A string of health and safety failures at Connecticut nursing homes has helped accelerate a nationwide push by state legislators to impose new restrictions on private equity firms operating in long-term care facilities — and Missouri is among the states where the company at the center of the controversy faces ongoing legal scrutiny.
Why It Matters
As the U.S. population ages and demand for nursing home beds grows, questions about ownership structures and their effect on patient care have moved from academic research into legislative chambers. At stake is the quality of care for some of the most vulnerable Americans, including elderly residents who rely on skilled nursing facilities for around-the-clock support.
What Happened
Two Connecticut nursing homes operated by Genesis HealthCare became flashpoints in the debate. Residents at St. Joseph’s Center in Trumbull were evacuated after Legionella bacteria was discovered in the facility’s water system. Within two months, the same residents had to be moved again when critical fire safety systems were found to be compromised. Separately, residents at Quinnipiac Valley Center were relocated following two deaths and a state health investigation at the facility.
Both homes were owned by Genesis HealthCare, a company that is facing lawsuits or active investigations in at least six states: California, Georgia, Massachusetts, Missouri, Nevada, and Vermont.
Connecticut responded by enacting legislation requiring private equity-owned nursing homes to disclose their financial dealings and prohibiting private equity firms from making day-to-day care decisions. Governor Ned Lamont also signed a related measure addressing private equity influence over hospitals.
By the Numbers
- The federal government estimated that roughly 5% of Medicare-enrolled nursing homes nationwide had private equity owners as of 2022.
- Some independent researchers place that figure as high as 13%, depending on how ownership is defined and tracked.
- At least seven states have passed legislation addressing private equity in healthcare settings: California, Indiana, Massachusetts, Maine, New Mexico, Oregon, and Washington.
- Illinois lawmakers sent two separate measures to Governor JB Pritzker covering healthcare mergers and acquisitions and private equity restrictions.
- Virginia is considering legislation aimed at curbing what sponsors describe as predatory property financing practices in nursing home operations.
Competing Views
The industry and its advocates argue that the legislative focus is misplaced. John Kane of the American Health Care Association and National Center for Assisted Living contends that targeting private equity ownership diverts attention from deeper systemic problems — particularly chronic Medicaid underfunding and a worsening shortage of caregivers — that affect the vast majority of nursing facilities regardless of who owns them.
Researchers who study long-term care take a different view. Gregory Orewa of the University of Texas at San Antonio argues that the ownership question cannot be separated from care quality. “Nursing homes exist to care for the most vulnerable who cannot care for themselves,” Orewa said, “so we should be holding private equity or anybody to high standards on providing quality care.”
Zoom Out
The legislative activity reflects a broader shift in how state governments are approaching healthcare consolidation. Private equity investment in hospitals, physician practices, and nursing homes expanded significantly over the past decade, drawing scrutiny from federal regulators and academic researchers who have linked certain ownership structures to cost increases and, in some cases, reduced staffing levels. The nursing home sector has attracted particular attention because residents typically have limited ability to choose or change facilities.
Missouri lawmakers have faced related pressures on property and fiscal policy in recent sessions. Debates over property tax relief amid rising assessments and broader legislative priorities have competed for attention as session deadlines approach, reflecting the challenge states face in advancing multiple regulatory fronts simultaneously.
What’s Next
The measures enacted in Connecticut and other states will serve as early models as additional legislatures take up similar proposals. Illinois is awaiting gubernatorial action on its two bills, and Virginia’s proposal remains in deliberation. Advocates on both sides are expected to press their cases in statehouses across the country in upcoming sessions, with the scope of financial disclosure requirements and operational restrictions likely to remain the central points of contention.