Nursing homes are big business, and some private Wall Street investment firms have taken notice. In recent years, large groups have been gobbling up nursing homes, which they use to rake in millions of dollars in profits. But often, those profits come at a devastating price to nursing home residents, who must bear the brunt of an investment firm’s cost-cutting efforts.
According to a report published in Monday’s New York Times, private equity firms like the Carlyle Group and Warburg Pincus, have been buying nursing homes by the hundreds. Once they have acquired a home, these private companies often employ aggressive cost cutting measures to increase profits. Often, this means reducing nursing staff, and cutting budgets for supplies, activities and even meals. As a result, an environment is created that is ripe for nursing home neglect.

