Competition, information, and quality: Evidence from nursing homes

Assessing the impact of enforcement and compliance with minimum staffing standards on the quality of care in nursing homes: Evidence from the Centers for Medicare and Medicaid Services' staff star rating downgrade policy

Policymakers have historically attempted to influence quality in nursing homes through the imposition of minimum staffing standards and through the public dissemination of quality on websites like Care Compare. One current Federal standard necessitates a registered nurse (RN) on duty for at least eight consecutive hours each day. In 2018, the Centers for Medicare and Medicaid Services announced that they would incentivize compliance with this requirement by downgrading nursing homes with 7+ days without an RN present during the quarter by one star on their Care Compare staffing domain quality rating. This study evaluates the impact of this new enforcement mechanism. Using an intent-to-treat sample of nursing homes at risk for downgrade with difference-in-differences and event study models, it finds that the policy increased compliance and staffing levels. Using the policy to instrument for full compliance, it finds that the daily presence of an RN causally improves several quality dimensions.

The 2021 proposal to increase market forces in the Australian residential aged-care sector

In Australia, the US and Europe, policy makers use markets to incentivise aged care providers to produce greater quality care. The Australian Government announced in 2021 that it would further increase market forces in residential aged care to improve quality. The proposals respond to poor quality found within residential aged care, with overuse of psychotropic medications and physical constraints, social isolation and neglect. This paper outlines the market-orientated reforms the Government seeks to implement, including the policy development pathway over the last two decades. It refers to a theoretical model of provider behaviour under administered prices, and empirical research on the impact of similar market-orientated reforms delivered elsewhere, to highlight the reforms' strengths, weaknesses, and potential market outcomes. This paper concludes by identifying additional reforms that could better incentivise care quality and offers lessons to countries that have sought to marketise their nursing home care sectors.

Impact of an educational program and decision tool on choice of maternity hospital: the delivery decisions randomized clinical trial

Background

Reducing cesarean rates is a public health priority. To help pregnant people select hospitals with lower cesarean rates, numerous organizations publish publically hospital cesarean rate data. Few pregnant people use these data when deciding where to deliver. We sought to determine whether making cesarean rate data more accessible and understandable increases the likelihood of pregnant people selecting low-cesarean rate hospitals.

Methods

We conducted a 1:1 randomized controlled trial in 2019–2021 among users of a fertility and pregnancy mobile application. Eligible participants were trying to conceive for fewer than five months or were 28–104 days into their pregnancies. Of 189,456 participants approached and enrolled, 120,621 participants met entry criteria and were included in analyses. The intervention group was offered an educational program explaining the importance of hospital cesarean rates and an interactive tool presenting hospital cesarean rates as 1-to-5-star ratings. Control group users were offered an educational program about hospital choice and a hospital choice tool without cesarean rate data. The primary outcome was the star rating of the hospital selected by each patient during pregnancy. Secondary outcomes were the importance of cesarean rates in choosing a hospital and delivery method (post-hoc secondary outcome).

Results

Of 120,621 participants (mean [SD] age, 27.8 [7.9]), 12,284 (10.2%) reported their choice of hospital during pregnancy, with similar reporting rates in the intervention and control groups. Intervention group participants selected hospitals with higher star ratings (2.52 vs 2.16; difference, 0.37 [95% CI, 0.32 to 0.43] p < 0.001) and were more likely to believe that the hospitals they chose would impact their chances of having cesarean deliveries (38.5% vs 33.1%, p < 0.001) but did not assign higher priority to cesarean delivery rates when choosing their hospitals (76.2% vs 74.3%, p = 0.05). There was no difference in self-reported cesarean rates between the intervention and control groups (31.4% vs 31.4%, p = 0.98).

Conclusion

People offered an educational program and interactive tool to compare hospital cesarean rates were more likely to use cesarean data in selecting a hospital and selected hospitals with lower cesarean rates but were not less likely to have a cesarean.

Clinical Trial Registration

Registered December 9, 2016 at clinicaltrials.gov, First enrollment November 2019. ID NCT02987803, https://clinicaltrials.gov/ct2/show/NCT02987803

Supplementary Information

The online version contains supplementary material available at 10.1186/s12884-022-05087-y.

Can competition improve hospital quality of care? A difference-in-differences approach to evaluate the effect of increasing quality transparency on hospital quality

Public reporting on the quality of care is intended to guide patients to the provider with the highest quality and to stimulate a fair competition on quality. We apply a difference-in-differences design to test whether hospital quality has improved more in markets that are more competitive after the first public release of performance data in Germany in 2008. Panel data from 947 hospitals from 2006 to 2010 are used. Due to the high complexity of the treatment of stroke patients, we approximate general hospital quality by the 30-day risk-adjusted mortality rate for stroke treatment. Market structure is measured (comparatively) by the Herfindahl-Hirschman index (HHI) and by the number of hospitals in the relevant market. Predicted market shares based on exogenous variables only are used to compute the HHI to allow a causal interpretation of the reform effect. A homogenous positive effect of competition on quality of care is found. This effect is mainly driven by the response of non-profit hospitals that have a narrow range of services and private for-profit hospitals with a medium range of services. The results highlight the relevance of outcome transparency to enhance hospital quality competition.

The Comparison Between Different Hospital Market Definition Approaches: An Empirical Analysis of 11 Representative Diseases in Sichuan Province, China

Objective: This study aims to provide empirical evidence for the controversy about whether the inference is consistent if alternative hospital market definition methods are employed, and for which definition method is the best alternative to the predicted patient flow approach.

Data sources: Collecting data from the discharge data of inpatients and hospital administrative data of Sichuan province in China in the fourth quarter of 2018.

Study Design: We employed Herfindahl–Hirschman Index (HHI) as the proxy of market competition used as an example to measure the hospital market structure. Correlation coefficients of HHIs based on different definition methods were assessed. The corresponding coefficient of each HHI estimated in identical regression models was then compared. In addition, since the predicted patient flow method has been argued by the literature of its advantages compared with the previous approaches, we took the predicted patient flow as a reference to compare with the other approaches.

Data Extraction Methods: We selected the common diseases with a significant burden, and 11 diseases were included (902,767 hospitalizations).

Principal Findings: The correlation coefficients of HHIs based on different market definition methods are all significantly greater than 0, and the coefficients of HHIs are different in identical regression models. Taking the predicted patient flow approach as a reference, we found that the correlation coefficients between HHIs based on fixed radius and predicted patient flow approach is larger than others, and their parameter estimates are all consistent.

Conclusion: Although the HHIs based on different definition methods are significantly and positively correlated, the inferences about the effectiveness of market structure would be inconsistent when alternative market definition methods are employed. The fixed radius would be the best alternative when researchers want to use the predicted patient flow method to define the hospital market but are hindered by the data limitations and computational complexity.

The Impact of Public Reporting Schemes and Market Competition on Hospital Efficiency

In the wake of growing attempts to assess the validity of public reporting, much research has examined the effectiveness of public reporting regarding cost or quality of care. However, relatively little is known about whether transparency through public reporting significantly influences hospital efficiency despite its emerging expectations for providing value-based care. This study aims to identify the dynamics that transparency brought to the healthcare market regarding hospital technical efficiency, taking the role of competition into account. We compare the two public reporting schemes, All-Payer Claims Database (APCD) and Hospital Compare. Employing Data Envelopment Analysis (DEA) and a cross-sectional time-series Tobit regression analysis, we found that APCD is negatively associated with hospital technical efficiency, while hospitals facing less competition responded significantly to increasingly transparent information by enhancing their efficiency relative to hospitals in more competitive markets. We recommend that policymakers take market mechanisms into consideration jointly with the introduction of public reporting schemes in order to produce the best outcomes in healthcare.

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.

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.

Higher hospital referral concentration associated with lower-risk patients in skilled nursing facilities

OBJECTIVE

To examine whether stronger referral relationships between hospitals and skilled nursing facilities (SNF) are associated with lower-risk patients being admitted to SNF.

DATA SOURCES/COLLECTION

We used MedPAR data to estimate referral relationship strength and nursing home survey data (OSCAR and CASPER) to determine the risk of patient admissions at nearly 14 000 SNFs from 2008 to 2014.

STUDY DESIGN

We examined the association of hospital referral concentration with the percentage of higher-risk patients admitted to non-hospital-based (freestanding) SNFs using an instrumental variables approach. We used the distance between patients and SNFs and hospitals and SNFs as the instrument.

DATA COLLECTION/EXTRACTION METHODS

We used previously collected MedPAR and OSCAR/CASPER survey data.

PRINCIPAL FINDINGS

We find greater observed referral concentration among freestanding SNFs is associated with lower percentages of patients with pressure sores (coefficient, -2.64; 95% CI, [-2.82 to -2.46]), catheters (-0.55; [-0.74 to -0.36]), and physical restraints (-0.16; [-0.29 to -0.03]) at admission to a skilled nursing facility.

CONCLUSIONS

We find evidence that freestanding SNFs with stronger hospital referral relationships may be admitting less risky patients, possibly contributing to disparities across SNFs.

[Attitudes to publication of quality testing reports in nursing homes]

BACKGROUND

The Nursing and Living Quality Act (PfleWoqG) regulates the implementation of legally regulated quality inspections and publication of statutory quality inspection reports for residential nursing homes in Bavaria. In the currently valid version, the quality records have to be published but a decision of the higher administrative court (VGH) repealed this rule and it is no longer in force.

OBJECTIVE AND METHODS

Within the framework of a project for the Bavarian State Ministry for Health and Nursing concerning the revision of the publication of legally regulated quality testing reports, appraisals by the institutional management in nursing homes were collated. The E‑survey reached 24% (n = 529) of all residential care homes for elderly people and residential care homes for handicapped people in Bavaria.

RESULTS AND CONCLUSION

Approximately two thirds of the persons questioned attested that the inspections and the resulting reports reflected an appropriate picture of the quality of nursing carried out in the institutions. Nevertheless, the vast majority did not approve of the obligatory publication of the quality testing records. While the inspections were seen as a valuable basis to reflect on the quality of care in the institutions, it was simultaneously argued that the inspections are only snapshots, which could be misinterpreted by the public. It was criticized that the quality testing records were not comprehensible for users. Furthermore, it was commented that the ratings of the responsible authorities were influenced by the competence of the inspectors and their subjective point of view and there was therefore a risk that invalid results would be made public.

Determinants of nursing home choice: Does reported quality matter?

Quality report cards addressing information asymmetry in the health care market have become a popular strategy used by policymakers to improve the quality of care for older people. Using individual level data from the largest German sickness fund merged with institutional level data, we examine the relationship between reported nursing home quality, as measured by recently introduced report cards, nursing home prices, nursing home's location, and the individual choice of nursing homes. Report cards were stepwise introduced as of 2009, and we use a sample of 2010 that includes both homes that had been evaluated at that time and that had not yet been. Thus, we can distinguish between institutions with above and below average ratings as well as nonrated nursing homes. We find that the probability of choosing a nursing home decreases in distance and price. However, we find no economically significant effect of reported quality on individuals' choice of nursing homes.

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.

A National-Level Analysis of the Relationship Between Nursing Home Satisfaction and Quality

Little research has explored the relationship between consumer satisfaction and quality in nursing homes (NHs) beyond the few states mandating satisfaction surveys. We examine this relationship through data from 1,765 NHs in the 50 states and District of Columbia using My InnerView resident or family satisfaction instruments in 2013 and 2014, merged with Certification and Survey Provider Enhanced Reporting, LTCfocus, and NH Compare (NHC) data. Family and resident satisfaction correlated modestly; both correlated weakly and negatively with any quality-of-care (QoC) and any quality-of-life deficiencies and positively with NHC five-star ratings; this latter positive association persisted after covariate adjustment; the negative relationship between QoC deficiencies and family satisfaction also remained. Overall, models explained relatively small proportions of satisfaction variance; correlates of satisfaction varied between residents and families. Findings suggest that satisfaction is a unique dimension of quality and that resident and family satisfaction represent different constructs.

[Critical discussion on the current quality debate on long-term care-a plea for a systemic and empirical insight into the development and measurement of quality in long-term care]

Against the background of the quality debates on long-term care and recurrent reform measures in politics on this topic, a critical discussion on the current state of quality development, testing and reporting in Germany is presented. In Germany, the linear model of Donabedian's structural, process and outcome quality is still used as a basis for quality issues in nursing care; however, international research suggests that multiple and mutually interacting factors influence nursing quality and that a more systematic and systemic perspective for the further development of nursing quality (especially of features, criteria and indicators of nursing quality) appears more appropriate. This article intends to open the perspective of the development, measurement and reporting of quality in nursing and to make a critical contribution for a systemic theory development as a relevant basis for future developments of quality evaluation programs and quality reporting systems in long-term care.

Trends in ageing and ageing-in-place and the future market for institutional care: scenarios and policy implications

In several OECD countries the percentage of elderly in long-term care institutions has been declining as a result of ageing-in-place. However, due to the rapid ageing of population in the next decades future demand for institutional care is likely to increase. In this paper we perform a scenario analysis to examine the potential impact of these two opposite trends on the demand for institutional elderly care in the Netherlands. We find that the demand for institutional care first declines as a result of the expected increase in the number of low-need elderly that age-in-place. This effect is strong at first but then peters out. After this first period the effect of the demographic trend takes over, resulting in an increase in demand for institutional care. We argue that the observed trends are likely to result in a growing mismatch between demand and supply of institutional care. Whereas the current stock of institutional care is primarily focussed on low-need (residential) care, future demand will increasingly consist of high-need (nursing home) care for people with cognitive as well as somatic disabilities. We discuss several policy options to reduce the expected mismatch between supply and demand for institutional care.