While all of healthcare suffered during the Covid-19 pandemic, nursing homes were hit particularly hard.
At the start of the pandemic, nearly half of all Covid deaths were people living or working in long-term care facilities, according to data from KFF. By early 2022, more than 200,000 people had died from the virus, making up roughly 23% of all Covid-related deaths in the US, KFF found.
Part of this can be attributed to the fact that nursing home residents tend to be at higher risk for contracting viruses due to their age, and living close together means it’s easier for illness to spread.
But some of the blame may lie in the fact that nursing homes are chronically short-staffed and run on extremely thin margins—often 3% or less in 2020, according to a survey from the American Health Care Association and National Center for Assisted Living (AHCA/NCAL), a trade group that represents long-term care facilities.
And the fact that private equity (PE) firms are increasingly buying up nursing homes is making those troubles worse, some experts argue.
PE firms own somewhere between 5% to 13% of nursing homes in the US as of 2025, though a lack of transparency into ownership structures makes it virtually impossible to know the exact number, according to an April 2025 report from the nonprofit Private Equity Stakeholder Project (PESP).
An October 2020 study from Weill Cornell Medical College in New York estimated that about 4.7% of nursing homes—or 543 of 11,470 in the study—were PE-owned during part of that year.
“Private equity firms are able to engineer financial returns for themselves from the nursing homes that they own by using a playbook of legal but dubious tactics that can include high debt levels, the sale of real estate assets, and cost-cutting measures that can put workers and residents at risk,” Michael Fenne, a senior research and campaign coordinator at PESP who coauthored the firm’s report, told Healthcare Brew.
Quality concerns
PE ownership can lead to worse care quality at nursing homes as well as other types of healthcare facilities like hospitals and physician offices, several studies have found.
A working paper distributed by the National Bureau of Economic Research states that after a PE firm buys a nursing home, the facility sees an average 1.4% reduction in staffing and 3% decrease in paid hours. Mortality rates also increase by 11%, the researchers said in the paper.
And a 2021 study from Weill Cornell found people living in a PE-owned nursing home were 11.1% more likely to have an emergency room trip and 8.7% more likely to be hospitalized for a “largely” preventable cause.
“Private equity ownership can leave nursing homes with less financial flexibility to respond to emerging care needs or changing conditions on the ground,” Fenne said. “It can also leave nursing homes with fewer resources to pay wages, acquire protective equipment, or spend on other supplies and resources.”
But PE ownership may also have some upsides, such as “operational improvements and capital infusion,” researchers wrote in a July 2025 study published in journal Health Policy.
PE ownership and Covid outcomes
With such stark concerns over the quality of care received at PE-owned nursing homes, the connection between the numerous Covid deaths that occurred in these facilities and their ownership structure may seem obvious.
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For example, at the height of the pandemic, a PE firm called the Portopiccolo Group came under scrutiny for buying more than 20 nursing homes, which employees said worsened patient care.
However, the available data on whether PE ownership directly worsened outcomes during the pandemic shows no direct correlation.
An October 2020 study from Weill Cornell that looked at nursing homes on a national scale found PE ownership had “no statistically significant” impact on staffing levels, number of Covid cases, or deaths.
The study, however, did find that PE-owned nursing homes tended to have less personal protective equipment (PPE) on hand than other facilities. Widespread PPE shortages plagued many medical facilities during the early days of the pandemic.
John Collins, a spokesperson for Portopiccolo, told the Washington Post in 2020 that the quality of care residents received at the firm’s nursing homes did not decline during the pandemic.
“Our company was founded by people who share a passion for caring for the sick, elderly, and forgotten. Any attempts to characterize our work or the work of our teams differently is flat out wrong,” he said.
Rachel Reeves, a spokesperson for AHCA/NCAL, told Healthcare Brew that “focusing on private equity in long-term care has become a distraction from the real issues that impact the majority of providers, like chronic Medicaid underfunding and a growing caregiver shortage.”
“The reality is that owners of long-term care facilities are extremely diverse and are often run by small, independent operators,” Reeves said.
Looking ahead
Given the potential risk posed by PE ownership, Mark Unruh, associate professor of population health sciences at Weill Cornell who coauthored the university’s 2020 and 2021 studies, told Healthcare Brew there “absolutely” should be more oversight and regulation of nursing home deals.
Two prominent PE-owned nursing home companies in PESP’s report (LaVie Care Centers, which operated under names including Consulate Health Care, and Gulf Coast Health Care) as well as a PE firm that specialized in long-term care centers (Goldner Capital Management) have all filed for bankruptcy in recent years.
The Centers for Medicare and Medicaid Services (CMS) announced a rule in 2023, Unruh noted, that would require more transparency in reporting the ownership structure for nursing homes.
“It’s a wonderful first step, but the problem with that rule is there’s no teeth to it,” Unruh said. “There’s no enforcement mechanism to ensure that the owners were actually reporting the information as they should.”
So, the logical next step would be for CMS to add an auditing process and implement consequences if nursing homes don’t report the required information, according to Unruh.
“I think that private equity has an incentive to keep acquiring nursing homes and keep making financial returns for themselves using the same set of tactics until something is changed in the policy landscape,” Fenne said.
This is one of the stories of our Quarter Century Project, which highlights the various ways industry has changed over the last 25 years. Check back each month for new pieces in this series and explore our timeline featuring the ongoing series.
