Research Activities, December 2011: Health Care Costs and Financing: Financial performance has modest effect on nursing home quality improvement

Financial performance has modest effect on nursing home quality improvement

Today, there is an increased emphasis on improving nursing home quality via a number of market-based incentives, including public reporting of quality scores. Efforts to improve quality can be expensive. However, a new study found that better financial performance had only a modest effect on producing higher nursing home quality of care. Also, this effect was only seen when public reporting was in place.

Researchers examined facility characteristics and quality measures from the Online Survey and Certification Reporting System. They analyzed cost-related and financial report information from the Medicare Cost Reports, which are filed by all Medicare-certified skilled nursing facilities (SNFs). The researchers studied profit margins and four quality measures for 11,275 Medicare-certified freestanding SNFs: total staff hours per resident day, incidence rates of pressure sores, restraint use, and the total number of deficiency citations.

Financial performance was a significant predictor of quality for three measures after public reporting. A 1 percentage point increase in profit margin resulted in an increase in total staff hours per resident day by 0.12. It also translated into a reduction in the incidence of pressure sores by 0.16 percentage points and a significant decline in deficiency citations. The study was supported in part by the Agency for Healthcare Research and Quality (HS16478).

See "Changes in the relationship between nursing home financial performance and quality of care under public reporting," by Jeongyoung Park, Ph.D. and Rachel M. Werner, M.D., Ph.D., in Health Economics 20, pp. 783-801, 2011.
Research Activities, December 2011: Health Care Costs and Financing: Financial performance has modest effect on nursing home quality improvement