Care Suffers as More Nursing Homes Feed Money Into Corporate Webs
Allenbrooke Nursing and Rehabilitation Center in Memphis is part of a chain of businesses that produced $145 million in revenue over eight years, from which the owners and their families’ trusts took 28 percent in distributions.
In what has become an increasingly common business arrangement, owners of nursing homes outsource a wide variety of goods and services to companies in which they have a financial interest or that they control. Nearly three-quarters of nursing homes in the United States — more than 11,000 — have such business dealings, known as related party transactions, according to an analysis of nursing home financial records by Kaiser Health News. Some homes even contract out basic functions like management or rent their own building from a sister corporation, saying it is an efficient way of running their businesses and can help minimize taxes.