Background

Private equity (PE) investment in U.S. nursing homes has increased significantly over the past two decades. The emergence of this novel ownership model has prompted concerns regarding its effects on nursing home performance, especially quality.

Objective

This systematic review examined the impact of PE ownership on U.S. nursing homes, focusing on quality of care and financial performance. The review was conceptually informed by agency theory and the structure-process-outcome (SPO) framework.

Methods

Following PRISMA guidelines, a systematic search across five databases identified 12 studies published between 2000 and 2024. Eligible studies examined the effects of PE ownership on nursing home quality or financial performance. Data were extracted and synthesized across these two dimensions.

Results

Across studies, PE ownership was linked to higher number of deficiencies, increased hospitalization rates, and higher mortality, although some improvements in care processes were noted. Financial outcomes showed initial financial gains but long-term challenges, primarily due to high debt loads.

Conclusions

Findings suggest that PE strategies may prioritize short-term profitability, which may compromise quality of care in some instances. These findings highlight the need for financial transparency, and reimbursement models that incentivize long-term quality.