Have Private Equity Nursing Homes Done Worse With COVID-19?

By R. Tamara Konetzka, PHD
September 11, 2020

For more than six months now, we have watched the number of deaths from COVID-19 among U.S. nursing home residents and staff pile up, accounting for almost half the deaths in the pandemic so far. Academic researchers have been scrambling to produce rigorous research in hopes of changing this trajectory.

One such effort is a study by Ashvin Gandhi, YoungJun Song and Prabhava Upadrashta called, “Have Private Equity Owned Nursing Homes Fared Worse Under COVID-19?”
Using CMS-mandated survey data on COVID-19 cases, fatalities and PPE shortages in nursing homes, the authors found that nursing homes under private equity ownership were less likely than other nursing homes to have a COVID-19 outbreak or shortages of protective equipment, even after controlling for other nursing home characteristics including location and resident composition. (Private equity-owned facilities were also associated with fewer COVID-19 deaths, but the relationship wasn’t statistically significant.)

Two quick notes on this study: First, it’s a preprint, so it hasn’t been peer reviewed. And second, although they don’t believe it influenced their findings, the authors did note that the data they used is not perfect — it is self-reported by the nursing homes and was not mandated until May 8.
What I find most interesting about this study is that it finds the exact opposite of what many would have hypothesized. Although empirical evidence is mixed, policymakers and advocates often express concern that the profit-generating motives of private equity lead to the extraction of resources and lower quality of care.

But this study suggests that the organizational attributes needed to provide high-quality care may not be the same attributes needed to respond well to a pandemic, consistent with other recent research on COVID-19. While more research is needed to establish the causal pathways behind this relationship, this study provides intriguing food for thought about nursing home ownership and response to a large-scale challenge.

Tamara Konetzka is a professor of health services research at the University of Chicago. Her research focuses on post-acute and long-term care.

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