Private equity firms are acquiring facilities that care for people with intellectual or developmental disabilities at an alarming rate, according to a new report released Tuesday.
The care industry for this population has been historically owned and operated by nonprofits and faith-based institutions. However, between 2013 and 2023, private equity firms made over 1,000 acquisitions of disability and elder care providers — a likely undercount, according to the report published by the Private Equity Stakeholder Project, a nonprofit watchdog focused on the growing impact of the private equity industry.
advertisement
While private equity ownership of nursing homes and autism care centers have been well scrutinized, their influence on care for people with disabilities has so far not attracted critical attention from the media. The report details the abuse, neglect and even deaths of people with IDD under the care of private equity-owned providers — and how their influence upon this population’s health care is growing.
While the hidden structures of private equity firms often obscure financials and lived realities from the public, the consequences of that influence could be significant. Private equity firms have a track record of abuse and neglect in many health care settings, and people with IDD routinely face significant health care challenges, such as higher rates of diabetes, mental illness, and other chronic conditions.
“They’re happening in the places where people live and they’re happening in a way that can impact the whole of a person’s life, not just going to unemployment or seeing a doctor when you’re sick,” said Eileen O’Grady, the report’s author. “It’s your whole life, where you live, where you eat, who you talk to everyday. The level of potential harm is way amplified in those settings.
advertisement
A confluence of factors that played out over the last decade has made the care industry for people with IDD particularly attractive for private equity firms. In recent decades, the disability community has pushed for their care to be located in integrated community settings, rather than in institutions such as intermediate care facilities. Home care has boomed, which led to scores of small-scale and regionally based facilities and nonprofits. As care has improved, there has been an increased demand for services as life expectancy jumped for people with IDD. More than 710,000 individuals were on the wait list for Medicaid home- and community-based care in 2024, according to a KFF study.
However, the industry has struggled in recent years to attract enough workers to meet this demand. This “highly-fragmented landscape” made it easy for private equity firms such as Alpine Investors and Centerbridge Partners to swoop in. “As private equity-owned platforms have gobbled up small regional providers and consolidated them, a number of large private equity-owned companies have emerged with tens of thousands of employees at numerous locations across the United States,” the report noted. Alpine owns Team Services Group, which employs about 100,000 people across 11 states while Centerbridge has ownership in Help at Home and Sevita Health, which together employ a similar number of people across nearly 40 states.
The resulting care and services have started to resemble the harms and struggles of institutional care that the disability community worked hard to distance itself from. Staffing has been reduced, employees are underpaid, services such as therapy are being cut, and many living conditions are unsafe or unsanitary, according to the new report.
The problems are not limited to a single company or state. In 2020, U.S. senators published two investigative reports regarding Sevita, a national provider of home care, which found routine neglect and a pattern of substandard care in Iowa and Oregon. Sevita also owns a smaller provider called NeuroRestorative, which almost lost its license to operate in Florida in 2024 due to a failure to “protect the rights of its clients to be free from physical abuse by initiating inappropriate and excessive restraints.”
advertisement
A 2022 investigation by the Austin American-Statesman found that the state’s Medicaid waiver system was so poorly regulated that it led to “horrific” incidents that resulted in the injury or death of many disabled Texans. Half of the employees who had endangered the lives of their clients were employed by four private equity-owned employees, according to the report.
In North Carolina, more than half of the beds caring for people with IDD are private-equity owned. RHA Health Services, which was acquired by Blue Wolf Capital Partners in 2019, oversees 42% of the total beds, while BrightSpring — owned by private equity firm KKR — oversees 11% of the beds.
States have some recourse for preventing such tragedies — monetary penalties or revoking a license to provide care — but the nature of private equity ownership means they can slough off their system in one state without the rebuke affecting their system in other states or regions. The report’s author recommends that states revise their penalties to ensure that private equity-owned providers prioritize care for their patients over profits.
A recent bulwark against this trend emerged when the Biden Administration issued a rule in 2024 that boosted federal oversight mechanisms for providers of home- and community-based services. The rule caused a stir because it established that 80% of Medicaid funds go to workers’ compensation. Republican Senators are urging the Trump administration to repeal this rule. Another potential bulwark: states must expand the process for individuals who receive home and community care to report adverse experiences in 2026.
Even with these tools, it’s a worrisome trend, said O’Grady.
“You’re seeing the really atrocious impact of private equity, combined with the fact that this is a pretty hidden and tucked away industry. It is very disturbing, especially because people with disabilities already have much worse access to health care,” she said.
STAT’s coverage of disability issues is supported by grants from Robert Wood Johnson Foundation and The Commonwealth Fund. Our financial supporters are not involved in any decisions about our journalism.
advertisement