Real estate investment trusts’ investments in nursing homes can impact a critical component of care quality, according to a first-of-its-kind study published today in Health Affairs, a peer-reviewed journal.
“For so long, REITs have been considered just the landlord,” not as players significantly influencing nursing-home operations, said Robert Tyler Braun, an assistant professor at Weill Cornell Medical College and co-author of the study. Widely seen as passive investors simply collecting rent checks, REITs generally haven’t been listed as owners in federal nursing-home data or subjected to the raft of regulations that apply to facility operators.
REITs, which must pay out 90% of taxable income to shareholders annually in the form of dividends, can offer tantalizing yields to investors. Major REIT owners of nursing homes include Omega Healthcare Investors OHI , which yields 9.4%, CareTrust REIT CTRE , which yields 5.6%, and Sabra Healthcare REIT SBRA , which yields 9.1%.
In the new Health Affairs study, researchers compared staffing before and after nursing homes received REIT investment with staffing in for-profit nursing homes that had no REIT involvement. REIT investment was associated with increases in the number of licensed practical nurse and certified nursing assistant hours per resident day, while results for the overall post-investment period showed no significant relative change in registered nurse staffing.
REITs’ impact on the quality of care, which wasn’t directly measured in the study, “could be good or bad,” Braun said. “The jury is still out on that.” What’s clear, he said, is that “after the acquisition takes place, the REIT has influence on the staffing of the nursing home operation.”
Don’t blame the nurse who is assigned 30 patients, blame the CEO who cut staffing