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White House Rolls Out Nursing Home Reform Plan, Targets Private Equity Investment

Members of the West Virginia National Guard and others enter a nursing home in Charleston, West Virginia, to test residents and staff for the coronavirus after a Covid-19 case was reported there in early April 2020.

The White House has rolled out a plan for regulatory reforms in the nursing home industry that will set minimum staffing requirements and target "bad actors," especially private equity investors whose standard of care is judged to be lacking.

Private equity investors now own about 5% of all nursing homes, according to the Center for Economic and Policy Research data, as reported by Skilled Nursing News. Various studies have linked private equity ownership of nursing homes to higher costs, especially for Medicare, and worse outcomes for residents.

“Too often, the private equity model has put profits before people — a particularly dangerous model when it comes to the health and safety of vulnerable seniors and people with disabilities,” the White House noted in a fact sheet about the plan on Monday.

President Joe Biden briefly reiterated that theme during his State of the Union speech on Tuesday.

"As Wall Street firms take over more nursing homes, quality in those homes has gone down and costs have gone up," the president said. "That ends on my watch. Medicare is going to set higher standards for nursing homes and make sure your loved ones get the care they deserve and expect."  

Besides reducing nursing home crowding by promoting single-occupancy rooms, the reforms will aim to limit unnecessary treatments and medications, including antipsychotics, according to the administration.

The U.S. Department of Health and Human Services has been tasked with developing and implementing new regulations. The agency will start with a study to determine adequate staffing minimums, which will be proposed a year after the study's completion.

More than 1.4 million Americans currently live in about 15,500 nursing homes nationwide. The sector was particularly hard hit by the coronavirus pandemic, with the administration estimating about 200,000 nursing home residents and staff members died of Covid-19, nearly a fifth of the total nursing home population.