Low-Quality Nursing Homes Were More Likely Than Other Nursing Homes To Be Bought Or Sold By Chains In 1993–2010

Two defining features of the nursing home industry are the tremendous churn in chain ownership and the perception of low-quality care at many facilities. We examined whether nursing homes that underwent chain-related transactions, such as mergers and acquisitions, experienced a larger number of health deficiency citations than nursing homes that maintained common ownership over the same period. Using facility-level data for the period 1993-2010, we found that those nursing homes that underwent chain-related transactions had more deficiency citations in the years preceding and following a transaction than those nursing homes that maintained common ownership. Thus, we did not find that these transactions led to a decline in quality. Instead, we found that chains targeted nursing homes that were already having quality problems and that these problems persisted after the transaction. Given the high frequency of nursing home chain transactions, policy makers will need to continue to invest in tracking, reporting, and overseeing these transactions. One important step would be to report more detailed data on chain ownership, transactions, and aggregate chain quality on the Nursing Home Compare website, the federal government's online report card for nursing homes.