Pascrell Comments on Blockbuster Private Equity Nursing Home Report
GAO finds yawning transparency gaps in Wall Street ownership of senior homes
Washington, September 27, 2023
Tags: Health Care
Congressman Bill Pascrell, Jr. (D-NJ-09), the Ranking Member of the House Ways and Means Subcommittee on Oversight, commented on an important new report issued by the Government Accountability Office (GAO) identifying large transparency gaps in showing the growing ownership of nursing homes by private equity firms.
“The performance of many nursing homes during the pandemic laid bare the need to provide greater regulation and oversight of long-term care,” said Congressman Pascrell. “That begins with shining a bright light on the ownership of nursing homes by private equity firms. As this important report makes clear, there are still yawning gaps in identifying nursing homes controlled by Wall Street. Some private equity firms create Russian nesting dolls of paperwork to hide their ownership from Americans. The growth of Wall Street into our nursing homes is an alarming trend in public life. As a shark swims to find food, private equity exists to make massive profits at any cost – a goal completely at odds with protecting health. Congress must continue seeking ways to provide transparency in nursing home ownership and impose stricter regulation.”
Between 2008 and 2018, private equity deals in health care more than doubled. In 2008, the U.S. saw 325 private equity deals and in 2018, that number grew to 788 deals, representing more than $100 billion in total. In 2022, that figure rose to 863 transactions. Private equity firms choose to enter markets that are highly fragmented, like individual physician practices, to consolidate and scale for better negotiating power. But this negotiating power allows quality of care issues and the practice of surprise billing to proliferate.
In 2021 as Chairman of the Oversight panel, Pascrell convened a Ways and Means Oversight hearing which revealed a disturbing lack of transparency, declining standards of care, and horror stories from hospitals and nursing homes controlled by Wall Street.
Also in 2021, Pascrell authored a widely shared article on the dangers of Wall Street control over nursing homes and American health care generally. In the summer of that year, Pascrell asked the GAO to investigate Wall Street’s growing tentacles into American health care.