Bulletin #5 March 28, 2026
In This Bulletin:
We begin a new CHIP series tracing how capital actually moves through the U.S. nursing home system. Our focus is not on operators alone, but on the financial structures that convert public dollars into private, tax-advantaged wealth.
In 2024, nursing homeowners collected $170.5 billion in revenue from Medicare, Medicaid, and out-of-pocket payments. The profit sector received $125 billion, or 73% of all revenue. These figures reveal the scale of public dependence. But they do not reveal the full economic value of the system to investors. The federal tax code adds substantial, often invisible, value to this revenue – value that accrues overwhelmingly to private owners, investors, and family wealth vehicles.
Industry lobbyists routinely claim that Medicaid reimbursement is too low to provide a fair return on investment. Yet this narrative collapses when the full financial architecture is examined. Through related party transactions, depreciation rules, capital-gains treatment, and a wide array of tax-sheltering mechanisms, owners can extract far more value than appears in cost reports or public filings. These channels are opaque by design, and they have allowed the industry to present incomplete and misleading information to legislators, regulators, and the public.
Bulletin # 5 focuses on how we transform public funds into private capital – in individual, family, and business trusts, one of the most powerful and least understood components of the privatized public funded long-term care. Trusts are now one of the dominant forms of beneficial ownership in the nursing home sector of the health care industry. In the latest CMS Ownership Data file, more than 1,700 beneficial owners are trusts of various kinds. These trusts allow owners to hold assets without public visibility, separate legal control from economic benefit, shelter capital gains, and transfer family wealth across generations – all while drawing income from publicly funded care.
Understanding trusts is essential to understanding how the nursing home system creates, enhances, and preserves private wealth. This bulletin brings that structure into view.
What is a Trust, and why does it Matter in Nursing Home Ownership?
A trust is a legal arrangement that separates who controls an asset from who benefits from it. Instead of an individual owning property directly, the property is placed “in trust,” and three roles are created.
- Grantor
- Trustee
- Beneficiary
The key feature is this: public records usually show only the trustee, not the beneficiary. That means the person or persons who ultimately benefit from the nursing home’s profits, real estate, or tax advantages often does not appear in ownership filings.
Why Trusts are used in the Nursing Home Industry:
Trusts are attractive to owners because they allow them to:
- Hold assets privately – Beneficiaries are not listed in CMS ownership files.
- Shield wealth from liability – Assets in a trust are harder to reach in a lawsuit.
- Reduce taxes – Trusts can shelter capital gains, shift income, and take advantage of depreciation rules.
- Transfer wealth across generations – trusts allow families to pass nursing home assets to heirs with little tax exposure.
- Separate control from benefit – a trustee may appear to own the facility, while the economic benefit flows to someone else entirely.
Why this matters for public oversight:
Nursing homes depend overwhelmingly on Medicare and Medicaid. When ownership is routed through trusts:
- Regulators cannot easily identify who actually profits from public funding.
- Financial risk is shifted away from owners and onto the public.
- Wealth extraction becomes harder to trace, measure, or regulate.
The increasing number of trusts as beneficial owners appearing in the CMS Ownership PUF Data file should be concerning to advocates, researchers, journalists, and public officials. They are one of the least transparent ownership vehicles in the system. As visibility into the operations of privatized operators decreases, so too does accountability. Ownership outside of the purview of regulators and public oversight reduces the capacity for legal, legislative, and regulatory action.
The Pruitt Chain: An Example of Opaque Nursing Home Ownership.
The Pruitt family – owners of 95 mostly low rated long-term care facilities – operates the 8th largest nursing home chain in the U.S (see CHIP Statistical & Financial Bulletin #1, February 2026). Their ownership structure illustrates how trusts function as opaque financial vehicles inside the nursing home system.
In the Nursing Home Care Compare online guide for the public, ownership listings for PruittHealth typically appears in the example below. What looks like a straightforward ownership table is, in fact, a dense cluster of individual and family trusts, each holding significant beneficial interests while revealing almost nothing about the actual beneficiaries.
This example illustrates how major nursing home chains use individual and family trusts to hold substantial beneficial interests while disclosing almost nothing about the actual beneficiaries. Although the table appears straightforward, every trust listed here represents a separate legal entity with its own tax treatment, liability protections, and wealth transfer advantages. The public only sees the trustee names – the individuals who ultimately profit from Medicare, Medicaid, and out-of-pocket payments.
What the Pruitt Trusts Tell Us About Ownership Transparency.
The ownership listing for PruittHealth – Union Pointe facility – includes four separate Pruitt family trusts:
- J. Paige Pruitt Trust
- Lisa P. Hamby Trust
- Neil L. Pruitt Jr. Trust
- NWP 2020 Chile Trust FBO Neil L. Pruitt Jr
Together, these trusts show how a single family can hold extensive economic interests in a nursing home chain while appearing only as trustees in public filings. The structure allows the Pruitt family to:
- Consolidate control across dozens of facilities without listing individual beneficiaries.
- Shield wealth from liability and public scrutiny.
- Extract value through tax-advantaged mechanisms unavailable to ordinary operators.
- Transfer wealth derived from public funds across generations with minimal tax exposure, while contributing to the growing maldistribution of wealth to the wealthiest residents from lower income strata.
Trusts like these are not anomalies – they are now a defining feature of ownership in the U.S. nursing home system. This example sets the stage for deeper forensic analysis that follows, showing how trusts function as the hidden architecture through which private owners convert public money into their permanent capital assets.
Billions of Taxpayer Provided Revenue is Sheltered by Executives and Board Members of Publicly Listed Corporations in the Nursing Home Business.
The various trusts listed as owners of facilities in the CMS Ownership PUF Data file do not include the $billions in stock awards and other compensation sheltered in trusts by executives and board members of publicly listed corporations such as The Ensign Group, The PACS Group, Brookdale, and REITs such as Welltower, LTC Properties, CareTrust Reit, Sabra, National Health Care, Ventus, and DHCNI.
Why is this Important?
Trust funds are set up by the wealthy for sheltering individual and family wealth from taxes – most often from capital gains, corporate/business income, and inheritance taxes. Money owed to the government but legally retained for further investment is a tax expenditure that enhances personal wealth at the expense of other taxpayers.
Capital is advantaged and labor is disadvantaged by a taxing system that allows the wealthy to retain owed taxes while tax deductions on wages and salaries are deducted immediately from paychecks. Therefore, government is funded on the backs of wage and salary workers. By sheltering earnings, not taking gains, and letting assets grow, the capitalist class avoids its share of responsibility for funding government. In this manner, nursing home investors leverage Medicaid, Medicare, and self-pay into value added revenue.
Editor’s Note
The past four issues of the Chip bulletin series have discussed ownership, real estate arrangements, and how public dollars are converted into private gain. We will continue to explain and clarify how Medicaid, Medicare, and out-of-pocket payments move through a system designed to extract value long before those dollars ever reach the bedside.
Beginning with this issue, we turn to a deeper and even more consequential layer of the system – the federal tax code, which quietly transforms nursing home revenue into a powerful engine of wealth creation. While policymakers and scholars often focus on reimbursement rates or staffing levels, the tax code determines something far more fundamental: how much profit the system can generate, how that profit is sheltered, and who ultimately benefits from it.
This new series will explain how the tax code amplifies the financial returns of nursing home ownership, shapes the incentives of operators and investors, and enables the long-term accumulation of wealth from facilities that depend overwhelmingly on public funding. These mechanisms are largely invisible in academic research, regulatory oversight, and public debate. Yet they are central to understanding why the industry looks the way it does – and why it resists reform.
We begin with trusts, the most overlooked ownership structure in the field. Trusts are widely used to hold nursing home assets, obscure beneficial ownership, shelter capital gains, and transfer wealth across generations with minimal tax exposure. Despite their prevalence, trusts are almost entirely absent from the scholarly literature on nursing home finance. By examining how trusts function within this system, we reveal the intergenerational logic of extraction that underlies much of the industry’s behavior.
In the bulletins that follow, we will extend this analysis to real estate financial mechanisms such as UPREITs and tax-write-downs, showing how institutional investors and operators use the tax code to convert depreciation, losses, and real-estate transactions into predictable streams of tax-advantaged profit. Combined, this financial engineering forms a coherent financial architecture – one that rewards ownership and extraction far more than care.
This series aims to make that architecture visible. Understanding the tax code is essential to understanding the nursing home system itself. Only by following the money upstream can we see how public dollars become private wealth, how that wealth is protected, and why the system continues to fail the people it is supposed to serve.
David E. Kingsley, PhD