Nursing home residents have become monetized targets of real estate acquisitions. Established in 1960, Real Estate Investment Trusts (REITs) were envisioned as allowing individuals to invest in commercial real estate without owning properties. That seemingly innocuous investment idea has led to the growth of a behind-the-scenes empire of little-understood conglomerates of REITs buying up nursing homes and other healthcare facilities across the country. Capitalizing on tax-exempt income incentives, exploiting “triple-net” leasebacks, funneling profits through subsidiaries, and shielding ownership and assets from the liability of operations, the corporatized owners extract cash from facilities and leave harm in their wake. And to grow the extractive operations, individuals and corporations can often invest in REITs on the stock market, lured with dividends siphoned from the “silver tsunami” of aging humans.
REITs are not alone, as private equity (PE) firms of every size have also set their sights on nursing homes. Further, local government hospital systems in multiple states are now mimicking private profiteering by similarly buying up nursing homes, not to improve care, but to take their Medicaid funds for other uses. The acquisition strategies of REITs, PE firms, and county hospital systems vary in structure, but they all share a common commodification need: bodies in the beds—maximizing occupancy rates while minimizing money spent on care—to increase the cash siphoned away.
This Article maps the maze of parasitic nursing home acquisition, revenue strategies, and resulting concerns, concluding with a call to curtail the practices—to convert the harm into care.