Private equity investment in assisted living: Distinct impacts and policy considerations

Private equity investment in assisted living: Distinct impacts and policy considerations
Health Affairs; by Kali S. Thomas, John R. Bowblis, Paula Carder, Cassandra Hua, Sean Shenghsiu Huang, Yashaswini Singh, Lindsey Smith, Momotazur Rahman; 6/18/24
Numerous academic publications, newspaper articles, and government reports have addressed private equity (PE) investment in health care entities, including nursing homes, hospitals, and physician practices. Proponents argue PE investment brings much-needed financial capital, allowing health care providers to renovate aging facilities, invest in the latest technology, spur innovation, and enhance operational efficiency. However, there are also concerns that PE investment has been associated with higher prices, lower quality, and inadequate staffing levels. Such changes could lead to patient harm, even death. ... However, one significant and continually expanding sector—assisted living—has several distinct features that, compared to other health care entities, may lead to different outcomes from PE investments. Assisted living is paid for differently. In relation to PE investments, the arrangement of assets and operations in assisted living are different from other health care sectors. This distinction creates unique and more nuanced incentives. Crucially, there’s actually no evidence to date on the effect of PE investment on the welfare of the people who reside and work in assisted living communities.