Biden administration cracks down on private equity in nursing homes

Nursing home trade unions and residents have successfully mobilized to demand the Biden administration use its broad rule-making authority to regulate private equity.  These new rules will crack down on the large corporate landlords that have started buying nursing homes.  The rules will require unprecedented transparency of nursing home ownership and also increase staffing levels.

Unfortunately, the Supreme Court is being asked by the far-right to destroy the government’s flexible rule-making power. If the far-right prevails in their bid, the result may make the government even more rigid and less responsive to mass action.

Healthcare in nursing homes requires beds and caregivers. The chronic lack of beds and the standing war on healthcare workers is the result of profit-driven healthcare. In recent years, nursing homes have been targeted by waves of aggressive profit seeking.  Profiteering oppresses nursing home workers and harms elderly and disabled residents.

Traditionally, nursing homes have been run by either small companies, or by non-profits, or the government as a public service. Profit seeking in this area used to be the exception. But, aggressive profit seekers are buying nursing homes at alarming rates. As they do so, quality of care is declining and already difficult working conditions are becoming unbearable.

Residents of nursing homes, already some of the most vulnerable members of our society, are not having their needs met in facilities purchased by private equity firms.  Horrifically, these firms quietly extract great public wealth from our Medicaid and Medicare programs by requiring workers to cut corners meant to safeguard residents.

For example, one recent study relied on by the federal government found that when private equity firms acquired nursing homes, the rates of premature resident death increased by 10% and the rates of pacifying drug treatments increased by 50%, while the actual number of workers providing hands-on care fell and the cost of care increased.

In another recent study, it was revealed that nursing homes acquired by private equity firms experience increased levels of mistreatment and neglect among residents.

Turning residents into commodities

In other words, as a matter of policy, private equity firms have sought to turn residents with diverse human needs requiring equally diverse levels of hands-on care into immobilized commodities tied quietly to assembly lines. This is being done to increase rates of profit.

The increased level of mistreatment is a result of profit seekers, as a matter of policy, requiring their workers to give less hands-on levels of care. Profit seekers impose these harmful policies on workers and residents in order to collect the highest rates of profit possible.

In response to these troubling trends, unions and residents have mobilized to demand human dignity in healthcare. Today’s organizing builds off the material gains acquired over previous decades of mass struggle: The Social Security Act of 1935, the Older Americans Act of 1965, the Nursing Home Reform Act of 1987, and the Affordable Care Act of 2010.

Using these laws, the first demand is for the federal government to increase the minimum levels of hands-on care per resident, dignified staffing levels, and living wages. In response to this demand, the large institutional profit seekers cry poverty and hide behind the propaganda that “mom and pop” nursing homes (long since crushed by corporate healthcare) cannot bear the burden of providing the care they agreed to provide as a condition of receiving Medicaid and Medicare funds.

To combat this lie, the second demand is for increased levels of transparency in nursing home ownership so the public can finally see exactly where their money is going. Profit seekers are making incredible profits, but they conceal these profits from the public by deploying shady legal tricks to hide profits from the public through layers and layers of hidden shell companies and undisclosed agreements.

This November, the federal government imposed transparency requirements that would, for the first time, require private equity firms and real estate investment trusts to publicly disclose the identities of companies and individuals in their web of profit. In addition, the federal government will soon increase levels of hands-on care.

These rules are the result of boots-on-the-ground pressure from trade unions, resident councils, and other mass organizations.

Just as the struggle for human dignity for workers and residents in nursing homes is inextricably tied to the struggle for housing as a human right, the struggle is also linked to other issues such as environmental protection. The federal government’s ability to respond to collective action is reflected in its adoption and amendment of federal regulations.

The federal government’s ability to implement environment-protecting regulations is being challenged before the Supreme Court in January 2024. In two cases brought by the fishing industry (Relentless, Inc. v. Department of Commerce and Loper Bright Enterprises v. Raimondo), large corporate interests are calling into question whether federal agencies can issue progressive regulations if Congress was silent on a specific issue when crafting the law decades earlier. These corporate interests want federal agencies to respond narrowly to the interests of mass struggle, overturn over 40 years of policy, and defer to an increasingly bogged-down and dysfunctional Congress, held hostage by an emboldened clique of far-right representatives.

If corporations can use the Supreme Court to cut off the federal government’s ability to respond to mass struggle, the ability of the federal government to respond to the needs of the people will be increasingly hampered. And, if the federal government becomes rigid and if every decision must be approved by Congress, the result will be a crisis.

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C.D. Carlson
C.D. Carlson

C.D. Carlson writes from Connecticut.