Yuki Iwamura/AP Photo
Pharmacists prepare COVID-19 vaccines for nursing home residents in Harlem.
Private equity ownership of nursing homes increases the likelihood of death of residents, according to a new paper by the National Bureau of Economic Research cited in a recent New York Times op-ed. Everywhere you look, it seems there are new reports of private equity pillaging, whether in retail or in newspaper ownership.
Serious reform of private equity will take legislation. Elizabeth Warren, no surprise, has provided the blueprint, in her Stop the Wall Street Looting Act. And now that she chairs a subcommittee of the Senate Banking Committee, she can pursue more investigations of abuses.
But this kind of reform legislation will take ending the filibuster, as well as bringing along Wall Street Democrats, and that will take time.
But in the meantime, the Biden administration does have the power to crack down on private equity abuses at nursing homes. That because most nursing home expenses are paid by Medicaid.
Medicaid could get much tougher when private equity owners cut staffing ratios or depress wages. Medicaid could even compel changes in ownership.
Under the next budget reconciliation (which only requires 50 Senate votes plus the vice president), Congress could provide more money for Medicaid nursing homes with the proviso that the money go to better staffing and higher earnings. Congress could even mandate a minimum wage for nurse aides, paid with public funds.
Our president has been thinking big. He can think even bigger.
