Market competition and the quality of nursing home care

Certificate of Need Laws in Health Care: Past, Present, and Future

Certificate of need (CON) laws limit the supply of health care services in about two-thirds of U.S. states. The regulations require those who wish to offer new services or expand existing services to first prove to a regulator that the care is needed. While advocates for the regulation have offered several rationales for its continuance, the balance of evidence suggests that the rules protect incumbent providers from competition at the expense of patients, payors, and would-be competitors. In this article, I review the history of CON laws in health care, summarize the large literature evaluating them, and briefly sketch options for reform.JEL Classification: I11, I18, H75.

Market concentration, supply, quality and prices paid by local authorities in the English care home market

We investigate the impact of exogenous local conditions which favor high market concentration on supply, price and quality in local markets for care homes for older people in England. We extend the existing literature in: (i) considering supply capacity as a market outcome alongside price and quality; (ii) taking account of the chain structure of care home supply and differences between the nursing home and residential care home sectors; (iii) using an econometric approach based on reduced form relationships that treats market concentration as a jointly determined outcome of a complex market. We find that areas susceptible to a high degree of market concentration tend to have greatly restricted supply of care home places and (to a lesser extent) a higher average public cost, than areas susceptible to low degree of market concentration. There is no significant evidence that conditions favoring high market concentration affect average care home quality.

Moving organizational theory in health care forward: A discussion with suggestions for critical advancements

In May 2019, scholars in management and organization of health care organizations and systems met. The opening plenary was a moderated discussion with five distinguished scholars who have exemplified pushing the frontier of organizational theory and practice throughout their careers: Ann Barry Flood of Dartmouth College, John Kimberly of the University of Pennsylvania, Anthony (Tony) Kovner of New York University, Stephen (Steve) Shortell of University of California at Berkeley, and Jacqueline (Jackie) Zinn of Temple University. The discussion was moderated by Ingrid Nembhard of the University of Pennsylvania. The goal of the plenary was to provide an opportunity to hear from senior members of the health care management community how they think about organizational behavior and theory, changes that they have observed, research gaps that they see, and lessons for research and practice that they have learned. This article is the transcript of that plenary discussion. It is shared to capture the intellectual history of the field and help surface the critical advancements still needed in organizational theory and practice in health care. The closing remarks of the panelists summarize recommendations for both practice and scholarship in health care organization management.

Nursing Home Competition, Prices and Quality: A Scoping Review and Policy Lessons

BACKGROUND AND OBJECTIVES

In recent years, countries have increasingly relied on markets to improve efficiency, contain costs, and maintain quality in aged care. Under the right conditions, competition can spur providers to compete by offering better prices and higher quality of services. However, in aged care, market failures can be extensive. Information about prices and quality may not be readily available and search costs can be high. This study undertakes a scoping review on competition in the nursing home sector, with an emphasis on empirical evidence in relation to how competition affects prices and quality of care.

RESEARCH DESIGN AND METHODS

Online databases were used to identify studies published in English language between 1988 and 2020. A total of 50 studies covering nine countries are reviewed.

RESULTS

The review finds conflicting evidence on the relationship between competition and quality. Some studies find greater competition leading to higher quality, others find the opposite. Institutional features such as the presence of binding supply restrictions on nursing homes and public reporting of quality information are important considerations. Most studies find greater competition tends to result in lower prices, although the effect is small.

DISCUSSION AND IMPLICATIONS

The literature offers several key policy lessons, including the relationship between supply restrictions and quality which has implications on whether increasing subsidies can result in higher quality and the importance of price transparency and public reporting of quality.

Determinants of Successful Nursing Home Accreditation

OBJECTIVES

This study examined the factors associated with better accreditation outcomes among nursing homes.

METHOD

A total of 538 nursing homes in Taiwan were included in this study. Measures included accreditation scores, external factors (household income, Herfindahl-Hirschman Index, old-age dependency ratio, population density, and number of older adult households), organizational factors (hospital-based status, chain-affiliated status, occupancy rate, the number of registered nurses or nurse aides per bed, and bed size), and internal factors (accountability, deficiencies, person-centered care, nursing skills, quality control, and integrated care).

RESULTS

Bed size, hospital-based status, accountability, deficiencies, person-centered care, nursing skills, quality control, and integrated care were found to predict accreditation.

CONCLUSION

Among all variables in this study, the quality indicators contributed to the most variation, followed by organizational factors. External environmental factors played a minor role in predicting accreditation. A focus on quality of care would benefit not only the residents of a nursing home but also facilitate its accreditation.

Certificate-Of-Need Regulation and Healthcare Service Quality: Evidence from the Nursing Home Industry

This quantitative study investigates the effect of certificate-of-need (CON) regulation on the quality of care in the nursing home industry. It uses county-level demographic data from the 48 contiguous US states that are extracted from the American Community Survey (ACS) and cover the years 2012, 2013, and 2014. In doing so, it employs a new set of service quality variables captured from a variety of county-level data sources. Instrumental variables results indicate that health survey scores for nursing homes that are computed by healthcare professionals are about 18-24% lower, depending on the type of nursing home under consideration, in states with CON regulation. We also find that the presence of CON regulation leads to a substitution of lower-quality certified nursing assistant care for higher-quality licensed practical nurse care, regardless of the type of nursing home under consideration.

Certificate of need laws: a systematic review and cost-effectiveness analysis

BACKGROUND

Certificate of Need (CON) laws, currently in place in 35 US states, require certain health care providers to obtain a certification of their economic necessity from a state board before opening or undertaking a major expansion. We conduct the first systematic review and cost-effectiveness analysis of these laws.

METHODS

We review 90 articles to summarize the evidence on how certificate of need laws affect regulatory costs, health expenditures, health outcomes, and access to care. We use the findings from the systematic review to conduct a cost-effectiveness analysis of CON.

RESULTS

The literature provides mixed results, on average finding that CON increases health expenditures and overall elderly mortality while reducing heart surgery mortality. Our cost-effectiveness analysis estimates that the costs of CON laws somewhat exceed their benefits, although our estimates are quite uncertain.

CONCLUSIONS

The literature has not yet reached a definitive conclusion on how CON laws affect health expenditures, outcomes, or access to care. While more and higher quality research is needed to reach confident conclusions, our cost-effectiveness analysis based on the existing literature shows that the expected costs of CON exceed its benefits.

Entry regulation and the effect of public reporting: Evidence from Home Health Compare

Economic theory suggests that competition and information are complementary tools for promoting health care quality. The existing empirical literature has documented this effect only in the context of competition among existing firms. Extending this literature, we examine competition driven by the entry of new firms into the home health care industry. In particular, we use the certificate of need (CON) law as a proxy for the entry of firms to avoid potential endogeneity of entry. We find that home health agencies in non-CON states improved quality under public reporting significantly more than agencies in CON states. Because home health care is a labor-intensive and capital-light industry, the state CON law is a major barrier for new firms to enter. Our findings suggest that policymakers may jointly consider information disclosure and entry regulation to achieve better quality in home health care.

The Effects of Chains on the Measurement of Competition in the Nursing Home Industry

Consistently accounting for more than 50% of the nursing homes in the United States, corporate chains have played an important role in the industry for several decades. However, few studies have explicitly considered the role of chains in measuring competition in nursing home markets. In this study, we use a newly developed database tracking common ownership over a period of nearly two decades to compare chain-adjusted and unadjusted measures of competition at the county and 25 km fixed-radius levels and explore how the differences would affect the assessment of local market structure. On average, the chain-adjusted Herfindahl–Hirschman Indexes (HHIs) are about 0.02 higher than the unadjusted HHIs. Each year, about 20% to 22% of the counties would appear more concentrated when recalculating HHIs accounting for common ownership. Evidence suggests that nursing home chains tend to focus more on expanding access to new markets within a state than to increasing market power within a smaller local market.

Smoke without Fire: Nursing Facility Closures in California, 1997–2001

This paper draws from a rich longitudinal California data set to analyze the scope and nature of nursing home closures between 1997 and 2001, and to present a Cox proportionate hazards model of the risks of closure that arise from a range of facility and market characteristics. When compared with the sample total of 1,482 facilities operating in the baseline year of 1997, only 56 facilities closed through 2001, involving the loss of 3.8% of facilities and 2,915 beds (2.3%). The multivariate Cox model of factors associated with closure reports that: 1) hospital-based facilities are 600% more likely to close than are free-standing homes; 2) reducing bed size by one standard deviation (52 beds) increases the risk of closure by 460%; 3) facilities with losses of 5% or worse are more than twice as likely to close; and 4) a one-standard deviation increase in the spare bed capacity measure of county competition raises the risk of facility closure by 140%.

Market Conditions and Performance in the Nursing Home Compare Five-Star Rating

Previous studies have documented that market conditions affect nursing home performance; however, the evidence is inconsistent and conflicting. This study introduces three groups of county market conditions and a peer effect variable, and tests their impacts on the Nursing Home Compare (NHC) Five-Star overall rating. Indiana nursing home data and county characteristics are taken mainly from the NHC and Census Bureau websites. The result of the ordered logistic regression analysis indicates that nursing homes in excess demand markets, namely those that are highly concentrated and have fewer nursing homes, tend to perform better than their counterparts in both excess supply and balanced markets. In addition, a peer effect variable, measured as the average overall rating of the competitors, promotes performance improvement. These findings imply that small markets enable consumers to be well informed about a provider's reputation for quality, consequently enhancing performance. Furthermore, not only consumers but also providers seem to seek performance information on the report card to understand their relative position in the market, which thus affects their market strategies and subsequently performance.

Competition, information, and quality: Evidence from nursing homes

Economic theory suggests that competition and information can both be important for product quality, and yet evidence on how they may interact to affect quality is sparse. This paper estimates the impact of competition between nursing homes on their quality, and how this impact varies when consumers have better access to information. The effect of competition is identified using exogenous variation in the geographical proximity of nursing homes to their potential consumers. The change in information transparency is captured by the launch of the Five-Star Quality Rating System in 2009, which improved access to the quality information of nursing homes. We find that while the effect of competition on nursing home quality is generally rather limited, this effect becomes significantly stronger with increased information transparency. The results suggest that regulations on public quality reporting and on market structure are policy complements, and should be considered jointly to best improve quality.

Discretionary Hospitalization of Nursing Home Residents With and Without Alzheimer’s Disease

This study analyzes facility variations in hospital admission rates of nursing home (NH) residents with and without Alzheimer’s disease (AD) or related dementia with the aim of better understanding how facility-level contextual factors differentially affect hospitalization risks. Method: The sample population consists of 19,217 and 18,399 Medicaid residents with and without AD, respectively, from 546 NHs in Massachusetts between 1991 and 1993. Hospital use is measured as annual nonpsychiatric discretionary hospital admissions to short-term general hospitals. Multilevel estimation methods are used to obtain facility and market area parameter estimates. Results: There was greater interfacility variation in discretionary hospital admission rates of AD residents than residents without AD, particularly among more vulnerable subgroups of AD residents. Discussion: The findings underscore the importance of licensed nursing personnel in reducing discretionary hospitalizations among NH residents with AD.

Family Satisfaction With Residential Care Provision: A Multilevel Analysis

The goal of this study was to assess the impact of staff commitment on outcomes of quality of care in residential care facilities in a sample of 260 family members of residents and 206 direct care staff from 24 residential care/assisted living (RC/AL) homes in Kansas. Quality of care was measured as family satisfaction, and individual- and facility-level predictors were used in the model. The significant predictors of family satisfaction were the family member’s age and relationship to elder. The findings suggest that both of these variables are tied to beliefs that family members have about their own responsibility for care, which may in turn influence their satisfaction with care. This hypothesis deserves further attention in future research. Also, the failure of this study to affirm an expected relationship between staff commitment and family satisfaction should prompt further research related to staff commitment and family satisfaction.

Variations in Outcomes of Care in Urban and Rural Nursing Facilities in Maine

Federal and state regulators and the nursing home industry have accelerated efforts to improve care practices in response to the Institute of Medicine's 1986 report on the quality of nursing home care and the federal Nursing Home Reform Act of 1987 (OBRA 1987). Very little is known about the quality of care in rural nursing facilities compared to their urban counterparts. This study describes variations in facility and resident characteristics of urban and rural nursing facilities in Maine and examines differences in outcomes of care. The study estimates rural-urban differences in 11 quality indicators (measured at the facility level) controlling for resident, facility, and market characteristics and other factors that may affect quality. Results reveal few significant differences between rural and urban nursing facilities. Further research is needed to understand whether differences in the characteristics of rural and urban facilities not measured in this study may affect nursing facility quality.

The Impact of Certificate-of-Need Laws on Nursing Home and Home Health Care Expenditures

Over the past two decades, nursing homes and home health care agencies have been influenced by several Medicare and Medicaid policy changes including the adoption of prospective payment for Medicare-paid postacute care and Medicaid-paid long-term home and community-based care reforms. This article examines how spending growth in these sectors was affected by state certificate-of-need (CON) laws, which were designed to limit the growth of providers and have remained unchanged for several decades. Compared with states without CON laws, Medicare and Medicaid spending in states with CON laws grew faster for nursing home care and more slowly for home health care. In particular, we observed the slowest growth in community-based care in states with CON for both the nursing home and home health industries. Thus, controlling for other factors, public postacute and long-term care expenditures in CON states have become dominated by nursing homes.

Medicare and Medicaid Reimbursement Rates for Nursing Homes Motivate Select Culture Change Practices But Not Comprehensive Culture Change

Components of nursing home (NH) culture change include resident-centeredness, empowerment, and home likeness, but practices reflective of these components may be found in both traditional and "culture change" NHs. We use mixed methods to examine the presence of culture change practices in the context of an NH's payer sources. Qualitative data show how higher pay from Medicare versus Medicaid influences implementation of select culture change practices, and quantitative data show NHs with higher proportions of Medicare residents have significantly higher (measured) environmental culture change implementation. Findings indicate that heightened coordination of Medicare and Medicaid could influence NH implementation of reform practices.

Higher Medicare SNF care utilization by dual-eligible beneficiaries: can Medicaid long-term care policies be the answer?

OBJECTIVE

To examine outcomes associated with dual eligibility (Medicare and Medicaid) of patients who are admitted to skilled nursing facility (SNF) care and whether differences in outcomes are related to states' Medicaid long-term care policies.

DATA SOURCES/COLLECTION

We used national Medicare enrollment data and claims, and the Minimum Data Set for 890,922 community-residing Medicare fee-for-service beneficiaries who were discharged to an SNF from a general hospital between July 2008 and June 2009.

STUDY DESIGN

We estimated the effect of dual eligibility on the likelihood of 30-day rehospitalization, becoming a long-stay nursing home resident, and 180-day survival while controlling for clinical, demographic, socio-economic, residential neighborhood characteristics, and SNF-fixed effects. We estimated the differences in outcomes by dual eligibility status separately for each state and showed their relationship with state policies: the average Medicaid payment rate; presence of nursing home certificate-of-need (CON) laws; and Medicaid home and community-based services (HCBS) spending.

PRINCIPAL FINDINGS

Dual-eligible patients are equally likely to experience 30-day rehospitalization, 12 percentage points more likely to become long-stay residents, and 2 percentage points more likely to survive 180 days compared to Medicare-only patients. This longer survival can be attributed to longer nursing home length of stay. While higher HCBS spending reduces the length-of-stay gap without affecting the survival gap, presence of CON laws reduces both the length-of-stay and survival gaps.

CONCLUSIONS

Dual eligibles utilize more SNF care and experience higher survival rates than comparable Medicare-only patients. Higher HCBS spending may reduce the longer SNF length of stay of dual eligibles without increasing mortality and may save money for both Medicare and Medicaid.

The impact of competition on quality and prices in the English care homes market

This study assesses the impact of competition on quality and price in the English care/nursing homes market. Considering the key institutional features, we use a theoretical model to assess the conditions under which further competition could increase or reduce quality. A dataset comprising the population of 10,000 care homes was used. We constructed distance/travel-time weighted competition measures. Instrumental variable estimations, used to account for the endogeneity of competition, showed quality and price were reduced by greater competition. Further analyses suggested that the negative quality effect worked through the effect on price - higher competition reduces revenue which pushes down quality.

The Economics of Long-Term Care

Long-term care expenditure is expected to rise, driven by an ageing population. Given that public long-term care expenditure is high in many OECD countries, governments are increasingly concerned about its future growth. This study focuses on three relevant issues. First, we discuss factors that affect the growth of long-term expenditure and its projections. These include demographics, the balance in provision between informal and formal care, whether higher life expectancy translates into higher disability, the interrelation between health and long-term care, and whether long-term care suffers from Baumol’s disease. Second, given that a significant proportion of long-term care expenditure is nursing- and care-home expenditure, we discuss the role of government regulation aimed at ensuring that individuals receive appropriate quality of care in such institutions. We focus in particular on price regulation, competition, and the non-profit sector; these have been the subject of considerable empirical work (mainly in the United States). Third, we discuss the relative merits of public and private insurance. Countries differ greatly in their approach. Some countries have nearly exclusively public insurance but in others this is small. We consider the conditions under which public insurance can overcome the limitations of a private insurance market.

Nursing home prices and market structure: the effect of assisted living industry expansion

Since the 1990s, there has been substantial expansion of facility-based alternatives to nursing home care, such as assisted living facilities. This paper analyzes the relationship between expansion of the assisted living industry, nursing home market structure and nursing home private pay prices using a two-year panel of nursing homes in the State of Ohio. Fixed effect regressions suggest that the expansion of assisted living facilities are associated with increased nursing home concentration, but find no effect on private pay nursing home prices. This would be consistent with assisted livings reducing demand for nursing homes by delaying entry into a nursing home, though assisted livings are not direct competitors of nursing homes.

Making difficult decisions: the role of quality of care in choosing a nursing home

OBJECTIVES

We investigated how quality of care affects choosing a nursing home.

METHODS

We examined nursing home choice in California, Ohio, New York, and Texas in 2001, a period before the federal Nursing Home Compare report card was published. Thus, consumers were less able to observe clinical quality or clinical quality was masked. We modeled nursing home choice by estimating a conditional multinomial logit model.

RESULTS

In all states, consumers were more likely to choose nursing homes of high hotel services quality but not clinical care quality. Nursing home choice was also significantly associated with shorter distance from prior residence, not-for-profit status, and larger facility size.

CONCLUSIONS

In the absence of quality report cards, consumers choose a nursing home on the basis of the quality dimensions that are easy for them to observe, evaluate, and apply to their situation. Future research should focus on identifying the quality information that offers the most value added to consumers.

Antipsychotic use in nursing home residents admitted with hip fracture

OBJECTIVES

To evaluate the association between receiving antipsychotics and the outcomes of a cohort of nursing home (NH) residents with and without presumed delirium after hip fracture.

DESIGN

Population-based cohort study.

SETTING

Eleven thousand one hundred nineteen nursing homes nationwide from January 1, 2000, to December 31, 2007.

PARTICIPANTS

First-time NH admissions with hip fracture (n = 77,759).

MEASUREMENTS

The Nursing Home Confusion Assessment Method was used to identify residents with no delirium, subsyndromal delirium, and full delirium. Propensity score reweighting was used, with analyses stratified according to delirium level.

RESULTS

In subjects with no delirium symptoms, approximately 5% (n = 3,250) received antipsychotic drugs. These individuals were less likely to be discharged home (odds ratio (OR) = 0.68, P < .001), had a higher likelihood of death before nursing home discharge (OR = 1.28, P = .03), stayed in nursing homes longer (β 2.83, P = .05), and had less functional improvement at discharge (β -0.47, P = .03). Receipt of antipsychotics in participants with mild delirium was associated with a lower likelihood of discharge home (OR = 0.74, P = .03).

CONCLUSION

In NH residents with hip fracture and no delirium symptoms, use of antipsychotics was associated with worse outcomes, with the exception of rehospitalization. No clear benefits were associated with antipsychotic use for those with presumed delirium.

The impact of hospital-based skilled nursing facility closures on rehospitalizations

OBJECTIVE

To examine the effect of reductions in hospital-based (HB) skilled nursing facility (SNF) bed supply on the rate of rehospitalization of patients discharged to any SNF from zip codes that lost HB beds.

DATA SOURCE

We used Medicare enrollment records, Medicare hospital and SNF claims, and nursing home Minimum Dataset assessments and characteristics (OSCAR) to examine nearly 10 million Medicare fee-for-service hospital discharges to SNFs between 1999 and 2006.

STUDY DESIGN

We calculated the number of HB and freestanding (FS) SNF beds within a 22 km radius from the centroid of all zip codes in which Medicare beneficiaries reside in all years. We examined the relationship between HB and FS bed supply and the rehospitalization rates of the patients residing in corresponding zip codes in different years using zip code fixed effects and instrumental variable methods including extensive sensitivity analyses.

PRINCIPAL FINDINGS

Our estimated coefficients suggest that closure of 882 HB homes during our study period resulted in 12,000-18,000 extra rehospitalizations within 30 days of discharge. The effect was largely concentrated among the most acutely ill, high-need patients.

CONCLUSIONS

SNF patient-based prospective payment resulted in closure of higher cost HB facilities that had served most postacute patients. As other, less experienced SNFs replaced HB facilities, they were less able to manage high acuity patients without rehospitalizing them.

Geographic Market Definition: The Case of Medicare-Reimbursed Skilled Nursing Facility Care

Correct geographic market definition is important to study the impact of competition. In the nursing home industry, most studies use geopolitical boundaries to define markets. This paper uses the Minimum Data Set to generate an alternative market definition based on patient flows for Medicare skilled nursing facilities. These distances are regressed against a range of nursing home and area characteristics to determine what influences market size. We compared Herfindahl-Hirschman Indices based on county and resident-flow measures of geographic market definition. Evidence from this comparison suggests that using the county for the market definition is not appropriate across all states.

Physical restraint use and falls in nursing homes: a comparison between residents with and without dementia

AIMS

To estimate the use of different types of physical restraints and assess their associations to falls and injuries among residents with and without Alzheimer's disease (AD) or dementia in US nursing homes.

METHODS

Data were from the 2004 National Nursing Home Survey. AD or dementia was identified using International Classification of Diseases, Ninth Revision (ICD-9) codes. Analyses were conducted with the Surveyfreq and Surveylogistic procedures in SAS v.9.1.

RESULTS

Residents with either AD or dementia were more likely to be physically restrained (9.99% vs 3.91%, P < .001) and less likely to have bed rails (35.06% vs 38.43%, P < .001) than those residents without the disease. The use of trunk restraints was associated with higher risk for falls (adjusted odds ratio [AOR] = 1.66, P < .001) and fractures (AOR = 2.77, P < .01) among residents with the disease. The use of full bed rails was associated with lower risk for falls among residents with and without the disease (AOR = 0.67 and AOR = 0.72, Ps < .05, respectively).

CONCLUSIONS

The use of a trunk restraint is associated with a higher risk for falls and fractures among residents with either AD or dementia.

Effects of competition on the cost and quality of inpatient rehabilitation care under prospective payment

OBJECTIVE

To determine the effect of competition in postacute care (PAC) markets on resource intensity and outcomes of care in inpatient rehabilitation facilities (IRFs) after prospective payment was implemented.

DATA SOURCES

Medicare claims, Provider of Services file, Enrollment file, Area Resource file, Minimum Data Set.

STUDY DESIGN

We created an exogenous measure of competition based on patient travel distances and used instrumental variables models to estimate the effect of competition on inpatient rehabilitation costs, length of stay, and death or institutionalization.

DATA EXTRACTION METHODS

A file was constructed linking data for Medicare patients discharged from acute care between 2002 and 2003 and admitted to an IRF with a diagnosis of hip fracture or stroke.

PRINCIPAL FINDINGS

Competition had different effects on treatment intensity and outcomes for hip fracture and stroke patients. In the treatment of hip fracture, competition increased costs and length of stay, while increasing rates of death or institutionalization. In the treatment of stroke, competition decreased costs and length of stay and produced inferior outcomes.

CONCLUSIONS

The effects of competition in PAC markets may vary by condition. It is important to study the effects of competition by diagnostic condition and to study the effects across populations that vary in severity. Our finding that higher competition under prospective payment led to worse IRF outcomes raises concerns and calls for additional research.

Staffing levels in rural nursing homes: a mixed methods approach

This mixed methods study used multiple regression analyses to examine the impact of organizational and market characteristics on staffing hours and staffing mix, and qualitative interview to explore the challenges and facilitators of recruiting and retaining qualified staff. Rural nursing homes (NHs) certified by Medicare or Medicaid (N = 161) were sampled from the Online Survey Certification and Reporting system. A subsample (n = 23) was selected purposively for the qualitative analysis. Smaller NHs or government-affiliated homes had more total nursing hours per resident day and more hours of care by certified nursing assistants and RNs than larger and nongovernment-affiliated homes; however, almost 87% of NHs in this study were below the national recommendation for RN hours. Informants voiced challenges related to enough staff, qualified staff, and training staff. Development of nursing resources is critical, especially in rural locales where aging resources may not be well developed.

Organizational characteristics and cancer care for nursing home residents

OBJECTIVE

We evaluate whether organization, market, policy, and resident characteristics are related to cancer care processes and outcomes for dually eligible residents of Michigan nursing homes who entered facilities without a cancer diagnosis but subsequently developed the disease. DATA SOURCES/STUDY DESIGN/DATA COLLECTION: Using data from the Michigan Tumor Registry (1997-2000), Medicare claims, Medicaid cost reports, and the Area Resource File, we estimate logistic regression models of diagnosis at or during the month of death and receipt of pain medication during the month of or month after diagnosis.

PRINCIPAL FINDINGS

Approximately 25 percent of the residents were diagnosed at or near death. Only 61 percent of residents diagnosed with late or unstaged cancer received pain medication during the diagnosis month or the following month. Residents in nursing homes with lower staffing and in counties with fewer hospital beds were more likely to be diagnosed at death. After the Balanced Budget Act (BBA), residents were more likely to be diagnosed at death.

CONCLUSIONS

Nursing home characteristics and community resources are significantly related to the cancer care residents receive. The BBA was associated with an increased likelihood of later diagnosis of cancer.

Relationship between state medicaid policies, nursing home racial composition, and the risk of hospitalization for black and white residents

OBJECTIVE

To examine racial differences in the risk of hospitalization for nursing home (NH) residents.

DATA SOURCES

National NH Minimum Data Set, Medicare claims, and Online Survey Certification and Reporting data from 2000 were merged with independently collected Medicaid policy data.

STUDY DESIGN

One hundred and fifty day follow-up of 516,082 long-stay residents.

PRINCIPLE FINDINGS

18.5 percent of white and 24.1 percent of black residents were hospitalized. Residents in NHs with high concentrations of blacks had 20 percent higher odds (95 percent confidence interval [CI]=1.15-1.25) of hospitalization than residents in NHs with no blacks. Ten-dollar increments in Medicaid rates reduced the odds of hospitalization by 4 percent (95 percent CI=0.93-1.00) for white residents and 22 percent (95 percent CI=0.69-0.87) for black residents.

CONCLUSIONS

Our findings illustrate the effect of contextual forces on racial disparities in NH care.

The market for long-term care services

Although a large literature has established the importance of market and regulatory forces within the long-term care sector, current research in this field is limited by a series of data, measurement, and methodological issues. This paper provides a comprehensive review of these issues with an emphasis on identifying initiatives that will increase the volume and quality of long-term care research. Recommendations include: the construction of standard measures of long-term care market boundaries, the broader dissemination of market and regulatory data, the linkage of survey-based data with market measures, the encouragement of further market-based studies of noninstitutional long-term care settings, and the standardization of Medicaid cost data.

Hospitalization of nursing home residents: the effects of states' Medicaid payment and bed-hold policies

OBJECTIVE

Hospitalizations of nursing home residents are costly and expose residents to iatrogenic disease and social and psychological harm. Economic constraints imposed by payers of care, predominantly Medicaid policies, are hypothesized to impact hospitalizations.

DATA SOURCES/STUDY SETTING

Federally mandated resident assessments were merged with Medicare claims and eligibility files to determine hospitalizations and death within 150 days of baseline assessment. Nursing home and market characteristics were obtained from the Online Survey Certification and Reporting, and the Area Resource File, respectively. States' average daily Medicaid nursing home payments and bed-hold policies were obtained independently.

STUDY DESIGN

Prospective cohort study of 570,614 older (> or =65-year-old), non-MCO (Medicare Managed Care), long-stay (> or =90 days) residents in 8,997 urban, freestanding nursing homes assessed between April and June 2000, using multilevel models to test the impact of state policies on hospitalizations controlling for resident, nursing home, and market characteristics.

PRINCIPAL FINDINGS

Overall, 99,379 (17.4 percent) residents were hospitalized with rates varying from 8.4 percent in Utah to 24.9 percent in Louisiana. Higher Medicaid per diem was associated with lower odds of hospitalizations (5 percent lower for each $10 above average $103.5, confidence intervals [CI] 0.91-0.99). Hospitalization odds were higher by 36 percent in states with bed-hold policies (CI: 1.12-1.63).

CONCLUSIONS

State Medicaid bed-hold policy and per-diem payment have important implications for nursing home hospitalizations, which are predominantly financed by Medicare. This study emphasizes the importance of properly aligning state Medicaid and federal Medicare policies in regards to the subsidy of acute, maintenance, and preventive care in the nursing home setting.

Hospitalization of Nursing Home Residents With Cognitive Impairments: The Influence of Organizational Features and State Policies

PURPOSE

The purpose of this study was to quantify the effect of specific nursing home features and state Medicaid policies on the risk of hospitalization among cognitively impaired nursing home residents.

DESIGN AND METHODS

We used multilevel logistic regression to estimate the odds of hospitalization among long-stay (>90 days) nursing home residents against the odds of remaining in the nursing home over a 5-month period, controlling for covariates at the resident, nursing home, and county level. We stratified analyses by resident diagnosis of dementia.

RESULTS

Of 359,474 cognitively impaired residents, 49% had a diagnosis of dementia. Of those, 16% were hospitalized. The probability of hospitalization was negatively associated with the presence of a dementia special care unit (adjusted odds ratio [AOR] = 0.90, 95% confidence interval [CI] = 0.86-0.94) and with a high prevalence of dementia in the nursing home (AOR = 0.96, 95% CI = 0.88-1.03). Higher Medicaid payment rates were associated with reduced likelihood of hospitalization (AOR = 0.95, 95% CI = 0.90-1.00), whereas any bed-hold policy substantially increased that likelihood (AOR = 1.44, 95% CI = 1.12-1.86). We observed similar results for residents without a dementia diagnosis.

IMPLICATIONS

Directed management of chronic conditions, as indicated by facilities' investment in special care units, reduces the risk of hospitalization, but the effect of bed-hold policies illustrates how fragmentation in the financing system impedes these efforts.

Hospitalization of nursing home residents: the effects of states' Medicaid payment and bed-hold policies

OBJECTIVE

Hospitalizations of nursing home residents are costly and expose residents to iatrogenic disease and social and psychological harm. Economic constraints imposed by payers of care, predominantly Medicaid policies, are hypothesized to impact hospitalizations.

DATA SOURCES/STUDY SETTING

Federally mandated resident assessments were merged with Medicare claims and eligibility files to determine hospitalizations and death within 150 days of baseline assessment. Nursing home and market characteristics were obtained from the Online Survey Certification and Reporting, and the Area Resource File, respectively. States' average daily Medicaid nursing home payments and bed-hold policies were obtained independently.

STUDY DESIGN

Prospective cohort study of 570,614 older (> or =65-year-old), non-MCO (Medicare Managed Care), long-stay (> or =90 days) residents in 8,997 urban, freestanding nursing homes assessed between April and June 2000, using multilevel models to test the impact of state policies on hospitalizations controlling for resident, nursing home, and market characteristics.

PRINCIPAL FINDINGS

Overall, 99,379 (17.4 percent) residents were hospitalized with rates varying from 8.4 percent in Utah to 24.9 percent in Louisiana. Higher Medicaid per diem was associated with lower odds of hospitalizations (5 percent lower for each $10 above average $103.5, confidence intervals [CI] 0.91-0.99). Hospitalization odds were higher by 36 percent in states with bed-hold policies (CI: 1.12-1.63).

CONCLUSIONS

State Medicaid bed-hold policy and per-diem payment have important implications for nursing home hospitalizations, which are predominantly financed by Medicare. This study emphasizes the importance of properly aligning state Medicaid and federal Medicare policies in regards to the subsidy of acute, maintenance, and preventive care in the nursing home setting.

Effect of staff turnover on staffing: A closer look at registered nurses, licensed vocational nurses, and certified nursing assistants

PURPOSE

We examined the effects of facility and market-level characteristics on staffing levels and turnover rates for direct care staff, and we examined the effect of staff turnover on staffing levels.

DESIGN AND METHODS

We analyzed cross-sectional data from 1,014 Texas nursing homes. Data were from the 2002 Texas Nursing Facility Medicaid Cost Report and the Area Resource File for 2003. After examining factors associated with staff turnover, we tested the significance and impact of staff turnover on staffing levels for registered nurses (RNs), licensed vocational nurses (LVNs) and certified nursing assistants (CNAs).

RESULTS

All three staff types showed strong dependency on resources, such as reimbursement rates and facility payor mix. The ratio of contracted to employed nursing staff as well as RN turnover increased LVN turnover rates. CNA turnover was reduced by higher administrative expenditures and higher CNA wages. Turnover rates significantly reduced staffing levels for RNs and CNAs. LVN staffing levels were not affected by LVN turnover but were influenced by market factors such as availability of LVNs in the county and women in the labor force.

IMPLICATIONS

Staffing levels are not always associated with staff turnover. We conclude that staff turnover is a predictor of RN and CNA staffing levels but that LVN staffing levels are associated with market factors rather than turnover. Therefore, it is important to focus on management initiatives that help reduce CNA and RN turnover and ultimately result in higher nurse staffing levels in nursing homes.

Nurse staffing levels and Medicaid reimbursement rates in nursing facilities

OBJECTIVE

To examine the relationship between nursing staffing levels in U.S. nursing homes and state Medicaid reimbursement rates.

DATA SOURCES

Facility staffing, characteristics, and case-mix data were from the federal On-Line Survey Certification and Reporting (OSCAR) system and other data were from public sources.

STUDY DESIGN

Ordinary least squares and two-stage least squares regression analyses were used to separately examine the relationship between registered nurse (RN) and total nursing hours in all U.S. nursing homes in 2002, with two endogenous variables: Medicaid reimbursement rates and resident case mix.

PRINCIPAL FINDINGS

RN hours and total nursing hours were endogenous with Medicaid reimbursement rates and resident case mix. As expected, Medicaid nursing home reimbursement rates were positively related to both RN and total nursing hours. Resident case mix was a positive predictor of RN hours and a negative predictor of total nursing hours. Higher state minimum RN staffing standards was a positive predictor of RN and total nursing hours while for-profit facilities and the percent of Medicaid residents were negative predictors.

CONCLUSIONS

To increase staffing levels, average Medicaid reimbursement rates would need to be substantially increased while higher state minimum RN staffing standards is a stronger positive predictor of RN and total nursing hours.

Risk factors associated with the occurrence of fractures in U.S. nursing homes: resident and facility characteristics and prescription medications

OBJECTIVES

To determine whether resident and facility characteristics and prescription medications influence the occurrence of fractures in nursing homes (NHs).

DESIGN

Panel study with 1-year follow-up.

SETTING

A nationally representative sample of NHs from the Medical Expenditure Panel Survey (MEPS).

PARTICIPANTS

Residents aged 65 and older who were in sample NHs on January 1, 1996.

MEASUREMENTS

Health status measures were collected from facility records and abstracted using a computer-assisted personal interview instrument. Fracture and drug data were updated every 4 months to provide a full year of information. Drug data were obtained from monthly medication administration records. The occurrences of fractures were obtained from medical records. Administered medications were classified using the Department of Veterans Affairs medication classification system. Facility characteristics were based on MEPS survey data collected from NH sources.

RESULTS

In 1996, 6% of residents in a NH at the beginning of the year experienced a fracture during their NH stay(s). Resident risk factors included aged 85 and older, admitted from the community, exhibited agitated behaviors, and used both wheelchair and cane or walker. Use of anticonvulsants, antidepressants, opioid analgesics, iron supplements, bisphosphonates, thiazides, and laxatives were associated with fractures. A high certified nurse aide ratio was negatively associated with fractures.

CONCLUSION

The findings indicate that fractures are associated with resident and facility characteristics and prescribing practices. It reaffirms the importance of medication review with special attention on opioid analgesics, antidepressants, and anticonvulsants to reduce the risk of fractures.

Chain Reaction

This paper reports on an exploratory study of nursing home bankruptcy. From state and industry data regarding nearly 1,000 California facilities, it was possible to identify 155 homes in five chains (multi-facility organizations) that were operating in bankruptcy in 2000. When compared with facilities in non-bankrupt chains, while the bankrupt chain facilities had significantly worse financial liquidity, higher administrative costs, and higher payables to related parties, they also had more Medicare residents, fewer Medicaid residents, better solvency, and were located in less competitive county markets and in areas with higher Medicaid reimbursement rates. These findings indicate that, rather than facility characteristics and local market factors, strategic decisions taken at the corporate (chain) level are the major determinants of nursing facility bankruptcy status.

Vulnerable populations at risk of potentially avoidable hospitalizations: the case of nursing home residents with Alzheimer's disease

This study explores whether nursing home residents with Alzheimer's disease and related dementias (ADRD) are affected differently by facility-level risk factors of ambulatory care-sensitive (ACS) conditions, a measure of timely access to medical care. Three years of quarterly Medicaid reimbursement data from over 525 Massachusetts nursing homes were linked with four years of Medical Provider Analysis and Review hospital claims data and facility-level attribute data to investigate whether facility effects differed by resident ADRD status. The findings suggest that nursing home residents with ADRD are more likely to be hospitalized for certain ACS conditions, including gastroenteritis and kidney/ urinary tract infections. Availability of increased registered nurse staffing levels and on-site nurse practitioners appears to attenuate this risk. Although findings suggest that ACS hospitalization measures may represent a useful approach to monitoring nursing home care, additional effort is needed to understand the extent to which severity of illness and/or comorbidities affect the measurement of these hospitalizations.

The Employment of Nurse Practitioners and Physician Assistants in U.S. Nursing Homes

PURPOSE

Nursing facilities with nurse practitioners or physician assistants (NPs or PAs) have been reported to provide better care to residents. Assuming that freestanding nursing homes in urban areas that employ these professionals are making an investment in medical infrastructure, we test the hypotheses that facilities in states with higher Medicaid rates, and those in more competitive markets and markets with higher managed care penetration, are more likely to employ NPs or PAs.

DESIGN AND METHODS

The Online Survey Certification and Reporting System (OSCAR) database, Area Resource File, and information from surveys of state policies from 1993 to 2002 are used to study the employment of NPs or PAs, using a cross-sectional time-series generalized estimating equation model with surveys nested within facilities, testing several market and state-policy effects while controlling for facility and market characteristics.

RESULTS

Throughout the 1990s the proportion of nursing facilities with NPs or PAs doubled, from less than 10% to over 20%. Facilities in states in the upper quartile of Medicaid reimbursement rates were 10% more likely to employ NPs or PAs. Facilities in more competitive markets, and in markets with higher managed care penetration, were more likely to employ NPs or PAs (adjusted odds ratio = 1.27, 1.20 respectively).

IMPLICATIONS

More generous state Medicaid nursing home reimbursement and higher competition may advance the investment in medical infrastructure, which in turn may positively affect the quality of care provided to nursing home residents.

Physician and nurse staffing in nursing homes: The role and limitations of the Online Survey Certification and Reporting (OSCAR) system

OBJECTIVES

To assess nursing home staffing data reported in the Online Survey Certification and Reporting (OSCAR) system database for research and policy.

DESIGN

Comparisons were made between OSCAR and a concurrent research survey of staffing data collected for the same facilities, using inter-rater agreement and correlation analyses.

SETTING

Freestanding nursing homes from New York State (NYS) in 1997 (N = 327).

MEASUREMENTS

Selected staffing variables were defined in comparable terms in both OSCAR and the NYS survey.

RESULTS

The two data sources were in substantial agreement on the reported availability of a full-time physician (other than medical director) and of a physician assistant or nurse practitioner (Kappa >0.7), and they correlated well in the full-time equivalent (FTE) number of such staff (Spearman correlation >0.6). The correlation was 0.8 for FTE registered nurses (RNs), 0.7 for licensed practical nurses (LPNs), and 0.8 for certified nurse aides (CNAs). In terms of average nurse hours per patient day, separately for RNs, LPNs, CNAs, and all combined, the correlation was relatively weak (between 0.3 and 0.6). Overall staffing levels tended to be lower in OSCAR than in NYS.

CONCLUSION

The OSCAR data are useful for exploring relationships between staffing and various quality of care outcomes, but may not be accurate enough on a case-specific basis, or to determine policy regarding minimal staffing levels using average nurse hours per patient day measures. More systematic and timely efforts are needed to refine the OSCAR content and survey methodology to document nursing home staffing information.

Minimizing the use of restrictive devices in dementia patients at risk for falling

The accumulating empirical evidence demonstrates that restrictive devices can be removed without negative consequences. Most importantly, use of nonrestrictive measures has been correlated with positive patient outcomes and represents care that is dignified and safe for confused elders. Most of these nonrestrictive approaches promote mobility and functional recovery; however, testing of individual interventions is needed to further the science. As the research regarding restrictive devices has been translated into professional guidelines and regulatory standards, the prevalence of usage has declined dramatically. New institutional models of care discouraging routine use of restrictive devices also will foster innovative solutions to clinical problems associated with dementia.

Examining Differences in Death Rates for Medicaid and Non-Medicaid Nursing Home Residents

OBJECTIVES

The purpose of this work was to examine differences in the probability of death for Medicaid and privately funded nursing home residents, controlling for differences in facility, market, and resident characteristics.

METHODS

Given that Medicaid residents are more likely to die in nursing facilities, the probability of dying within 1 or 2 years is estimated using a series of probit models, controlling for whether a resident is Medicaid-funded or privately-funded. As resident characteristics, market attributes, facility characteristics, and facility fixed effects are sequentially added to the specifications, the gap in the probability of death between Medicaid and private-pay residents is considered.

RESULTS

The overall mortality rate for Medicaid residents was 14.8% points higher than the death rate for privately funded residents. When considering death within 1 year and 2 years, Medicaid resident death rates were 4.2% and 7.8% higher, respectively. The apparent difference in mortality declines as one controls for resident, market, and facility characteristics. Both facility characteristics and facility fixed effects are relatively important in explaining differences in death rates between Medicaid and private-pay residents.

CONCLUSIONS

Differences in death rates between Medicaid and private-pay residents are relatively small, suggesting that residents with different payment sources are not treated differently in nursing homes in ways that impact the probability of death. However, policymakers may want to look more closely at whether Medicaid residents are segregated into lower-quality facilities.

Nursing Home Characteristics and Potentially Preventable Hospitalizations of Long-Stay Residents

OBJECTIVES

To examine the association between having a nurse practitioner/physician assistant (NP/PA) on staff, other nursing home (NH) characteristics, and the rate of potentially preventable/avoidable hospitalizations of long-stay residents, as defined using a list of ambulatory care-sensitive (ACS) diagnoses.

DESIGN

Cross-sectional prospective study using Minimum Data Set (MDS) assessments, Centers for Medicare and Medicaid Services inpatient claims and eligibility records, On-line Survey Certification Automated Records, (OSCAR) and Area Resource File (ARP).

SETTING

Freestanding urban NHs in Maine, Kansas, New York, and South Dakota.

PARTICIPANTS

Residents of 663 facilities with a quarterly or annual MDS assessment in the 2nd quarter of 1997, who had a prior MDS assessment at least 160 days before, and who were not health maintenance organization members throughout 1997 (N=54,631).

MEASUREMENTS

A 180-day multinomial outcome was defined as having any hospitalization with primary ACS diagnosis, otherwise having been hospitalized, otherwise died, and otherwise remained in the facility.

RESULTS

Multilevel models show that facilities with NP/PAs were associated with lower hospitalization rates for ACS conditions (adjusted odds ratio (AOR)=0.83), but not with other hospitalizations. Facilities with more physicians were associated with higher ACS hospitalizations (ACS, AOR=1.14, and non-ACS, AOR=1.10). Facilities providing intravenous therapy, and those that operate a nurses' aide training program were associated with fewer hospitalizations of both types.

CONCLUSION

Employment of NP/PAs in NHs, the provision of intravenous therapy, and the operation of certified nurse assistant training programs appear to reduce ACS hospitalizations, and may be feasible cost-saving policy interventions.

A longitudinal study of Medicaid payment, private-pay price and nursing home quality

Quality of care problems have persisted for decades within U.S. nursing homes. A potential state-level policy towards addressing this concern is the level of Medicaid payment. However, a number of studies have found that an increase in Medicaid payment is associated with lower quality in the presence of certificate-of-need (CON) laws and bed construction moratorium regulations, which serve as barriers to entry within the nursing home industry. Instead of relying on potentially confounded cross-sectional comparisons, this study presents novel, panel-based evidence that incorporates aggregate private-pay price data. These estimates almost uniformly indicate that an increase in the Medicaid payment rate raises nursing home quality. When compared to the earlier literature, these new findings are attributed to changes over time in the market for nursing home care related to the growth in nursing home substitutes.