Investment Firms Make Retirement Homes Profitable By Making Them Hell Holes

If you wanna make an omelet, you gotta break a few eggs—even if those eggs are old people who die from bedsores that have become infected. The Centers for Medicare and Medicaid Services say that on average, patients at nursing homes that are bought by private investment firms do worse than those at other nursing homes, with higher rates of depression, increased loss of mobility, and less ability to dress and bathe themselves. The New York Times has a horror story on 48 Florida nursing homes where staff was reduced to levels below mandatory requirements and didn’t repair equipment or keep facilities sanitary. Even senior activities were reduced. And there are thousands of (now profitable) nursing homes across the country that are owned by private investment companies.

Says the Times article,

The typical nursing home acquired by a large investment company before 2006 scored worse than national rates in 12 of 14 indicators that regulators use to track ailments of long-term residents. Those ailments include bedsores and easily preventable infections, as well as the need to be restrained.

One problem is that private investment companies create such “Byzantine” corporate structures that it’s hard to track whether or not they’re meeting requirements, much less know who to sue if you feel your loved one suffered from—or worse, died from—neglect. By contrast, publicly owned nursing homes are required to disclose such information.

As the Baby Boom generation ages, nursing homes have become a sure-fire business investment, if you can cut costs and avoid bank-busting litigation. At the present, not much can be done to prevent or reign in the problem. Consumer advocacy group The National Citizens’ Coalition for Nursing Home Reform offers a Fact Sheet that can help you choose the best nursing home—including how to use the data provided by Medicare to evaluate nursing homes in your area.

“More Profit and Less Nursing at Many Homes” [New York Times]

“A Consumer Guide to Choosing a Nursing Home” [The National Citizen’s Coalition for Nursing Home Reform]
(Photo: Getty)


Edit Your Comment

  1. CumaeanSibyl says:

    Don’t forget that part of being cost-effective is paying nice low wages to the workers entrusted with patient health and comfort. Caregiver wages around here start at about $1 above minimum. This, of course, ensures high levels of motivation and compassion among your employees, and certainly prevents anything like theft, shoddy work, or the petty cruelty of the disenfranchised toward the helpless.

  2. mattbrown says:

    “How ’bout a warm glass of shut-the-hell-up?”

    Seriously, this is a terrible result of the free market. There are zones of health care where this same thing applies; in order to make (and keep) the most profit, the owners tend invest little, if any, money back into the facilities. People forget that they can hire the mandatory level of workers, just pay so little that the quality of the workers is so low, that the patients may be better off without them present.

    Again, simply a frustrating result of free market capitalism. What do you expect?

  3. Caswell says:


    I expect family to care enough not to put their elders in a low quality home, or to pull their elders out of a home that’s abusing them after they’ve moved in.

    You don’t have to wait until it’s gotten to a level where a lawsuit is your only recourse. That’s free market capatalism as well – you can take your money elsewhere.

    Was Walter Reed a product of free market capitalism as well?

  4. stanfrombrooklyn says:

    Soylent Green would solve this problem.

  5. ltlbbynthn says:

    @Caswell: unless they can’t freaking afford it or that home is the only one which will accept their loved ones. These places have waiting lists months long. Grow a heart.

  6. olegna says:

    Worst job I ever held was janitor in an old folk’s home — in the lock up for Alzheimer patients.

    A little advice: don’t just tour an old folk’s home. If they don’t lest you have free reign to look where you want to, then walk away.

    More advice: check rooms with sad looking patients. Look behind the respirators (or other pieces of heavy equipment that maybe aren’t moved and cleans every day) next to their beds. I did this one time at my job and a next of cockroaches (HUNDREDS OF THEM) scattered. Nobody had cleaned behind there in what looked like form the day it was placed in its position next to the bed. The guy looked like nobody had every visited him. His jaw had been broken (I guess they do this with some seizure patients to keep them from biting off their tongues) and hung down eerily to one side. I was suddenly in a David Lynch film.

    Better advice: Keep a shotgun. When you’re about to be sent to old folks prison by New World Family Unites (welcome to Futureshock and Ayn Rand’s world) blow your f**king head off. Nobody needs to end their days in a piss-smelling corporate prison for the elderly. If families don’t want to handle their responsibility, then they should allow euthanasia. NOBODY wants to end up in a place like that.

  7. shfd739 says:

    As a paranedic I go in these places multiple times a week. Almost all of them are hell holes. The nurses are rejects that cant get a job anywhere not to mention clueless about medical conditions. The only one I would put my family in is run by catholic nuns and it has a waiting list.

  8. Bay State Darren says:

    patients at nursing homes that are bought by private investment firms
    I read this phrase wrong the first time and missed the non-bolded word. I was thinking: “WTF, how evil are they?!”

  9. bygones says:

    There is nothing wrong with a free market… as long as the goods and services offered in the marketplace are things that can appropriately bear a pricetag well i.e. cups of coffee, cab rides, a housecleaning, etc.. It’s immoral for healthcare not to be socialized. Profiting from someone’s basic healthcare need is extortion; buy-it-or-die. ‘Priceless’ things can’t be (and shouldn’t be) ‘owned’ or provided for profit (aside from paying an appropriate wage to those who provide). Police, fire dept., local library, the highest education you have the brains for (including the required texts), art… all should be underwritten by society because it is impossible to put a price on such things. How much would you pay for a cop when you really need one?

  10. kellyhelene says:

    My mother’s worked in nursing homes most of my life… don’t paint everyone there with the same brush. She and her coworkers were all extremely devoted people. They knew the place was awful, they knew the owner was a cheap bastard, but they did everything they could to make the lives of the patients better. (up to and including things like taking patients without families to their own homes for Christmas dinners and the like).

    Some are there (even though they can get work elsewhere quite easily) because they know how bad it is, and want to be where they can do the most good.

  11. superflippy says:

    Usually, I think of publicly-held companies as the ones that will do anything short of murder to boost revenues in order to keep stock prices up. After all, their obligations are to the stockholders, not the customers or the public.

    But I hadn’t thought of private investment firms, which seem to combine the financial ruthlessness of publicly-traded companies with the ability to avoid all kinds of disclosure. Scary.

  12. othium says:

    I work as a personal care attendant in a campus-like setting of seven homes for adults with physical disabilities. The pay is quite low and I have to hold a second job to make ends meet. Most of my fellow workers do as well. The staff turnover rate is extremely high and there is always the possibility of being forced to work a double (or even triple!) shift due to a staff calling in sick. You can imagine what sort of motivation and compassion this inspires in those who work here. Management is very aware that a raise in pay would attract more applicants for the posistion, but they would make less money. I have a mandatory meeting to go to this afternoon on my one day off this week. It’s especially galling to watch the upper management drive up in an expensive car and then sit in on a meeting to explain why they are taking 25% of our COLA raise for “admin costs” instead of passing it to the workers who badly need it. (We end up getting a .10 cent raise.)

    I work as hard as I can and do many tasks that are not required to make the daily lives of my consumers more enjoyable. A small percentage of the staff work this hard. Most just do the bare minimum to not get fired.

    I have been injured on this job and have to take pain medication daily to get by. Sadly, with some more staffing cutbacks looming, I will have to leave this field as it is becomming too hazardous to my health and I will seek employment in a different field.

    I wish there were a way to get the state goverenment to institute a “wage pass-through” to make sure more money gets to the frontline care workers in long term care facilities. With less workers available and the rising population of those who need care, this crisis will only get worse until something is done to head it off.

    Sorry for the long post..

  13. Caswell says:


    The United States can’t even afford what little bit of socialized medicine we have. Medicare is already operating at a deficit, and the baby boomers haven’t even started to retire. It’ll get even worse then, when Social Security starts running in the red instead of providing surpluses to the general fund (the Social Security “trust fund” is a lie).

    If people want socialized medicine they need to figure out how to pay for it. Politicians telling us that we can have it for $110 billion a year is a complete joke to anyone with the motivation to look up how much we’re already spending.

    What’s truly immoral is our modern government’s affinity for passing the bill for today’s entitlements to tomorrow’s citizens. $40 trillion in Medicare / Social Security obligations to current citizens and counting…

  14. Elvisisdead says:

    @othium: Good for you. I’ll go ahead and speak for everyone who has ever had someone they love in one of these places, and say, thanks.

    My great grandmother was in one in rural NC. It was horrible, but it was the only one within 90 minutes of where she lived. My granddad would make the trip to see her once per week, and he was the only one who did. She had never been bathed, and was always wearing someone else’s clothes. Apparently, they had a socialist approach to patient belongings.

    Othium, just remember that when an HHS quality of care audit comes to town, you’ll be OK. The administrators will be up the proverbial creek. HHS looks for facilities like these and shuts them down. If you know of quality of care issues going on, *please* report them to the HHS OIG’s hotline. You can find it at [] If you call, you’ll talk to an investigations analyst who will take some information from you, and get the details. You can trust them.

    If you see it, help make it stop.

  15. Trai_Dep says:

    Well, the nice thing about the Magic of the Marketplace is, once your parents are unwitting victims of rapacious operators who learned their craft from Romanian orphanages, become physically crippled and mentally scarred for the rest of their short, pitiful life, these places will eventually close. So your alternate set of kindly parents will be spared. Who needs government regulation when everyone wins?

  16. pestie says:

    @bygones: I couldn’t possibly agree more. Maybe if we’d throw less money at defense contractors for whiz-bang multi-billion-dollar weapons systems, and spend a little less money invading other countries, we could have what the rest of the free world has.

  17. infinitysnake says:

    I’m often shocked at the differences between for and not for profit outfits in similar sectors. As an example, with out foermer physician, we’re asked to use an outside, for-profit lab facility for blood tests. I found the place gross, cramped, and not terribly clean, with old, beat up furniture and big scribbled signs demanding we not! steal! Pens!

    Now that we’re with a nonprofit, their lab is huge, spacious, and clean. The seats are padded, private, and clean, the techs polite and friendly…I get an idea how the East Germans felt when they first walked over the border.

  18. zolielo says:

    Only tip I have is make sure that they are HUD approved for assisted live. That should set a basic standard of living.

  19. zolielo says:

    ^ living

  20. CumaeanSibyl says:

    @kellyhelene: Problem is, people like your mother are putting a lot more physical and emotional effort into the job, so they’re more likely to get burned out and quit. The people who don’t care last longer, so they’re likely to outnumber the good people in the end.

  21. othium says:


    I appreciate the website tip- And thanks for the kind words! Even something as small as that makes me want to gut it out a bit longer in hopes of improvement.

    I have reported problems in the past under our state’s “Vulnerable Adult” statute. There is a 24 hour hotline available. Unfortunatley unless the consumer is in immediate danger, the investigation is delayed or doesn’t happen in most cases. There has to be quite a few reports before the Health/Human Services Department will follow up on it. The last time I reported a suspected incident of neglect, I was reprimanded and put on probation for not keeping the “chain of command” in the loop. Although I requested my name to be kept out of the report, the letter that was sent to acknowledge my call was sent to my workplace and the supervisor found out. I did call and talk to HHS to ask if this was allowed (Being punished for reporting in good faith) and they said I would have to take care of it on my own by hiring a lawyer. I’m not a real litigious person and I had not suffered any monetary loss from the probation and reprimand, so I elected to just get over it and continue serving my consumers. It has had a chilling effect on me (and my co-workers) when we run into another situation where we may have to make a report again.

    I just returned from my meeting at work and the only staff that bothered to show up were the ones that consistantly perform the best. It is especially galling to sit through a couple hours and listen to the management complain about tasks not being performed and documentation being not in order. (Those at the meeting had flawless paperwork and it didn’t apply to them.) When I objected to this as a waste of time since we were not the subject of the harangue, I was told to sit quietly and stop disrupting the flow of the meeting.


    That’s what I did the rest of the time. Hopefully some improvements happen soon….

  22. othium says:


    I agree 100% with that. In my experience it is true.

  23. gibbersome says:

    This is part of the reason why I’d rather have my grandma living with me than in a nursing home hours away.

    My mother stays with me while I’m in medical school (just started). She routinely travels and visits all her kids as much as she can. Since we’re all in the medical professions, we think we can provide her with the best care when she requires it. Of course, this is not possible with alot of people and keeping an aging loved one with you is sometimes not feasible.

  24. victorialynn1954 says:

    My mother is 85 years old. She is still a very beautiful woman. She applies her makeup everyday and dresses stylishly. She wears a wig so her hair will look nice all the time. She’s about 5′ tall and weighs about 150lbs. A few years ago she started getting dimentia. My sister thinks it’s Alzheimers but I’m not ready to make that statement yet. I just left from visiting her from a nursing home in Columbia, Missouri about 2 hours ago. When I got there the female residents were getting their nails painted. After that Mom and I went down to the “TV room” where a big screen TV is. While listening to Tim McGraw we played dominoes. I am glad we found such a nice place for Mom to live out the rest of her life. It is a wonderful place and the nurses, for the most part, are very nice and attentive. Are they perfect? NO! Do they make mistakes? YES! But if she was living with me or my sister we would make mistakes, too. And on top of that she would be miserable for lack of attention while we were at work. Where my mom stays the male and female nurses fawn over the residents and make them feel loved and cared for. We don’t have an unlimited flow of money. In fact, I would fit into the lower middle-class category probably. Luckily my sister did alot of investigating into what was available to Mom through Medicare. We were able to get Mom qualified for Medicaid, too. She has only a small amount of money saved. My dad’s pension pays the home every month and Medicaid/Medicare kicks in the rest. They have activities there, including entertainment from all around the area. If you take your time, get started early before they are unable take care of themselves, and do some investigating into the nursing homes in your area, then you should be able to find a very suitable place for your loved one to live. Don’t expect perfection but do expect the needs of your family member to be met. Good Luck!