Owner Incentives and Performance in Healthcare: Private Equity Investment in Nursing Homes
Amid an aging population and a growing role for private equity (PE) in elder care, this paper studies how PE ownership aﬀects U.S. nursing homes using patient-level Medicare data. We show that PE ownership leads to lower-risk patients and increases mortality. After instrumenting for the patient-nursing home match, we recover a local average treatment eﬀect on mortality of 11%. Declines in measures of patient well-being, nurse staﬃng, and compliance with care standards help to explain the mortality eﬀect. Overall, we conclude that PE has nuanced eﬀects, with adverse outcomes for a subset of patients.
- Purchases of nursing homes by private equity firms are associated with higher patient mortality rates, fewer caregivers, higher...