This week, I came across three separate articles on nursing homes. While each offered a unique perspective, together they painted a troubling picture of a system where financial interests often eclipse patient care. I’ve synthesized their key takeaways to share my opinion on the nursing home industry—and why I believe change is urgently needed.
What Are Nursing Homes Really Providing?
Nursing homes, more formally known as nursing facilities, generally provide two types of care: rehabilitative care, usually short-term, aimed at helping patients recover after hospitalization; and custodial care, or long-term assistance with daily living for patients who can no longer live independently. Most people don’t realize the distinction. When families tell me, “My mom is in rehab,” they’re often referring to a nursing home providing services paid for by Medicare post-hospitalization; however, once the rehab ends, many patients remain—transitioning to long-term custodial care. That’s when the financial burden shifts dramatically.
Who’s Paying the Bill?
Whether someone is recovering or living long-term in a facility, the setting is the same: a nursing home. But how it’s paid varies: Medicare covers short-term rehab (about 32% of residents); Medicaid covers long-term custodial care (about 56%).; private payers account for roughly 12%, with monthly costs averaging $13,000+.
By contrast, Medicaid pays nursing homes just $6,500–$7,000 a month. The funding disparity incentivizes facilities to accept Medicaid patients while cutting costs wherever possible.
A Profitable Web of Ownership
Over the past decade, the industry has undergone rapid consolidation. It’s now common for the same people to own multiple nursing homes—and also own the companies that provide food, cleaning, staffing, and administrative services. This creates a closed loop of profit: Medicaid pays the nursing home → The nursing home overpays its sister company for services → The profit is funneled back to the same owners.
One article revealed that facilities spend less than $10 a day per resident on food. Unsurprisingly, complaints about poor food quality have surged among my clients.
And if the nursing home itself begins losing money, the owners can declare bankruptcy without touching the profits siphoned off by the affiliated service companies.
The Patient Experience: A Downward Trend
Clients have repeatedly told me that the quality of care in these facilities is deteriorating. That lines up with my own experience. The nursing home where my parents once stayed has since changed hands, and the new reports I hear about these facilities are far from encouraging.
The Bottom Line
Patients are suffering while profits climb. Government programs are being billed full price—even as essential services like food and care are cut to the bone. Meanwhile, the structure of ownership and related-party payments makes it easy for operators to insulate themselves from accountability.