Nonprofit Versus For-Profit Senior Care – Is There a Difference?

Nonprofit Versus For-Profit Senior Care – Is There a Difference?


Visiting a nursing home or assisted living facility can help with getting a sense of organizational culture.(Getty Images)

When it comes to senior care – whether trying to discern what level of care is needed, or picking a specific nursing home – there’s no shortage of considerations for individuals and their loved ones. So, it could be easy to overlook ownership status: namely, whether a facility is for-profit or nonprofit.

While there’s plenty of nuance, and ownership structures vary beyond simply the profit question, experts say this is still a worthwhile distinction to take into account.

“In general, the average for-profit facility has been found to have poorer quality of care relative to the average not-for-profit facility,” says David G. Stevenson, an associate professor of health policy at Vanderbilt University Medical Center in Nashville. “That’s been shown in previous studies over many years really looking at a variety of indicators, whether it’s that they tend to have lower staffing, whether they tend to have worse quality scores, worse inspection ratings – things like that.”

To be sure, experts say there are certainly exemplary for-profit senior care options, and there are also poor non-profit facilities. “Consumers need to look at individual facilities on their own merit,” says Debra Lancaster, executive director of the Center for Women and Work at the Rutgers School of Management and Labor Relations. “But because the evidence suggests that residents have better outcomes in facilities that are owned by nonprofits, that’s certainly a good place to start, and a very reasonable place to start.”

From skilled nursing to assisted living to home health and hospice care, however, the industry is predominantly for-profit. That differs from, say, the hospitals in the U.S. which are majority nonprofit. “In the nursing home industry broadly around two-thirds of all facilities are for-profit,” Stevenson says. “So in some markets people might not have a broad selection of not-for-profit facilities,” – whether there are few if any local nonprofit nursing homes or limited available beds.

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As to why nonprofits may be found to perform better, on average – that’s not so simple to determine. Some of it may be a result of a mission focus that grounds the work. Whereas with a for-profit there’s focus and pressure on making money; and if they have shareholders, the organization would be accountable to those shareholders, Lancaster says. But she adds, “certainly individual for-profit facilities can be incredibly mission-driven and have good quality outcomes.” And nonprofits can lose sight of the big picture, just as any organization can.

So while profit status is worth considering, experts say so too are other aspects of ownership, management and overall organization culture.

“Ownership structures have gotten much more complex, and part of that has been separating out real estate from the operations,” Stevenson says. This can be done by divvying it up into so-called single-purpose entities: one that owns the real estate, and a separate entity to operate the nursing home. That’s muddied the ownership consideration as it relates to evaluating possible senior care options. “Even on the operations side you might have different kind of ownership structures separating out different parts of operations, and also shielding owners from liability for things that might happen in a particular facility,” Stevenson says. “So it’s become more complicated in terms of holding entities accountable for the quality of care that’s provided. And I think for-profits have used those structures more aggressively than not-for-profits.”

The average consumer or loved one would be at a loss to determine what complex ownership arrangements could mean ultimately in regards to the care a person might receive. In such circumstances, if weighing senior care options and unsure about such complexities, it may be worth consulting with a knowledgeable professional, like a geriatric care manager who has insights into the inner workings of the industry, before making a decision.

What’s more, standard rules apply – like visiting a nursing home or assisted living facility to get a better feel for the place – and can help with getting a sense of organizational culture. Take the tour. And while you’re at it, talk with the staff. Ask, for example: “How long have you been here? What do you like about it? What’s going well? How many residents do you work with on this wing?” Lancaster suggests. If you’re able to take a meal in the dining hall, that’s another good opportunity to experience what the place is like. Consider: “How are residents being cared for and served, and is it with dignity?” she says.

In addition to talking with an administrator on-site, the way a place is managed – leadership’s approach to senior care – will come through in how residents are treated. That’s all the more reason, experts say, it’s key to check out options firsthand as well as paying attention to inspection reports and using resources like governmental website Nursing Home Compare managed by the Centers for Medicare & Medicaid Services to evaluate facilities.

“As you can imagine … there’s a lot of variation within for-profit facilities and within not-for-profit facilities,” Stevenson says. “So when an individual or a family is looking for a specific facility, that profit status is kind of generally useful as a signal, but you always have to look at the individual facility to learn more about it.”

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Michael O. Schroeder, Staff Writer

Michael O. Schroeder has been a health editor at U.S. News since 2015. He writes health stories…  Read moreMichael O. Schroeder has been a health editor at U.S. News since 2015. He writes health stories on a wide range of topics from mental health to medication side effects, and he manages the blog For Parents. Michael has reported on health and wellness since 2005, and he’s also covered everything from business news to governmental affairs for various newspapers. His stories have also been published in HuffPost, MSN, Yahoo!, WTOP, The Washington Post and The Indianapolis Star. He’s also an active member of the Association of Health Care Journalists. Michael has a bachelor’s degree in English from Wabash College and a master’s degree in journalism from Indiana University. You can follow him on Twitter or email him at [email protected]

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