Debate over private equity ownership of nursing homes surfaces at Aging Committee hearing

Supporters of SB 13 32 told the Aging Committee that private equity ownership of nursing homes has been associated with lower staffing, poorer inspection ratings and higher civil penalties in other states, and that Connecticut should bar future acquisitions by private equity firms and REITs that prioritize short‑term profit over patient care.

Jean Mills Arana, an elder law attorney with Connecticut Legal Services, testified that private equity ownership models often use layered related‑party fees and rent arrangements that divert funds from resident care into profits for investors. Arana cited research comparing private equity‑owned homes with other homes that found lower inspection ratings, fewer nursing staff and larger federal civil money penalties in the private equity‑owned group.

Mairead Painter, the state long‑term care ombudsman who testified earlier in the hearing, also told the committee she has seen “aggressive cost‑cutting strategies” and staffing reductions tied to private equity ownership and urged greater transparency and oversight.

Opponents urged caution. Matthew Barrett, president and CEO of the Connecticut Association of Health Care Facilities, representing skilled nursing operators, said an outright ban would be unusually broad and risk unintended consequences. He argued that Connecticut has not seen the same pattern of “quick profit” private equity transactions in its nursing home sector as some other states and that state oversight and federal disclosure rules already increase transparency. Barrett urged more targeted disclosure and oversight measures rather than a blanket prohibition.

Barrett told lawmakers that nursing homes need access to capital to remain viable, and that private investment can, in some cases, provide favorable lending terms. He said the Department of Public Health already has rigorous processes to evaluate character, competence and financial fitness when ownership changes occur.

Why it matters: SB 13 32 would directly affect how nursing homes can be bought and sold in Connecticut and could reshape options for capital investment in a sector confronting facility closures and infrastructure needs. Supporters said the ban would protect resident care; opponents warned it could constrict financing and leave some operators without the capital they need to maintain buildings and services.

What lawmakers heard in committee: Supporters urged the committee to prevent a business model that has been linked elsewhere to poorer outcomes; opponents asked legislators to consider narrower tools — for example, pre‑transaction notifications, expanded disclosure of related‑party transactions, or new enforcement mechanisms — to address harmful practices without removing all private investment.

Key speakers: Jean Mills Arana, elder law attorney, Connecticut Legal Services; Matthew Barrett, president and CEO, Connecticut Association of Health Care Facilities; Mairead Painter, state long term care ombudsman.

Next steps: The committee may consider amendments that narrow the scope of SB 13 32 to target harmful practices (related‑party rent/management fees, rapid asset stripping) or add pre‑transaction review and disclosure requirements rather than an outright prohibition.