Private equity's takeover of homecare has been detrimental to workers, reports reveal

Profit-seeking private equity funds that are rapidly taking over New York's homecare industry have exacerbated the low pay, poor support and exploitation faced by homecare workers, two studies from researchers at the Cornell University's school of Industrial Labor Relations reveal.  

The first study, released in June, found that private equity has benefited from weak state-level regulations, a divided, vulnerable workforce and the 2025 shift, backed by Governor Kathy Hochul, of over 50 percent of homecare services in the state from 600 companies to just one business, the private equity-owned Public Partnerships LLC.  

The second, September study focused on the experience of homecare workers who told researchers that after private equity took over their companies, automation was instituted, and communication, wage theft, managerial negligence and scheduling all worsened. This often resulted in poorer care for patients in need. 

"They don't allow us to take off days for funerals," one unnamed worker told researchers. "They don't allow us to take off days for emergencies, like if we have sick children. I don't have children, but I have friends that work for [my agency] that have children that was sick… you get written up for those. That's what they do. They'll write you up.” 

But the consolidation of over half of the state's homecare companies under one private equity-backed company could be a boon for one of the key moves workers could take that the studies' authors argue could benefit homecare workers: unionization.

'Working conditions in homecare are pretty abysmal across the board'

One of the studies' authors, Zoë West, a senior researcher on worker rights and equity in the ILR School's Worker Institute, told The Chief in an interview that homecare was an industry ripe for the picking for private equity firms due to low pay, few regulations and low level of unionization among the workforce. Private equity owners often made those problems worse, the studies found. 

"Our study found that private equity owners took advantage of the worker exploitation that is prevalent across home care, perpetuating poor working conditions including low wages and wage theft, managerial negligence, and unsustainable hours," reads the second study, titled Private Equity’s Impact on Home Care Workers and Patients in New York State. "We also found that under private equity ownership, agencies often implemented increased automation and use of technology that depersonalized workers’ and clients’ experiences and exacerbated the problems with managerial negligence." 

In 2023, New York State had 566,160 home health aides and personal care aides making median annual earnings of $25,738. Most of the burden of the homecare industry is shouldered by women of color – 87 percent of homecare workers in New York in 2023 were women and 81 percent were people of color.  

Beyond the low pay, the workers often suffer from inconsistent schedules, with some not working enough and many others pushed into 24-hour shifts for which they only receive pay for 13 hours.  

"Working conditions in homecare are pretty abysmal across the board," West said. "What we saw is that with private equity firms, they are perpetuating the bad working conditions that are rife across the industry."   

A decade of private equity involvement

Private equity has been a consolidating force in the state's homecare industry. Funds' acquisitions of homecare companies began skyrocketing in 2015 and continued at a consistent clip through January of this year, showed the first study, titled, Private Equity Pathways into Home Care: The Case of New York State.

The funds typically buy up individual, typically for-profit, homecare companies that can cost hundreds of millions or billions of dollars each. In 2021, the year with the most private equity transactions, more than $7 billion changed hands through purchases, sales of companies, or debt refinancing.   

Through mergers the funds increase their overall profits by cutting administrative positions and taking other measures that often make it more difficult for workers to receive support when they run into an issue with scheduling or those they care for, the initial report found. 

Medicaid dollars flowing

The low standards of pay and poor working conditions draw private equity into the industry, West explained, as does the accessibility of public funding, through Medicaid, that backs homecare. 

"New Yorkers should be able to ask the question: 'do we want private corporations and private equity firms and other financial actors to be reaping profits off of our public dollars, our Medicaid dollars? Or are there other models... for thinking about how profit should not be the primary motive in care provision?'" West said. 

The studies' authors expected that the amount of Medicaid dollars flowing to private equity would skyrocket this year due to the Public Partnerships LLC. taking over the Consumer Directed Personal Assistance Program (CDPAP), a Medicaid-backed program that accounts for over 50 percent of all of the homecare in New York State.  

Unionization is key

But the consolidation of CDPAP into one private equity-backed company has been a win for Local 1199 of the Service Employees International Union that represents employees at some of the 600 companies that the state utilizes for CDPAP. Having all of the homecare workers under one roof makes them easier to unionize and, eventually, secure a contract that increases wages and benefits. 

Local 1199 is a massive player in the state's homecare industry, and earlier this year announced that it had filed with the National Labor Relations Board for a union election covering over 190,000 homecare workers under CDPAP. According to the New York Times, the union has secured signed union authorization cards from more than 70,000 workers across the state, enough to authorize an election.  

"These reports underscore what home care workers have been saying for years: the people providing essential care to older New Yorkers and people with disabilities deserve sustainable wages, meaningful benefits and a real voice on the job," Rose Ryan, a spokesperson for Local 1199 said in a statement. "That’s exactly what 1199SEIU is fighting for: to ensure workers and the people they care for come first, with strong standards, real accountability and the right for workers to organize.”   

Gaining the protection of unions, the reports' authors argue, is one of the only ways that workers in the homecare industry can push back on the worst effects of private equity, raise their wages and improve their working conditions. 

"When they're dealing with workplace issues, having a union or a workplace center, some kind of worker advocate to turn to, it's one important factor for workers not feeling like they're abandoned and left for their own devices to deal with wage problems or any other problems on the job," West said