity firms to dictate healthcare decisions in our nation’s nursing homes. However, the recent investigation reveals that this quote is misleading, and that private equity groups are very involved in nursing home ownership. They just conceal their fingerprints now.
Private Equity SNF Ownership Exists, Just Under the Radar
The report contends that PE ownership is both more prevalent and more influential than publicly acknowledged, and points to complex ownership structures and opaque corporate relationships that may mask true control. These complex webs of companies and disclosed ‘front men’ allow private equity groups to hide the control they have over a nursing home chain.
A few years back, the Biden administration exposed private equity’s negative effect on nursing home ownership. Since then, the industry has quietly concealed its involvement in the skilled nursing space, feigning an exit. The Trump administration has prioritized deregulation which affords private equity groups an opportunity to restructure, but retain ownership and control over facilities.
Why Private Equity Ownership of Nursing Homes is a Bad Thing
“Nursing homes owned by private equity continue to face risks related to profit-seeking, use of debt, and
monetization of real estate, which can leave fewer funds for operations and staffing.”
When facility ownership focuses more on its bottom line than positive resident outcomes, the effect is often preventable injuries. As nursing home negligence attorneys, we sue for-profit private equity owned nursing homes far more than non-profit facilities. Non-profit facilities recycle excess funds into hiring staff while PE backed nursing homes drain money to shareholders. More staff = less injuries. It is that simple.
Importantly, the study highlights that when PE firms acquire nursing-home operators, several risks emerge:
- Facilities often inherit high levels of leverage (debt), which can strain operational cash flows.
- Cost pressures may result in reduced staffing, diminished regulatory compliance or weakened oversight.
- Some PE-owned chains have filed for bankruptcy, leaving residents and workers exposed.
The report suggests regulators need more tools to review the impact of ownership changes, demand ownership transparency, and impose public-reporting of cost flows and affiliate transactions.
Genesis Healthcare’s Bankruptcy As a Recent Example
Over the years, Senior Justice Law Firm prosecuted hundreds of nursing home negligence cases against Genesis Healthcare. Many of these cases settled on an agreed upon ‘payment plan’, meaning Genesis agreed to settle the case for a certain amount, payable over a period of time.
Despite repeatedly assuring the public it was adequately funded, Genesis Healthcare recently filed for bankruptcy. By filing for bankruptcy, Genesis aims to wipe out millions in settlements it still owes to families who sued over nursing home neglect.
Genesis Healthcare never disclosed any private equity ownership on its website or marketing materials. Yet through its ongoing bankruptcy proceedings, we are learning that private equity style financial maneuvers drained the company of critical resources, paving the way for its collapse.
A recent investigation reveals this same conclusion:
Genesis’s financial unraveling reflects a familiar pattern: private equity owners extracted value through sale-leaseback deals and layered debt, while the company struggled to maintain operations. The result is another nursing home giant in bankruptcy, and a case study in how financial engineering can undermine long-term care delivery. – Genesis Healthcare files for bankruptcy
The Takeaway: Private Equity Nursing Home Ownership is Concealed Because the Data Shows PE Firms Put Profits Before Safety
The nursing home industry’s framing of PE as a marginal presence is misleading. The findings of the report underscore the need for closer regulatory scrutiny of how PE-owned nursing homes perform, and what safeguards are in place for residents.
Ownership matters: The deeper message is that who owns and finances a nursing home can meaningfully affect operations. If capital structures prioritize investor returns (e.g., via debt service, affiliate transactions) over reinvestment in care, the margin for error shrinks, particularly in a sector already challenged by staffing, regulatory and reimbursement pressures.
Transparency is weak: Many nursing-home portfolios are layered with complex ownership and affiliate ties, making it difficult for regulators, residents or families to see exactly who is in charge and where money flows. This opacity in ownership can impede accountability.
Risk of financialization in care: The article suggests that when long-term care facilities become investment vehicles first and care providers second, the features of patient-safety and quality may get squeezed. For instance, reduced oversight, high debt loads and incentives geared to cost-cutting can all contravene optimal resident care.
Policy implications: Given the findings, the article implies regulators (both state and federal) may need stronger powers to review changes in control, demand publicly report financials, and ensure that ownership change doesn’t degrade quality. The industry’s pushback, that PE is only a small slice, won’t suffice if the slice is expanding or hidden.
Caution for consumers and advocates: For residents, families and advocacy groups, the takeaway is to ask ownership questions: Who owns the facility? Has it been recently acquired by a PE firm? How is staffing? What’s the track record post-acquisition?
A link to the 2025 report can be found here.
Legal Nurse Consultant
