Private Duty Nursing Negatively Impacted by Private Equity, Study Says

CHICAGO—Private Equity Stakeholder Project (PESP), a nonprofit organization who identifies, engages and connects stakeholders affected by private equity, announced the release of a new report, “Private Equity’s Investments in Private Duty Nursing,” which exposes how the private equity business model influences private duty nursing (PDN) services. The report details how private equity firms’ strategies could divert essential resources away from patient care.

Private duty nursing is a critical form of individualized care that enables medically fragile individuals to remain in their homes rather than in institutional settings. However, PESP’s report shows potential risks with private equity-owned nursing agencies in which financial returns are prioritized over patient well-being.

“Our research shows that private equity’s debt-based business model and focus on outsized returns create risks for some of the most vulnerable patients and their families who rely on private duty nursing agencies,” said Mary Bugbee, healthcare director at PESP and author of the report. “Agencies saddled with excessive debt may rely on cost-cutting measures that exacerbate staffing and low wages for nurses, ultimately compromising the quality and accessibility of care.”

The report features testimonials from families who receive nursing coverage from private-equity owned companies, including one Illinois parent who shared how it felt like she and her partner had been misguided during their vetting process with the different agencies they were considering for their son’s care. They had been open about their desire to have a small agency experience, but shortly after choosing an agency called MyLife, it became clear that it had been acquired by Team Select Home Care, a private equity-owned chain. 

Key findings from the report include:

• Financialization of Care: Private equity firms are investing heavily in PDN, driven by the opportunity to consolidate fragmented markets and generate significant returns, despite persistent labor shortages and low Medicaid reimbursement rates.
• Business Model: The private equity model, often financed by substantial debt, can lead to cost-cutting measures that worsen working conditions for nurses and negatively affect the consistency and quality of patient care.
• Patient & Family Impact: Case studies of private equity-owned companies, including Team Select Home Care and Aveanna Healthcare, reveal how private equity’s debt-fueled expansion and cost-cutting practices could lead to significant challenges for parents seeking reliable nursing coverage for their medically complex children.
• Medicaid Misuse: Most private duty nursing services for pediatric and adult patients with complex medical needs are paid for by Medicaid. Without guardrails in place, investor-owned and other for-profit home health care agencies can legally siphon Medicaid dollars away from direct patient care, as patients and their families struggle to find long-term, reliable and quality nursing coverage.

At the end of the report, PESP calls for stronger antitrust enforcement, limitations on debt financing in health care acquisitions and the expansion of paid caregiver programs with robust oversight to ensure accountability and protect patients.

The report emphasized that cuts to Medicaid are not the path forward to improving access to quality care for individuals and families who rely on private duty nursing. 

“To counter waste, abuse and fraud in Medicaid, states and the federal government must have appropriate accountability provisions and guardrails in place to ensure that Medicaid dollars are allocated where they are needed and are not diverted to line investors’ pockets instead of supporting patient care,” PESP said. “This will be more important than ever as we enter a future with substantial reductions in Medicaid funding.”

The full report is available here.