When Private Equity Takes Over a Nursing Home

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When St. Joseph’s Home for the Aged, a brown-brick nursing home in Richmond, Virginia, was put up for sale, in October, 2019, the waiting list for a room was three years long. “People were literally dying to get in there,” Debbie Davidson, the nursing home’s administrator, said. The owners, the Little Sisters of the Poor, were the reason. For a hundred and forty-seven years, the nuns had lived at St. Joseph’s with their residents, embodying a philosophy that defined their service: treat older people as family, in facilities that feel like a home.

St. Joseph’s itself was pristine. The grounds were concealed behind a thicket of tall oaks and flowering magnolias; residents strolled in manicured gardens, past wooden archways and leafy vines. Inside the bright, two-story building, the common areas were graceful and warm—a china cabinet here, an upright piano there. An aviary held chirping brown finches; an aquarium housed shimmering fish. The gift shop, created in 2005, to fund-raise for tsunami relief in the aftermath of the Indian Ocean earthquake, sold residents’ handmade aprons and dish towels. People gathered everywhere: in line for the home’s hair salon, over soup in the dining rooms, against handrails in the hallway, where the floors were polished to a shine. “Take a deep breath,” a resident, Ross Girardi, told me, during a visit in May of 2021. He reclined in a plush armchair. “Deeper! What don’t you smell? A nursing home.”

The home fostered unexpected relationships. Girardi, a former U.S. Army combat medic, first discovered St. Joseph’s as a volunteer, in the early nineteen-eighties; thirty years later, he and his wife, Rae, decided to grow old there. Jennifer Schoening, a floor technician, was unhoused before she started at St. Joseph’s. A social worker from the nursing home had approached her on a street corner in Richmond, where Schoening was panhandling, and told her that the Little Sisters had an opening. She began working in the pantry, serving meals and brewing fresh coffee, and found an apartment nearby. Ramon Davila, the home’s maintenance technician at the time, worked in a shop next door to Schoening’s supply room. The two got married on the terrace in front of St. Joseph’s last year. “It got to be that the building wasn’t just my safe spot,” Schoening said. “He was my safe spot.”

The Little Sisters of the Poor was founded by Jeanne Jugan, who, in the winter of 1839, took in an elderly widow off the streets of Brittany. Jugan is said to have carried the woman, who was blind and partially paralyzed, up her home’s narrow spiral staircase—and given up her own bed. (Jugan herself slept in the attic.) From this first act of care, the Little Sisters grew. Jugan took in two more women, then rented a room to house a dozen. A year later, she acquired a former convent to support forty elderly people. Charles Dickens, after visiting one of Jugan’s homes in Paris, described the experience in the English magazine Household Words. “The whole sentiment,” Dickens wrote, “is that of a very large and very amiable family.”

At the organization’s peak, in the nineteen-fifties, the Little Sisters of the Poor owned fifty-two nursing homes in the United States. Today it runs twenty-two. “In general, we like to have ten Little Sisters in each home,” Sister Mary John, a former assistant administrator at St. Joseph’s, said. But, since 1965, the number of Catholic sisters in the U.S. has dropped from roughly a hundred and eighty thousand to some thirty-nine thousand, according to the Center for Applied Research in the Apostolate. As a result, the Little Sisters have withdrawn from many of their nursing homes. Typically, the facilities have been sold to nonprofits. A large Catholic health-care system had expressed interest in buying St. Joseph’s, as had the Catholic Diocese of Richmond. “But the pandemic and the lockdowns of nursing homes made it difficult,” Sister Mary John said, of securing a buyer. In the spring of 2021, an offer materialized from the Portopiccolo Group, a private-equity firm based in Englewood Cliffs, New Jersey, which then had a portfolio of more than a hundred facilities across the East Coast. “They said they like to keep things the way they are,” Sister Mary John told me.

The deal was finalized by June. Portopiccolo’s management company, Accordius Health, was brought in to run the home’s day-to-day operations. Staffers recall that, at an early town hall, Kim Morrow, Accordius Health’s chief operating officer, repeatedly said the company wouldn’t institute significant changes. But many staff members felt a disconnect. Someone asked if the number of residents in each room would change. A staffer remembered Morrow saying, “That might change. We might double it.” (Morrow doesn’t recall saying so.) At another town hall, Celia Soper, Accordius Health’s regional operations director, told St. Joseph’s staff, “We see that you all work hard. But it’s time we start working smart.”

Nearly a quarter of the hundred-person staff had been with the home for more than fifteen years; the activities director was in her forty-fifth year. But the ownership change precipitated a mass exodus. Within two weeks, management laid out plans to significantly cut back nurse staffing. Some mornings, there were only two nursing aides working at the seventy-two-bed facility. A nurse at the home, who spoke on condition of anonymity for fear of retribution, told me, “It takes two people just to take some residents to the bathroom.” (When reached by e-mail, a Portopiccolo spokesperson said, “We never made any staffing cuts during the transition.”)

The home was renamed Karolwood Gardens, and the new management filed for a license to admit higher-needs residents, who can be billed at higher rates through Medicare. The aquarium on the second floor disappeared. So, too, did the aviary. Residents’ crafts were removed from the gift shop. No longer did the kitchen serve an eclectic variety of main dishes: turkey tetrazzini, salmon with lobster sauce, or Reuben sandwiches. Now residents were commonly given an option of ground beef. Some days, the kitchen was so short-staffed that the dining hall wasn’t set up, and residents took meals alone in their rooms.

The attentiveness of the nursing staff plummeted. Mary Cummings, a ninety-seven-year-old resident who had lived at St. Joseph’s for six years, went seven days without a bath. Betty Zane Wingo, a ninety-four-year-old resident, went several months without having her hair washed. A resident who suffered from a severe lung disease told me that, one evening, her oxygen tube slipped out, and it took an hour and a half and a call to 911 to get it plugged back in. Several family members told me they called the nursing station to express concerns but that no one picked up. On morning shifts, the home’s nurse aides now changed briefs so saturated with urine they’d turned brown.

Bob Cumber cherished the care that his mother, Bertha, had received under the Little Sisters. One Christmas Eve, a nun had stayed late to file a hangnail on Bertha’s foot. After Portopiccolo acquired the home, Bertha appeared increasingly unkempt. Her hair was dirtier, her teeth coated in plaque. Whenever Cumber visited, she asked him for water. Bertha was a hundred and four years old, but the decline in her care was conspicuous. She had lost weight and developed open bedsores on her hip and buttocks and near her anus. Cumber tried to share his concerns with her nurses. “When I called there, I was put on eternal hold,” he said. Bertha told her son she was ready to pass away. “Mama,” Cumber said, “I don’t want you to leave.”

One evening in September, four months after Portopiccolo purchased the home, Bertha grimaced in pain as a nurse turned her in bed. Cumber, a former pharmacist, and his sister, a nurse, had specified in Bertha’s chart that she was not to be given morphine, expressing preference for a milder painkiller; they asked to be called if a dose of morphine were ever necessary. But the nurse didn’t call. Instead, she released two milligrams of morphine under Bertha’s tongue, according to Cumber. Within an hour, another nurse administered another two-milligram dose. (The spokesperson for Portopiccolo disputed this claim, but noted that he couldn’t provide additional context or comment, owing to privacy regulations under the Health Insurance Portability and Accountability Act, or HIPAA.) Bertha slept for two days. Cumber stayed by her side as her breathing grew labored. He held his mother in his arms, his head against hers. Her breathing slowed, then stopped altogether.

Since the turn of the century, private-equity investment in nursing homes has grown from five billion to a hundred billion dollars. The purpose of such investments—their so-called value proposition—is to increase efficiency. Management and administrative services can be centralized, and excess costs and staffing trimmed. In the autumn of 2019, Atul Gupta, an economist at the University of Pennsylvania, set out with a team of researchers to measure how these changes affected nursing-home residents. They sifted through more than a hundred private-equity deals that took place between 2004 and 2015, and linked each deal to categories of resident outcomes, such as mobility and self-reported pain intensity. The data revealed a troubling trend: when private-equity firms acquired nursing homes, deaths among residents increased by an average of ten per cent. “At first, we didn’t believe it,” Gupta told me. “We thought that there was a mistake.” His team reëxamined its models, testing the assumptions that informed them. “But the result was very robust,” Gupta said.

Cost-cutting is to be expected in any business, but nursing homes are particularly vulnerable. Staffing often represents the largest operating cost on a nursing home’s ledger. So, when firms buy a home, they cut staff. However, this business model has a fatal flaw. “Nurse availability,” Gupta and his colleagues wrote, “is the most important determinant of quality of care.”

At homes with fewer direct-care nurses, residents are bathed less. They fall more, because there are fewer hands to help them to the bathroom or into bed. They suffer more dehydration, malnutrition, and weight loss, and higher self-reported pain levels. They develop more pressure ulcers and a greater number of infections. They make more emergency-room visits, and they’re hospitalized more often.“They get all kinds of problems that could be prevented,” Charlene Harrington, a professor emeritus of sociology and nursing at the University of California, San Francisco, said, of residents at homes with lower nurse-staffing levels. “It’s criminal.”

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