Christine Spolar reports for Kaiser Health News on the private equity takeover of long-term care in Britain and its toll on elder care. In short, private equity is doing to British long-term care facilities exactly what has been done in the US to nursing homes: Stint on care, sell off real estate, and burden care facilities with high rent. Four Seasons Health Care, a long-term care company in Britain, with 500 sites and 20,000 residents is now likely going into bankruptcy.
After helping its private equity investors profit enormously through complicated financing arrangements, Four Seasons has now sold off many of its properties. Private equity is never in it for the long haul. This story is simply another version of the story we keep hearing about private equity in health care.
Four Seasons was ultimately unable to saddle long-term care residents or the British government with high costs. Four Seasons sold off the facilities’ real estate and then put the long-term care facilities in significant debt and forced them to pay high rent and interest payments to lease their properties.
Private equity is not generally focused on the quality of care delivered. One study found that quality suffered at these British long-term care facilities after private equity invested in them. Private equity tried to cut staff or hire less qualified staff at lower cost in order to maximize profits. Consequently, residents were left at times with inadequate care or attention to their needs. “Residents sometimes went without the appropriate care, timely medication or sufficient sanitary supplies.”
The long-term care homes in Britain are not part of the National Health Service. They get some government support but that support has dwindled. Private equity now owns three of the five largest providers of long-term care services in Britain. And, the government does not do a good job of overseeing private equity firms.
To complicate matters, the private equity firms’ books are designed to be difficult to understand. The local governments do not have the skills or the resources to undertake the oversight that is needed.
The four decades beginning in 1980 saw a massive shift away from local governments in Britain operating nursing homes and long-term care facilities to for-profit and not-for-profit organizations. By 2018, local authorities provided 88 percent fewer beds, 17,100, down from 141,719.
The British government has been unable to put decent financial reporting rules in place for companies owning long-term care facilities. Consequently, it’s hard for anyone to decipher these companies’ books and hold them accountable for bad acts. Even Conservative Party members in England have expressed concern about private equity “taking advantage of some of the most vulnerable people in our society without oversight, without controls.”
Here’s more from Just Care:
- Private equity-owned hospice and home health agencies drive up Medicare spending, jeopardize quality of care
- Patient safety at risk in private-equity controlled emergency rooms
- Our nursing home crisis is only worsening; who cares?
- Medicare “Direct Contracting” experiment could mean total privatization of Medicare
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