Lauren Lu, a Tuck professor, studies what happens when nonprofit nursing homes are acquired by for-profit firms.
Nursing homes in the United States were already struggling before the COVID-19 epidemic disproportionately harmed the elderly.
A health-care consultancy firm’s study revealed that for the first time in 34 years, more than half of the country’s nursing homes had a negative operating margin.
More and more seniors are choosing to stay in their own homes for as long as possible, avoiding the costs of a nursing home. This was due, in significant part, to a reduction in occupancy in long-term care facilities as people preferred to receive care at home if they could.
Many nonprofit nursing homes are in dire financial straits, which has caused the proportion of nursing homes acquired and run by for-profit companies like ordinary businesses and private equity firms to rise.
The proportion of for-profit nursing homes in the United States rose from 65 percent to 70 percent between 2000 and 2017. State and federal lawmakers are concerned that for-profit businesses will have a detrimental influence on the quality of care at the facilities they acquire.
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