Nursing Homes Raise Profits, Cut Care

Private equity firms buying up, stripping down facilities
By Kevin Spak,  Newser Staff
Posted Sep 23, 2007 5:04 PM CDT
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(Newser) – Caring for grandma has become big business for private firms that are buying nursing homes and making them profit generators. But to do it, they’ve severely cut staff—sometimes below legal levels, the New York Times found. “Chains have made a lot of money by cutting nurses,” said one analyst, “but it’s at the cost of human lives.”

Equity-owned facilities typically underperformed on 12 of 14 standards regulators use to judge homes. “They’ve created a hellhole,” said one woman, who filed a lawsuit after her mother died from a feces-infected bedsore. But such lawsuits are almost impossible to levy, thanks to labyrinthine liability structures firms create—which also helps underperforming homes avoid regulators' fines.