Who Really Owns Your Nursing Home?

When we point fingers at these impossible productivity standards that are crushing our days, we usually aim our frustration at local clinical directors or hospital administrators. They certainly seem like the easiest ones to blame, right? But we may be pointing our fingers in the wrong direction. Because there is an invisible giant operating behind the scenes. 

When you picture the owner of a local nursing home or senior living facility, you probably imagine a non-profit hospital, a religious organization, or a small community group. That makes sense, right? That’s the way it should be, and that’s the way it was for a very long time. But, unfortunately, it is no longer the reality…

Today, huge corporate landlords known as Real Estate Investment Trusts, or REITs, have bought up a fifth of the nation’s senior housing and one out of every six nursing homes.

Now, these investment firms legally claim to just be the “property owners.” And of course, this is simply to avoid liability for poor patient care and protect their necks and tax breaks. But court documents have revealed that they often wield a huge amount of influence over daily operations and even over the care of patients and residents.

REITs frequently handpick management companies, mandate sky-high occupancy rates, and track facility budgets with granular precision—down to the exact dollar amount spent monthly on things like the nurses staffed and even the food eaten. Would you want a corporate landowner deciding what your mom or dad eats or how much his or her nurse gets paid? Nope, me either.

To really figure out what’s going on here, all you have to do is follow the money. And what you’ll find is that the profit margins look completely different at a typical hospital compared to a facility owned by one of these REITs. To understand the sheer scale of this profit disparity, imagine a $10 bill. For every $10 of revenue a major for-profit hospital chain makes, they keep $1 as profit. But for a huge corporate landlord called CareTrust, for every $10 they brought in, they kept almost $7 in profit.

The REIT is walking away with nearly two-thirds of the pie, just for owning the ground the facility sits on. 

How do these real estate investors achieve such sky-high returns?

By severely squeezing the facilities and those who work in the facilities. Research shows that after a nursing home is bought by a REIT, they frequently replace highly skilled registered nurses with less-skilled workers. In fact, one analysis found that nursing homes affiliated with one specific REIT management company provided an hour and a quarter less nursing care per resident per day than the national average.

An hour and a quarter less a day might not sound so bad at first glance. But watch how it adds up… Over a single month, that resident is robbed of nearly 40 hours of attention from skilled medical staff. That means the corporate REIT is effectively deleting one full-time employee’s entire work week of care for that resident, every single month.

This extreme financial squeezing isn't just causing clinician burnout; it is resulting in deadly patient neglect. The data and lawsuits emerging from these understaffed, REIT-owned facilities are heartbreaking. In California, a 100-year-old patient with dementia wandered out of an understaffed building that was missing exit door alarms. What happened to this poor woman? She froze to death in the middle of the night. Her name was Mildred. 

This resulted in a $110 million jury verdict against the corporate owners. But with all the profits they are raking in, this kind of money is pennies on the dollar and likely covered mostly by insurance. 

In another tragic case, a retired teacher died from severe infections and bedsores after reportedly being left sitting in her own waste time and time again. In the year she died, her nursing home ran a deficit while paying its REIT landlord over $1 million in rent. 

While clinicians are skipping their lunch breaks and working off the clock to squeeze in more than their allotted four minutes of “non-productive” work, the company that owns their building is pocketing two-thirds of the profit. They do none of the work, and for every $3 of value generated inside the facility, they walk away with $2 of pure profit. 

Next week is all about the human impact of increasing productivity. You’ll hear directly from clinicians on the front lines to see how it's impacting their work. Spoiler alert: It’s not good.