Performance Improvement 2011-2012. What are Current Trends in Ownership Structure of Nursing Homes?

01/01/2012

As private equity firms are increasingly buying and investing in nursing home chains, policymakers are concerned with the effect of corporate structure on the quality of care provided. Based on detailed ownership data from the State of Texas, ASPE's study found that the trend in ownership structure of nursing homes is more complex with increasing numbers of layers of organization between the nursing home and the actual individual owners. The quality of care has nevertheless remained the same as before the changes in corporate structure.

Individual nursing homes are increasingly using limited liability structures. A limited liability structure is one in which each owner has limited personal liability for the debts and actions of the company. By contrast, in a sole or general partnership each owner is personally responsible for all risks, liabilities, and debts of a company. Most of the limited liability corporations and partnerships in this study were for-profit facilities. Corporate structures often have multiple layers of limited liability entities between the individual nursing home and the ultimate owners of multiple facilities. The use of management companies to deliver care has increased in the past 10 years. Texas has experienced an increase in separate ownership of operations and ownership of physical property through lease agreements and real estate investment trusts. Quality of care does not appear to change as a result of changes in corporate structure. Nursing homes that were poorer performing facilities when part of a national nursing home chain, remained poorer performing facilities after the change in corporate structure.

Report Title: Nursing Home Ownership Trends and Their Impact on Quality of Care http://aspe.hhs.gov/daltcp/reports/2009/TXNHown.htm
Agency Sponsor: OASPE-ODALTCP, Office of Disability, Aging, and Long-Term Care Policy
Federal Contact: Susan Polniaszek, 202-690-6443
Performer: Harvard Medical School
Record ID: 9340 (Report issued March 26, 2010)

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