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What a Nursing Home Can Teach You About Your Air Conditioner

Our ratings data finds no quality penalty for PE-owned HVAC contractors. That non-finding, and what a star rating cannot measure, is the story.

Let’s start by conceding the point that hurts our argument most.

If private-equity ownership made HVAC service obviously worse, you would expect it to show up in the star ratings, the one quality signal a homeowner actually sees. It doesn’t. In our own data, we pulled the Google ratings for HVAC contractors we can tie to a PE-backed platform and compared them to the independents.1 The roll-ups came out marginally higher: 4.66 stars across 144 PE-platform contractors, versus 4.62 across 80 independents, and both groups have a median of 4.80.2 (That is a small, non-random sample of the enriched subset of our graph, and Google stars compress near the top for every home-services firm, so read it as a signal, not a precise audit.) There is no visible quality penalty in the stars. If anything, the consolidated shops review slightly better.

We’re leading with that because it’s true, and because the argument has to survive its own best counter-evidence. The industry’s defenders point to exactly this kind of number: private equity brings professional management, 24/7 dispatch, financing options, real benefits for technicians. A four-and-a-half-star roll-up is not a horror story.

So the interesting question isn’t “are the ratings worse?” They’re not. The question is: what doesn’t a star rating measure?

What a star can’t see

A Google review captures how a customer felt about an interaction: Was the tech polite? Did they show up on time? Did the AC blow cold when they left? Those are real things, and roll-ups can be genuinely good at them: punctual dispatch and friendly service are exactly what professionalized operations optimize.

What a star rating cannot see is whether the work was necessary, or whether the price was fair. The homeowner who was talked into a $12,000 system replacement when a $400 repair would have done (and who left happy, because the new unit works and the technician was courteous) gives five stars. The rating measures satisfaction, not whether the customer was overcharged or oversold. On the two dimensions where the harm would actually live, price and necessity of work, the star rating is silent. And those are precisely the dimensions where the most rigorous research on PE-owned local services has found problems.

We can’t show you that research in HVAC, because it doesn’t exist yet. But it exists, and it’s rigorous, in three adjacent trust-based services that were rolled up the same way a decade earlier.

The evidence we do have, in other people’s industries

The broadest read comes from a 2023 systematic review in The BMJ, which examined 55 studies of private-equity ownership across healthcare settings. Its conclusion: PE ownership “is often associated with harmful impacts on costs to patients or payers and mixed to harmful impacts on quality,” and, the line that matters, “no consistently beneficial impacts of PE ownership were identified.” The journal’s accompanying editorial was titled, flatly, “Private equity takeovers are harming patients.”3

Underneath that umbrella sit the specific numbers, each labeled by its industry:

  • Nursing homes (the most alarming, and the most rigorous). A landmark study using Medicare records for 7.4 million patients found that going to a PE-owned nursing home increased the probability of death during the stay and the following 90 days by about 10% (an estimated 20,150 lives lost over the sample period) while the amount billed rose about 11% and the use of antipsychotic drugs (discouraged in the elderly) jumped sharply.4 In nursing homes, not measured in HVAC.

  • Dental practices (the closest analogue to a service call). A peer-reviewed study by American Dental Association researchers, using a proprietary database of dental offices linked to claims data, found that after a PE acquisition, submitted charges rose about 3.4% while practices “shift[ed] away from diagnostic and preventive procedures to generally higher-cost restorative, specialty, or surgical care.” Dental-implant procedures per visit rose 14% right after acquisition and 46% four years later.56 The authors’ own summary is the tell: “financial enhancement of dental practices under private equity may not translate into benefits for providers or patients.” In dentistry, not measured in HVAC.

  • Veterinary care (context, not a clean PE-price number). The companion-animal trade went through the same consolidation frenzy (multiples reached 18–20× earnings at the 2021 peak), and veterinary prices have outpaced general inflation since 2019, with pet owners now visiting less and showing more price sensitivity.7 In veterinary care, and note this is industry-wide pricing and consolidation context, not a study isolating PE ownership’s effect on price.

The pattern across all three: ratings and satisfaction often hold up, but the price of care rises and the mix of work shifts toward the more expensive option. That is the shift a star rating is structurally incapable of detecting. To be explicit: every one of these figures was measured in the trade named beside it, nursing homes, dentistry, veterinary care, and none of them was measured in HVAC. What carries across is the incentive structure, an analogy about how a financing model behaves, not a measurement of, or a finding about, any HVAC company.

Why the mechanism travels, and where it might not

Analogies are only as good as the mechanism underneath them, so here is the case for why nursing homes, dental offices, and HVAC belong in the same sentence, and the case against.

They share a structure that makes overcharging easy and hard to detect. All three are trust-based (the customer can’t evaluate the diagnosis), information-asymmetric (the provider knows what’s wrong; you don’t), locally fragmented (ripe for roll-up), and frequently emergency-driven (a parent in declining health, a tooth abscess, a furnace dead in January), and urgency is the enemy of careful shopping. When the same financial model (buy, add debt, optimize for resale) is applied to any service with that shape, the incentive to convert a diagnosis into a sale is the same.

But the analogy is not proof, and the differences cut the other way too. A homeowner can get a second HVAC quote far more easily than a family can second-guess a nursing-home admission. An HVAC repair is a one-time decision, not a captive long-term stay. And, back to where we started, the HVAC ratings don’t show the penalty the nursing-home data shows. The mechanism transfers; the magnitude is unknown, and might be smaller.

What it means

For a homeowner, the practical lesson is plain: the star rating is the wrong tool for the decision that costs you the most money. A five-star contractor can still recommend a replacement you didn’t need, at a price you couldn’t evaluate, and you’ll never know, and you might still leave a five-star review. The defense isn’t checking the rating; it’s getting an independent second opinion before a five-figure replacement, asking whether a repair is possible, and treating “your system is obsolete, you need a whole new one” as a claim to verify, not accept.

For the trade and for researchers, the lesson is sharper: the study that would settle this hasn’t been done. Nobody has measured, with HVAC data, whether PE-owned contractors charge more or replace more than independents for the same problem. Until someone does, the rigorous evidence we have comes from the industries next door, and it leans one way. That’s an argument, clearly labeled as one, not a verdict.

The bottom line. Our own data hands the industry its best defense: PE-owned HVAC contractors don’t rate worse, they rate a hair better. But star ratings measure how a visit felt, not whether it was necessary or fairly priced, and in the trust-based services where private equity arrived a decade earlier and researchers have looked carefully, those are exactly the dimensions that suffered: higher charges, a shift toward the costlier procedure, and in nursing homes, worse survival. None of that has been measured in HVAC. The nursing home can’t tell you what your air conditioner costs. It can only tell you which questions a five-star rating was never designed to answer.

Sources

  1. Our figures come from the hvacrollups ownership graph: a curated, evidence-gated record, not a census, so the counts are a floor on the scale of consolidation. See our methodology and legal disclaimers. ↩

  2. Proprietary Data Findings: PE Roll-Ups of HVAC Service Companies (hvacrollups ownership graph), 2026-06-09, §5 (ratings) and §7 (data gaps). Internal research memo. ↩

  3. Borsa, Bejarano, Ellen, Bruch, “Evaluating trends in private equity ownership and impacts on health outcomes, costs, and quality: systematic review,” The BMJ 2023;382:e075244 (19 Jul 2023), and linked editorial “Private equity takeovers are harming patients.” Tier 1, analogical (healthcare). https://www.bmj.com/content/382/bmj-2023-075244 ↩

  4. “Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes,” Becker Friedman Institute / University of Chicago (Gupta, Howell, Yannelis, Gupta), 2021 summary of NBER WP 28474. Tier 1, analogical (nursing homes). https://bfi.uchicago.edu/wp-content/uploads/2021/02/Does-Private-Equity-Investment-in-Healthcare-Benefit-Patients.pdf ↩

  5. Nasseh, Lo Sasso, Vujicic & Downey, “Financial Incisors…” (the effects of PE ownership on dental offices; staggered difference-in-differences), SSRN 5025719 (charges +3.4%; shift to higher-cost restorative/specialty/surgical care). Tier 1, analogical (dentistry). Full subtitle to confirm at publish. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5025719 ↩

  6. “How does private equity ownership really affect dental practices?” Dental Economics, Jan 6 2026 (summary of the Nasseh/Vujicic Health Services Research study; submitted charges ~3.3%; implants/visit +14% baseline → +46% at four years). Trade summary of the above. https://www.dentaleconomics.com/macro-op-ed/industry-news/news/55341670/how-does-private-equity-ownership-really-affect-dental-practices ↩

  7. “Veterinarians report increasing price sensitivity, decreasing visits,” AVMA News (citing John Volk, Brakke Consulting), Feb 13 2026. Industry pricing/consolidation context, analogical (veterinary); not a PE-isolating study. https://www.avma.org/news/veterinarians-report-increasing-price-sensitivity-decreasing-visits ↩