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Mark A. Stein: With Medicare ratings in doubt, how to evaluate nursing homes

Mark A. Stein, on

Published in Home and Consumer News

The ProPublica site also has some state-by-state data and enables you to zero in on individual facilities, where you can learn how many patients each nursing home cares for, how many have been infected with COVID, and the number and severity of violations that inspectors have found. It also links to inspection reports describing each deficiency, so you can see how serious it was and whether the same problem occurs often at the same location.

This is tedious work, but reading inspection reports and then asking very direct questions about them of a nursing home should help brush aside the sales pitch and focus the discussion on actual conditions.

Medicare Compare, the government site, still has some value if you ignore ratings components that rely on self-reporting by nursing home operators: quality of care and staffing, which the New York Times found were too often gamed. The site catalogs information that is not reported by nursing home operators, including fire code violations and federal fines they have had to pay for health and safety violations.

Ownership of the nursing home matters

Medicare identifies the legal owner of each facility and whether it is a for-profit or not-for-profit business. If the owner is a for-profit enterprise, it is likely to be a limited-liability company with a name like AL 6 Holdings LLC. The name may be inscrutable, but it offers useful information: It suggests the owner could be a private equity firm.

Those firms, which pool money from investors to buy businesses they think might have needlessly high costs or poor managers, have increased their investments in nursing homes and other medical providers from less than $5 billion in 2000 to $100 billion in 2018, according to economists at the Center for Economic and Policy Research and Cornell University.

The trend has not been all good for patients, according to a recent National Bureau of Economic Research (NBER) paper. Since private equity firms often borrow money to increase profits, they can shift cash flow toward debt payments and away from patient care when they take over a nursing home.

“We find that going to a (private equity)-owned facility increases 90-day mortality by about 10% for short-stay Medicare patients, while taxpayer spending over the 90 days increases by 11%,” the Cornell University report states.


“Furthermore, we document declines in nurse availability per patient and in measures of compliance with Medicare’s standards of care. We also find a corresponding increase in operating costs that tend to drive profits for (private equity) funds.”

Other nursing home findings

Private researchers and government auditors alike have documented that nursing homes widely underreport the extent of bed sores, falls, weight loss and even physical abuse among patients in their care. Researchers at the University of Chicago, for example, identified 150,000 major falls involving nursing home patients from January 2011 through September 2015, but their journal article says that more than 64,000 of them were never disclosed to the authorities.

Not all nursing homes are the same, of course. Another paper from the NBER did find a helpful correlation between Medicare Compare ratings and patient recovery. Hospital patients who are discharged to nursing homes with high Medicare Compare ratings experience “significantly lower mortality, fewer days in the nursing home, fewer hospital readmissions, and more days at home or with home healthcare,” the NBER paper concluded.

The problem, of course, is weeding out the facilities that gamed the reporting system to get a high Medicare rating. That’s where you come in.

Portia Y. Cornell, the lead author of the NBER paper and an investigator in the Department of Health Services, Policy and Practice at Brown University, stressed the importance of personally vetting nursing homes. It is the only way to observe how staff treats patients, how well patients are dressed and groomed.

“Smells, cleanliness, a stimulating environment — there are some things you cannot get from the internet,” she said.

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