Nursing Home Chain Ownership Changes are Linked to Poor Quality of Care

A fascinating research article published in the May issue of Health Affairs reports that nursing homes that are frequently bought and sold by nursing home chains are plagued by low quality. Researchers from several distinguished universities came to this not too surprising conclusion after tracking nursing home transactions, such as mergers and acquisitions, throughout the nation between 1993 and 2010. The analyses and findings are described as the first comprehensive picture of how chain involvement in the nursing home sector has evolved.

The picture it paints is that nursing home residents throughout the nation are poorly served by the chaotic behaviors of nursing home chains. Here are some of the key findings:

• Two defining features of the nursing home industry are the tremendous churn in chain ownership and the perception of low-quality care at many facilities.
• On average, about 1,500 nursing homes annually experienced a change related to chain ownership in the period 1993-2010.
• The proportion of chain owned nursing homes increased substantially during the study period, growing from 44% in 1993 to 51% in 2010.
• The proportion of large chains nearly doubled while the number and proportion of small chains decreased.
• Only two of the top ten chains in 1993 were still in operation under the same ownership structure by 2010.
• Nursing homes owned by chains had many more deficiencies than independent nursing homes did.
• Chains targeted the worst-quality nursing homes for acquisition and poor quality of care persisted in these facilities after they were acquired.

The authors present a range of thoughtful recommendations, including regulating chains, surveying nursing homes as a group within a particular chain, rating and reporting the performance of chains, improving scrutiny of ownership transactions, requiring public notification of impending sales, and giving the public more useful and accurate information on chain ownership on state and federal websites.

The article, Low-Quality Nursing Homes Were More Likely Than Other Nursing Homes To Be Bought Or Sold By Chains In 1993–2010, is available from Health Affairs.