Owner Incentives and Performance in Healthcare: Private Equity Investment in Nursing Homes

Atul Gupta, Sabrina T Howell, Constantine Yannelis and Abhinav Gupta

The Review of Financial Studies, 2024, vol. 37, issue 4, 1029-1077

Abstract: Amid an aging population and a growing role for private equity (PE) in the care of older adults, this paper studies how PE ownership affects U.S. nursing homes using patient-level Medicare data. We show that PE ownership leads to a patient cohort with lower health risk. However, after instrumenting for the patient-nursing home match, we find that PE ownership increases mortality by 11%. Declines in measures of patient well-being, nurse staffing, and compliance with care standards help to explain the mortality effect. Overall, we conclude that PE has nuanced effects with adverse outcomes for a subset of patients.

Keywords: G14; G23; G28; I11 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Working Paper: Owner Incentives and Performance in Healthcare: Private Equity Investment in Nursing Homes (2021)
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