Owner Incentives and Performance in Healthcare: Private Equity Investment in Nursing Homes
Amid an aging population and a growing role for private equity (PE) in elder care, this paper studies how PE ownership affects U.S. nursing homes using patient-level Medicare data. We show that PE ownership leads to lower-risk patients and increases mortality. After instrumenting for the patient-nursing home match, we recover a local average treatment effect on mortality of 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.
Non-Technical Summaries
- Purchases of nursing homes by private equity firms are associated with higher patient mortality rates, fewer caregivers, higher...
Published Versions
Atul Gupta & Sabrina T Howell & Constantine Yannelis & Abhinav Gupta & Gregor Matvos, 2024. "Owner Incentives and Performance in Healthcare: Private Equity Investment in Nursing Homes," The Review of Financial Studies, vol 37(4), pages 1029-1077. citation courtesy of 
Related
More from NBER
In addition to working papers, the NBER disseminates affiliates’ latest findings through a range of free periodicals — the NBER Reporter, the NBER Digest, the Bulletin on Retirement and Disability, the Bulletin on Health, and the Bulletin on Entrepreneurship — as well as online conference reports, video lectures, and interviews.
