Private Equity
in Nursing Homes
An estimated 10% of nursing home beds nationally are owned or operated by private equity-linked entities. Peer-reviewed research links PE acquisition to higher short-term mortality, more antipsychotic use, and fewer RN hours — while ownership is deliberately obscured through layered LLC structures.
after PE acquisition
vs. other for-profits
(>12% of beds estimated PE-owned)
Context
What PE ownership actually means operationally
Private equity firms acquire nursing homes through leveraged buyouts, typically using 60–80% debt. The acquisition cost sits on the acquired company's balance sheet — meaning the facility operators are servicing debt that financed their own purchase. This creates structural pressure to cut costs and maximize revenue from the start of ownership.
The PE playbook in long-term care usually involves several simultaneous moves: separating real estate from operations (OpCo/PropCo), selling the buildings to a REIT, extracting a one-time lump sum, and then paying ongoing rent to that REIT. Management fees to affiliated entities reduce taxable income while moving cash to the PE owner. The holding period is typically 3–7 years, ending in a sale, IPO, or — in many documented cases — bankruptcy.
The residents inside these facilities don't choose their owner. Most are Medicaid beneficiaries with limited options. Their daily care is directly affected by how much money is left for staffing after debt service, rent escalation, and management fees.
National Map
PE Ownership by State
Estimated share of nursing home beds under private equity-linked ownership, by state. Based on PESP Nursing Home Tracker, HHS ASPE (2024), and published research. Three-band color scale: green (<6%), yellow (6–12%), red (>12%). All estimates carry ±3–5 pp uncertainty.
Estimates based on PESP Nursing Home Tracker, HHS ASPE (2024), and published research. "PE-linked" includes both confirmed and suspected private equity-affiliated operators. ±3–5 pp uncertainty. See methodology below.
Major Operators
Named PE-Linked Operators
These are the best-documented PE-linked nursing home operators, drawn from PESP database, SEC filings, bankruptcy proceedings, and peer-reviewed research. Several are no longer operating in their original form — the history of how they ended matters as much as how they operated.
HCR ManorCare
Carlyle acquired for $6.3B in one of the largest LBO transactions in nursing home history. Simultaneously sold ~330 buildings to HCP REIT (now Healthpeak) in a sale-leaseback generating ~$4.3B. Filed Ch. 11 in 2018 after years of rent escalation.
SavaSeniorCare
Spinoff from Mariner Health Care post-Warburg Pincus sale. Operated largely in Southeast and Midwest. Faced DOJ whistleblower settlements related to therapy billing. Filed bankruptcy 2021.
Formation Capital / ARC Health Care
Atlanta-based PE assembled large Southeast portfolio including ARC Health Care. Partnered with Fillmore Capital on some transactions. Known for complex layered ownership structures across GA, SC, NC, AL, MS.
Fundamental Long Term Care
Largest PE-owned nursing home chain in Texas at peak. Used aggressive OpCo/PropCo structure separating real estate from operations. Subsidiary Trans Health Management was dissolved; multiple facilities transferred mid-litigation.
Portopiccolo Group
NJ-based acquirer active in NY/NJ metro. Uses LLC layering typical of PE-structured deals. PESP tracks as PE-affiliated. Facilities primarily in NJ, NY.
Avalon Health Care Group
Western US operator backed by ARES Management. Active in UT, WA, OR, CA, HI. Considered one of the better-performing PE-affiliated chains by CMS Star ratings.
Senior Care Centers
Texas-concentrated operator that declared bankruptcy in 2018 abruptly. Left ~9,000 residents in limbo as courts supervised emergency transfers. Cited as an example of PE-driven operational fragility.
This list covers the largest and best-documented cases. Many smaller PE-affiliated chains operate under names that don't signal their ownership structure. The Portopiccolo Group, Pinta Capital Partners, and Onex Corporation are among others tracked by PESP. Not exhaustive.
Chart — Outcome Deltas
PE vs. Non-PE: What the Research Shows
Two independent peer-reviewed studies — Gupta et al. (2021) using 2000–2017 Medicare data, and Braun et al. (2022) using 2013–2019 CMS data — reach consistent conclusions. The deltas below reflect PE-owned facilities relative to otherwise similar non-PE for-profit facilities.
Sources: Gupta, Howell, Yannelis & Gupta, "Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes," NBER Working Paper 28474 (2021). Braun et al., "Private Equity Investment in US Nursing Homes and the Quality and Cost of Care," JAMA Health Forum (2022).
Source: HHS ASPE, "Trends in Ownership Structures of U.S. Nursing Homes (2013–2022)," 2024.
These are population averages
Every statistic above describes averages across hundreds or thousands of facilities. Individual PE-owned facilities exist across the full quality spectrum. Ownership structure is a risk signal, not a verdict on any specific nursing home. When evaluating a facility, check the RN staffing hours, CMS Star rating, and recent inspection results on its individual page.
Financial Mechanics
How PE Extracts Value from Nursing Homes
The Leveraged Buyout
A PE firm acquires a nursing home chain using 60–80% borrowed money. That debt is placed on the acquired company's balance sheet — not the PE firm's. From day one, resident care revenue is partly diverted to service acquisition debt the facility's managers didn't choose and residents never agreed to.
OpCo/PropCo Split
After acquisition, the real estate (buildings, land) is separated from operations into a "PropCo" entity. The operating company ("OpCo") then leases the buildings back from PropCo at market or above-market rates. If PropCo is sold to a REIT, the PE firm pockets a large one-time payment. The OpCo is now locked into long-term leases with annual escalators — often 3–4% — regardless of Medicaid reimbursement trends.
REIT Sale-Leaseback
PropCo is sold to a healthcare REIT (e.g., Welltower, Omega Healthcare, Sabra, Healthpeak), generating immediate cash for the PE firm. The REIT becomes a silent but consequential landlord — their financial interest is rent collection, not care quality. The Carlyle/ManorCare transaction illustrates this at scale: Carlyle sold buildings to HCP REIT for ~$4.3B in 2011, while ManorCare's lease obligations contributed to its 2018 bankruptcy.
Related-Party Management Fees
PE-owned chains frequently contract management, therapy, staffing, and ancillary services from affiliated entities — which charge above-market rates. These "related-party transactions" shift profit from the operating entity (which must meet Medicaid cost standards) to affiliated companies that face no such constraints. CMS requires disclosure on the cost report, but auditing is limited.
Dividend Recapitalization
Before exit, PE firms often issue additional debt on the portfolio to fund a special dividend to themselves ("dividend recap"). This leaves the operating company more indebted than when acquired, with less capacity to invest in staffing or capital improvements, while the PE firm has already extracted returns.
Medicaid Arbitrage
Nursing homes are uniquely Medicaid-dependent: most residents exhaust savings and transition to Medicaid within months. PE firms optimize for the gap between state Medicaid rates (which fund care) and operating costs (which can be minimized through staffing cuts). CNA wages — the largest controllable cost — are frequently suppressed. Gupta et al. (2021) document that CNA wage growth stagnates relative to peers post-PE-acquisition.
Sources: Gupta et al. NBER w28474 (2021); Bos & Harrington, "Private Equity in Nursing Homes" (2021); Roosevelt Institute, "The Financialization of Nursing Homes" (2021); GAO-23-106163 (2023).
The Transparency Problem
PE Ownership Is Deliberately Hard to See
Layered LLC Structures
A typical PE-owned nursing home is operated by an LLC formed specifically for that facility. That LLC is owned by a holding company, which is owned by an intermediate holding company, which is owned by the PE fund (or a fund-of-funds structure). CMS requires disclosure of ownership on the CHOW (change of ownership) form and the 855A enrollment form — but only the top 5% owners of each entity must be disclosed. A PE fund can often stay below this threshold at each layer while retaining effective control.
The GAO examined this structure in a 2023 report and found that CMS data "does not capture all ownership relationships and may not reflect a facility's actual controlling interests."
GAO-23-106163: Nursing Home Ownership Transparency (2023)CMS 2024 Ownership Transparency Rule
Partial fixIn April 2024, CMS finalized a rule requiring nursing homes to disclose additional ownership information, including the identity of private equity companies and real estate investment trusts with ownership interests. The rule expands what must be reported on the CMS-855A form and creates a new public ownership database.
What the rule still doesn't fully solve: intermediate holding company chains of more than 3–4 layers, fund-level LP structures where no single LP holds 5%+, and management control exercised without equity ownership. The rule is a significant improvement over pre-2024 disclosure standards, but entity resolution for complex PE structures remains a research challenge.
CMS: Nursing Home Ownership Transparency Final Rule (2024)For Researchers
Data Access & Reproducibility
Placet publishes its PE state-level snapshot as open data. Researchers, journalists, and advocates are encouraged to use it with appropriate caveats.
Both endpoints return the same 51-row dataset (50 states + DC). No authentication required.
Source files: PESP Nursing Home Tracker (pestakeholder.org), CMS Provider Data Catalog (data.cms.gov), HHS ASPE reports (aspe.hhs.gov). State estimates were constructed by cross-referencing PESP facility-level PE attributions against CMS licensed bed counts, then summing to state level.
Date pulled: Primary reference period Q4 2024. PESP tracker data reflects ownership attributions as of mid-2024.
Match methodology:Facilities in PESP tracker matched to CMS provider IDs on facility name + address string match, with manual review of ambiguous cases. PE attribution follows PESP taxonomy: "confirmed PE" requires a primary source (SEC filing, bankruptcy proceeding, or academic citation); "suspected PE" relies on corporate structure analysis and trade press.
- —LLC layering: Many facilities with PE-adjacent ownership are not attributable to a specific fund without extensive entity resolution. Our estimates are conservative.
- —CMS O-0 form coverage: The CMS ownership disclosure form has historically captured only a subset of controlling relationships. Post-2024 rule compliance is still ramping.
- —Historical vs. current: PE ownership is dynamic. Chains that were PE-owned in 2015 may have exited; new acquisitions occur continuously. This snapshot reflects ~2024 conditions.
- —REIT overlap: REIT-owned facilities (where PE sold the real estate but not operations) are not counted as "PE-owned" in this dataset, though REIT landlord dynamics share some of the same structural pressures.
- —Small states: States with fewer than ~50 nursing homes have high estimation uncertainty. Treat low-count state estimates as especially directional.
- 1.Does the 2024 CMS Ownership Transparency Rule materially improve entity resolution for fund-level PE structures?
- 2.How do outcomes differ within PE portfolios — between chains using aggressive related-party fee structures vs. those that do not?
- 3.What is the measurable effect of REIT sale-leaseback (independent of PE operations) on staffing investment capacity?
- 4.Are the Gupta et al. mortality findings reproducible with post-2019 data, given pandemic confounders?
- 5.What share of the ~1,500 PE-linked facilities nationally were affected by the chain bankruptcies of 2018–2021, and what happened to residents?
Researcher, journalist, or policy analyst working on PE in long-term care? Contact us →
Methodology & Caveats
PE identification methodology: We identify PE-linked facilities using a combination of: (1) PESP Nursing Home Tracker, which cross-references SEC filings, PitchBook data, trade press, and NAIC databases; (2) academic studies (Gupta et al. 2021, Braun et al. 2022) that use PitchBook-matched facility-level PE ownership flags; (3) bankruptcy court filings that name PE ownership chains; and (4) CMS CHOW records and 855A enrollment data.
Confirmed vs. suspected:The state-level estimates blend "confirmed PE" (primary source available) and "suspected PE" (corporate structure analysis). We note the distinction in the data file's confidence field. The true national PE share is likely higher than our estimates, since entity resolution consistently under-counts rather than over-counts.
Important notice: All facility-level data on this site is sourced from CMS public datasets. State-level PE estimates are Placet analyses, not official CMS figures. This page does not constitute legal findings or allegations regarding specific facilities. CMS Five-Star ratings and inspection data reflect official government records and are available at data.cms.gov.
Citations
- 1.
Gupta A, Howell ST, Yannelis C, Gupta A. "Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes." NBER Working Paper 28474. 2021.
NBER w28474 - 2.
Braun RT, Jung H, Casalino LP, Myslinski Z, Unruh MA. "Private Equity Investment in US Nursing Homes and the Quality and Cost of Care." JAMA Health Forum. 2022;3(3):e220247.
JAMA Health Forum - 3.
HHS ASPE. "Trends in Ownership Structures of U.S. Nursing Homes (2013–2022)." 2024.
HHS ASPE PDF - 4.
GAO. "Nursing Home Ownership: CMS Should Ensure Consumers Have Needed Ownership Transparency." GAO-23-106163. 2023.
GAO-23-106163 - 5.
Private Equity Stakeholder Project (PESP). "Nursing Home Residents at Risk from Private Equity Investment." 2020 and updates.
PESP Reports - 6.
Bos JM, Harrington C. "Private Equity in the US Nursing Home Industry: Key Findings and Policy Recommendations." Journal of the American Medical Directors Association. 2021.
PubMed / JAMDA - 7.
Stevenson DG, Grabowski DC. "Private Equity Investment and Nursing Home Care: Is It a Big Deal?" Health Affairs. 2008;27(5):1399–1408.
Health Affairs - 8.
Chen MK, Chevalier JA, Long EF. "Nursing Home Staff Networks and COVID-19." NBER Working Paper 27608. 2020. (Updated analysis in Health Affairs 2024.)
NBER / Health Affairs - 9.
CMS. "Medicare and Medicaid Programs: Nursing Facility Ownership and Related Party Disclosure Requirements." Final Rule. 89 FR 40876. 2024.
CMS Rule 2024