CMS has come out with a new paper stating that extensive research finds that the type of nursing home ownership and sponsorship affects the quality of care that facilities provide to their residents. "Extensive research finds that the type of nursing home ownership and sponsorship affects the quality of care that facilities provide to their residents." PDF is attached.
Excerpts from the report are below:
Both "impressionistic evidence" and empirical research documented differences in
quality related to ownership. For-profit and chain-operated nursing facilities tended to devote fewer resources to direct patient care, resulting in poorer quality of care for residents.
Quality of care is now frequently evaluated across three domains. The three domains, first identified by A. Donabedian, are: structure (resources used to provide care; e.g., staffing); process (actions used to provide care; e.g., restraints); and outcomes (end results for patients; may be bad
outcomes, e.g., pressure ulcers, or good outcomes). Consistently, research in the quality of
nursing home care since the IoM report has reported that not-for-profit nursing facilities have higher nurse staffing levels and fewer health care deficiencies than their for-profit counterparts. For-profit facilities, particularly those owned by multistate chains, are more likely to reduce spending on care for residents and to divert spending to profits and corporate overhead.
In 2011, the first-ever analysis of the ten largest for-profit nursing home chains reported that
between 2003 and 2008, compared to all other ownership groups, facilities owned by the top ten
for-profit chains had:
The lowest staffing levels;
The highest number of deficiencies identified by public regulatory agencies; and
The highest number of deficiencies causing harm or jeopardy to residents.
The Government Accountability Office (GAO) reported in 2011 that nursing facilities acquired
between 2004 and 2007 by the top ten private equity firms:
Had more total deficiencies than not-for-profit facilities;
Reported lower total nurse staffing ratios; and
Showed capital-related cost increases and higher profit margins, compared to other
In 2010, the GAO reported that compared to other nursing facilities, Special Focus Facilities
(i.e., those identified by CMS as among the poorest performing facilities nationwide):
Are more likely to be part of a chain and for-profit, compared to other facilities;
Have fewer registered nurses per resident day; and
Are ranked lower on CMS’s Five-Star System.
The GAO reported in 2009 that compared to other nursing facilities, Special Focus Facilities,
which have more deficiencies and more serious deficiencies than other facilities, are:
More likely to be for-profit;
More likely to be part of chain; and
Have almost 24% fewer RNs/resident/day and fewer nursing staff at all levels/resident/day.
In September 2007, an investigative report in The New York Times found that:
Nursing facilities owned by private equity firms were 41% more profitable than other nursing
One facility it focused on, in the year after its takeover by a private equity firm, cut the
number of registered nurses in half and cut spending on nursing supplies, activities for
residents, and other supplies, leading to poorer resident care.
A recent study by LeadingAge New York, the association that represents not-for-profit nursing
facilities in New York State, found that not-for-profit facilities:
Performed better on most measures than for-profit facilities in the state;
Had fewer residents using antipsychotic drugs or with physical restraints;
Had lower hospitalization rates, and more discharges to home;
Had more nursing staff and fewer survey deficiencies and spent more money per day on
nursing costs and food.
A review and meta-analysis of 82 studies comparing quality of care in for-profit and not-for-profit
nursing facilities reported that nearly all the studies found higher quality, higher staffing, and fewer
pressure sores in not-for-profit facilities. Not-for-profit facilities had better outcomes on four
key measures of quality:
"More or higher quality staffing;"
Lower prevalence of pressure ulcers;
Lower prevalence of restraints; and
Fewer government-cited deficiencies.
The authors estimated that if all nursing homes in the United States were operated on a not-forprofit basis:
7,000 residents with pressure sores would not have them;
Residents would receive 500,000 more hours of nursing care each day.