Macro impact of private equity

Investment Analysis Clubs Macro Economic Trends and Risks
1

METARs have been reporting about the impact of private equity funds buying family homes for cash. This drives up the cost of housing, putting the cost of buying the house out of the reach of many families and raising the rents for those who can’t buy. This has a negative Macro impact on a whole generation of families whose cost of housing is rising even while they are shut out of home ownership.

Another negative impact is caused by private equity-owned nursing homes.

https://www.nytimes.com/2022/04/14/opinion/nursing-homes-cri…

**Nursing Homes Are in Crisis. We Can’t Look Away Any Longer.**

**By Jay Caspian Kang, The New York Times, April 14, 2022**

**...**
**In the early months of the Covid-19 pandemic, when the public learned about thousands of deaths in understaffed and poorly run nursing homes around the country, an optimist might have expected extensive and immediate change to that industry. ...** [Nope! Didn’t happen.]

**The administration criticized the “dangerous” trend of private equity firms increasing their investment in the industry from $5 billion in 2000 to more than $100 billion in 2018...Two-thirds of nursing homes are for-profit. ...**

**A lot of public money is going into nursing homes, but there’s no transparency about how those nursing homes are spending taxpayers’ money, or how much of it is going to the nursing home owner because he owns the building and is paying himself a very high rent....If you’re about to put your mother in a nursing home, you need to know who owns this nursing home and how much of the $7,000-a-month check you’re writing is going toward care for your mother.** [end quote]

The Macro impact is on the growing millions of frail elders who will be forced to enter these nursing homes, on their families who are paying a high price and on the government which pays for Medicaid clients (the majority).

High profits for private equity, poor care for the patients.

The cost is astronomical and growing.

Nursing home staff earn $10, $12 an hour — that’s like $20,000 to $28,000 a year. It seems that care would be less expensive and more personal by hiring caretakers in the home. What do METARs with experience say about this?

Wendy

7 Likes
2

Nursing home staff earn $10, $12 an hour — that’s like $20,000 to $28,000 a year. It seems that care would be less expensive and more personal by hiring caretakers in the home. What do METARs with experience say about this?

Thus, my preference for euthanasia when the time comes.

intercst

3 Likes
3

I understand private equity is going after vet clinics too.

1 Like
4

In answer to Wendy’s “What do METARs with experience say about this?”:

  1. Do NOT let yourself or a loved one end up in a corporate nursing home. PERIOD.

  2. Everyone needs to investigate what is actually available (and not the happy face tours most nursing homes can muster), and THINK it through.

  3. Nursing homes in Mexico and places such as the Phillipines and India are (no surprise) much less expensive and mostly much better, but Medicare and etc. do not pay for them and USAians in them needing hospitalization either need to have emergency transportation to a USA Medicare accepting hospital arranged (medevac insurance exists to cover this in many places) or need to accept Mexican hospitalization at less expense and probably less effectiveness, or simply accept and proclaim “when it comes to that I will go hospice” or the equivalent. Here https://rancholoslabradores.com/index.php is an excellent “gringo” senior focused residential facility near me that includes private homes, apartments, and nursing care facilities:

  4. Some of the best senior homes I have ever visited were basically communes run by the residents themselves in a system wherein new residents played an active role in helping the older residents. Think “The Golden Girls” but with a few more people and some of them no longer energetic and mobile. When you live like that you are FAR more likely to stick with your friends and do hospice in your own room.

  5. Mom was adamant about “So long as the Old Bat [herself] is happy and in her own home, why, help her keep going! When that’s over help her pull the plug.” She got to that attitude over years of watching family and friends struggle and die in ways that horrified her and still horrify me. The border between horror and useful medical care is murky and gray. So long as corporate $$$ and wishful thinking and frightened denial rules USAian end of life things will worsen.

david fb

15 Likes
5

Nursing home staff earn $10, $12 an hour — that’s like $20,000 to $28,000 a year. It seems that care would be less expensive and more personal by hiring caretakers in the home. What do METARs with experience say about this?

Wendy

Not for full time care.

The mother-in-law lived with us for 3 years. In the last year she was in our home we did hire daytime caregivers to watch over her. They cooked her meals, made sure she took her medicine and entertained her. They often brought sewing or craft projects and shared the activity with her. They charged $30 an hour. Mother-in-law had the funds to pay for the care. They were here 40 hours a week.

Slowly the mother-in-law started to need more around the clock care. That is when we had to move her to a retirement home. We were very fortunate that a sister-in-law was director of nursing there. This was at the beginning of Covid and all of the visiting restrictions. Having the sister-in-law there (the mother-in-law’s daughter -in-law) sure made it easier during the lock downs for her.

As for retirement homes in general, you really have to investigate them. Without going into detail, the mother-in-law was put into a retirement home in Oklahoma by her oldest son, against the wishes of the rest of the family. We visited her there 3 times. I wouldn’t let that place take care of any of my dogs, let alone a human family member.

There is one retirement home here locally that has what I think is a very unique program. They have two child daycare facilities within the home. The retirees that want to interact with the children are allowed to. It’s quite popular. I’m sure it was stopped during coved but will return whenever it becomes safe to do so.

gcr

8 Likes
6

Some of the best senior homes I have ever visited were basically communes run by the residents themselves

Indeed. But some organization started these homes. For instance, near us, one of the best “retirement” homes was started by the Friends (Quakers), and in order to get into the nursing home you have to have been a resident of the home earlier. People start in apartments or cottages, “graduate” to the assisted living floor, and then finally to the nursing home. Everyone does what they can to help each other; but of course they also have a professional staff. (And no, you don’t have to belong to their religion to get in.)

The problem is that there is a long, long waiting list for places like that.

1 Like
7

Nursing home staff earn $10, $12 an hour — that’s like $20,000 to $28,000 a year. It seems that care would be less expensive and more personal by hiring caretakers in the home. What do METARs with experience say about this?

To understand at home health care, you might want to mosey on down to the Taking Care of Parents board. These folks have been wrestling with keeping their loved ones at home, and it’s not just parents, with many not able to get a health care aide because of shortages of staffing.

Personally, I hope there is an elder care Au Pair that I, (or more likely our kids,) can hire from abroad when it becomes our time. I have no desire to go into a retirement facility, or worse yet a nursing home.

IP

8

… with many not able to get a health care aide because of shortages of staffing.

There’s always a market clearing price for low-skilled to unskilled staffing. At $50/hr you’d likely have your pick of excellent applicants.

The restaurants that are open in Portland seem to be paying $30/hr with benefits, but of course, that’s at odds with our poverty wage culture.

intercst

9

Some of the best senior homes I have ever visited were basically communes run by the residents themselves
…
Indeed. But some organization started these homes. For instance, near us, one of the best “retirement” homes was started by the Friends (Quakers), and in order to get into the nursing home you have to have been a resident of the home earlier.

I’ve long thought there should be a “Golden Girl” app, where you can search for or offer up rooms for senior living rental. Young adults needing affordable living in exchange for various services would be a great option to these as well.

Young person’s idea to run with. I offer it up freely and wish someone all the best in their efforts.

IP

1 Like
10

Nursing home staff earn $10, $12 an hour — that’s like $20,000 to $28,000 a year. It seems that care would be less expensive and more personal by hiring caretakers in the home. What do METARs with experience say about this?

I live in a densely elder populated State. About 15 years or so ago my MIL, who was widowed and living in her fully paid for home, started having falls which became frequent enough that we knew she needed help. That help included: prescription care; toileting help; bathing help; and general assistance moving around. So that translated into 24/7 care. My wife (MIL’s daughter) and I got the names of reputable home health care individuals and agencies. When priced out over a year’s worth of care, the amount was substantially higher than all but two assisted care facilities in a 3 county area. (and I agree that some of the lower priced ones I would not care to put a dog into)

The problem is that prescription oversight is regulated in our State and, thus, required more than just caregiver licensing. And almost any type of private nursing professionals are the cream of the crop and their fees were much higher than those you mentioned, and mostly came with a minimum number of hours per shift requirement.

When one factors in the number of “factors of daily living”: toileting, ambulation, dressing, medication care, cooking and financial affairs management…as each of those get added to the care list, each comes with an additional price.

She lived for many years in 2 different facilities. Living to a ripe old age is quite expensive once the factors of daily living become increasingly expanded and need to be attended to. Her net worth was completely eroded before she passed on, and we had to make up the difference.

This has serious Macro ramifications on both the elderly and on their children who lose out on the decreased inheritance (at best) or have to amend their own retirement plans.

As we live longer and longer due to marvels of modern chemistry, our planning must continually be updated.

6 Likes