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Report Points to Public-Private Partnerships to Support Much Needed Reform in Nursing Home Industry

Study reflects on how past policy decisions created the nursing home landscape today, and promotes opportunities to improve patient and resident experiences

WASHINGTON, June 16, 2022 /PRNewswire/ -- New analysis from ATI Advisory (ATI) commissioned by the National Investment Center for Seniors Housing & Care (NIC) evaluates the emergence and characteristics of private capital within the nursing home industry and shows that the role these capital providers play – one which is increasingly divisive – is a result of a long history of unpredictable reimbursement and flawed financial incentives across Medicare and Medicaid, the primary sources of nursing home revenue. The report urges policymakers to consider adapting reimbursement and regulatory measures so that they are more informed by investor incentives and promote investments that directly benefit a nursing home operator's population. These long-term initiatives include operational innovations, better building design, and importantly, enhanced workforce compensation that will attract and retain the dedicated and well-trained staff required to help patients and residents live and die with dignity.  

(PRNewsfoto/ATI Advisory)

This report, "Access to Capital in the Nursing Home Industry: A Resource on the Role of Policy and Implications for the Future" comes at a time when the White House, the Centers for Medicare and Medicaid Services (CMS) and state Medicaid programs are all grappling with how to increase transparency around nursing home ownership and investment, direct topline revenue from public programs directly to workforce compensation, and increase ratios of staff to patients/residents. The report provides policymakers and staff with an in depth look at nursing home capital, including the roles of the Department of Housing and Urban Development, private equity, and Real Estate Investment Trusts (REITs) in funding this country's nursing home infrastructure, and how the capital market has evolved as a direct result of federal and state reimbursement policy decisions over a long period of time.

The COVID-19 pandemic further reminded policymakers of the weaknesses in the United States' long-term care system: workforce challenges, financing mechanisms, and dependence on nursing homes as the primary infrastructure for long-term care. Nursing homes are the only guaranteed site of care for Medicaid beneficiaries who need long-term services and supports, but unfortunately the last 30+ years of public policy have failed to deliver an environment that fully meets the needs of its residents.

ATI's work highlights how reimbursement policy has impacted nursing home funding using private capital. A challenging – and, in some ways, exclusionary to nursing home operators –value-based reimbursement environment, a primarily Medicaid-funded population cross-subsidized by significantly higher reimbursement from post-acute Medicare fee-for-service patients, along with growth in lower-reimbursed Medicare Advantage volume, have reduced the commitment of federal and state governments to cover nursing home costs. The responsibility to fund operators has increasingly fallen to private capital providers, who, when confronted with an unpredictable reimbursement environment, have allocated resources toward improving an operator's financial profile in ways that are not accruing to patients and residents. The repercussions of policymaking and resulting nursing home financing choices are visible through unsatisfactory quality and outcomes in the industry today.

"This work will aid policymakers in understanding how the nation arrived at this point of targeting private capital providers, who could significantly help deliver on the innovation that policymakers and consumers are advocating," noted Conner Esworthy, Advisor at ATI Advisory and research lead. "Increased transparency and accountability mandates are a critical component for private investors who want to participate in this industry. Policymakers may also want to consider how to offset increased regulation to attract the type of capital that will drive long-term change and ensure operators have access to private capital at sustainable rates."  

"Public-private partnerships are failing, creating a skilled nursing industry with well-documented challenges that need to be addressed," said Brian Jurutka, NIC's President and CEO. "Solutions should address the root cause of the problem: encouraging private capital investments to modernize buildings, improve operations and, most importantly, innovate to enhance resident care and quality of life." See the full report here.

About ATI Advisory

ATI Advisory is an advisory services and research consulting firm focused on transforming the healthcare delivery and financing systems for frail, older adults. ATI Advisory applies quantitative and qualitive research methods to identify opportunities to improve Medicare, Medicaid, and long-term care, and it stands by research and data as the foundation of quality. Learn more about ATI Advisory's work here and follow us on LinkedIn and Twitter.

About The National Investment Center for Seniors Housing and Care

This work was published with support from the National Investment Center for Seniors Housing & Care (NIC), a 501(c)(3) organization that works to enable access and choice by providing data, analytics, and connections that bring together investors and providers. NIC delivers the most trusted, objective, and timely insights and implications derived from its analytics, which benefit from NIC's affiliation with NIC MAP® Vision, the leading provider of comprehensive market data for senior housing and skilled nursing properties. NIC events, which include the industry's premier conferences, provide sector stakeholders with opportunities to convene, network, and drive thought-leadership through high-quality educational programming. To learn more, please visit

ATI Advisory Media Contact:
Robert Shalett

NIC Media Contact:
Sarah Schmidt

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