Costs and cost containment in nursing homes.

The study examines the impact of structural and process variables on the cost of nursing home care and the utilization of various cost containment methods in 43 california nursing homes. Several predictors were statistically significant in their relation to cost per patient day. A diverse range of cost containment techniques was discovered along with strong predictors of the utilization of these techniques by nursing home administrators. The trade-off between quality of care and cost of care is discussed.     

Cost efficiency of nursing homes: do five-star quality ratings matter?

Nursing homes may respond to the pressure to reduce costs by reducing quality of care, so the two are related. This study examines the determinants of nursing home costs and cost efficiency, and investigates how various measures of nursing home care quality influence both of these. It applies a one-step stochastic frontier approach to a large panel of California nursing homes surveyed between 2009 and 2013. Quality is measured by three different ratings available on the Nursing Home Compare website: rating on quality measures, rating on the health inspection, and rating on staffing levels. Results show that the rating on quality measures, an outcome-based measure of quality, is inversely related to costs but unrelated to mean cost efficiency. In other words, a better rating on quality measures is associated with lower nursing home costs. The health inspection rating is not associated with either costs or mean cost efficiency. The rating for staffing levels, a structural measure of quality, is negatively associated with cost efficiency. These findings reveal that different measures of quality have different relationships with costs and cost efficiency. The findings suggest that better quality outcomes in nursing homes may be achievable with fewer resources and/or improved care procedures, which in turn should reduce nursing home costs.     

Does Prospective Payment Really Contain Nursing Home Costs?

OBJECTIVE: To examine whether nursing homes would behave more efficiently, without compromising their quality of care, under prospective payment. DATA SOURCES: Four data sets for 1994: the Skilled Nursing Facility Minimum Data Set, the Online Survey Certification and Reporting System file, the Area Resource File, and the Hospital Wage Indices File. A national sample of 4,635 nursing homes is included in the analysis. STUDY DESIGN: Using a modified hybrid functional form to estimate nursing home costs, we distinguish our study from previous research by controlling for quality differences (related to both care and life) and addressing the issues of output and quality endogeneity, as well as using more recent national data. Factor analysis was used to operationalize quality variables. To address the endogeneity problems, instrumental measures were created for nursing home output and quality variables. PRINCIPAL FINDINGS: Nursing homes in states using prospective payment systems do not have lower costs than their counterpart facilities under retrospective cost-based payment systems, after quality differences among facilities are controlled for and the endogeneity problem of quality variables is addressed. CONCLUSIONS: The effects of prospective payment on nursing home cost reduction may be through quality cuts, rather than cost efficiency. If nursing home payments under prospective payment systems are not adjusted for quality, nursing homes may respond by cutting their quality levels, rather than controlling costs. Future outcomes research may provide useful insights into the adjustment of quality in the design of prospective payment for nursing home care.     

Impact of Public Reporting on Quality of Postacute Care

Objective. Evidence supporting the use of public reporting of quality information to improve health care quality is mixed. While public reporting may improve reported quality, its effect on quality of care more broadly is uncertain. This study tests whether public reporting in the setting of nursing homes resulted in improvement of reported and broader but unreported quality of postacute care.
Data Sources/Study Setting. 1999–2005 nursing home Minimum Data Set and inpatient Medicare claims.
Study Design. We examined changes in postacute care quality in U.S. nursing homes in response to the initiation of public reporting on the Centers for Medicare and Medicaid Services website, Nursing Home Compare. We used small nursing homes that were not subject to public reporting as a contemporaneous control and also controlled for patient selection into nursing homes. Postacute care quality was measured using three publicly reported clinical quality measures and 30-day potentially preventable rehospitalization rates, an unreported measure of quality.
Principal Findings. Reported quality of postacute care improved after the initiation of public reporting for two of the three reported quality measures used in Nursing Home Compare. However, rates of potentially preventable rehospitalization did not significantly improve and, in some cases, worsened.
Conclusions. Public reporting of nursing home quality was associated with an improvement in most postacute care performance measures but not in the broader measure of rehospitalization.     

The effect of competition on nursing home expenditures under prospective reimbursement.

The for-profit nursing home's incentive to minimize costs has been maligned as a major cause of the quality problems that have traditionally plagued the nursing home care industry. Yet, profit-maximizing firms in other industries are able to produce products of adequate quality. In most other industries, however, firms are constrained from reducing costs to the point where quality suffers by the threat of losing business to competing firms. In the nursing home industry, competition for patients often does not exist because of the shortage of nursing home beds. As a result, one would expect that nursing homes located in areas where there is excess demand would spend less on patient care than homes located where the bed supply is relatively abundant. This hypothesis is tested using Wisconsin data from 1983. It is found that, in counties with relatively tight bed supplies, an additional empty bed in all the homes in the county will force each home to increase expenditures by $.62 per day for each patient in the home. Overall, the average nursing home located in underbedded markets would spend $5.12 more per patient day or about $240,000 more annually (in 1983 dollars) if it were located in a market where it was forced to compete for patients. The implications for public policy are discussed.     

Physician practice patterns in nursing homes

This review of the literature describes models of physician practice in nursing homes including the barriers to increasing physician workforce in nursing homes and the impact of various physician practice models on quality of care in nursing homes. Traditional nursing home practice is first described followed by a review of the literature pertaining to nurse practitioners and physician assistants in nursing home practices, closed staffing models, managed care, and nursing home specialist models. Literature describing barriers to increasing the physician workforce in nursing homes is then presented including training, reimbursement, and malpractice insurance for physicians who work in nursing homes. Finally, the impact of physician practice models on quality of care is reviewed with a focus on frequency of visits, hospitalizations, cost-effectiveness, communication, and patient satisfaction.     

Hospital DRGs and the need for long-term care services: an empirical analysis.

The Medicare DRG-based Prospective Payment System (PPS) encourages hospitals to reduce length of stay for elderly patients. Thus, discharges to long-term care services are expected to increase. Maryland hospital data for 1980 are used to identify those DRGs which most frequently represent patients discharged to nursing home and home health care services; explores the incentive to discharge earlier under PPS those patients needing long-term care versus short-term care; and describes characteristics of patients most likely to face increased pressure of earlier discharge to nursing homes and home health programs. Because only a limited set of patient characteristics are available from Maryland hospitals, data from a study of San Diego nursing homes are used to explore further the sociodemographic and health status measures associated with unusually long stays in a hospital prior to nursing home placement. This research suggests that the DRG reimbursement system gives hospitals a strong incentive for earlier discharge of patients needing long-term care services. However, hospitals that target only long-term care patients for early discharge will not substantially gain under PPS because these patients represent a small portion of the cases treated in the hospital and a small percentage of unreimbursed days.     

The effects of ownership and ownership change on nursing home industry costs.

OBJECTIVE. This study examines the effects of ownership type and ownership change on nursing home cost structures, differentiating patient care costs from plant costs. DATA SOURCES. Administrative data from the Michigan Department of Social Services, Medical Services Administration (Medicaid), and the Michigan Department of Public Health are used. Cost data are based on audited cost reports for 393 nursing care facilities in Michigan in 1989. Other facility characteristics are based on data from the 1989 annual licensing and certification survey conducted by the Michigan Department of Public Health. STUDY DESIGN. A series of ordinary least squares regressions is estimated, in which the dependent variable is either per diem patient costs or per diem plant costs. Ownership types are defined as chain, proprietary non-chain, freestanding non-profit, government-owned, and hospital-based facilities. Pooled estimation techniques, as well as separate regressions by ownership type, are presented to test for interaction effects. Key variables include whether a facility changed ownership in the preceding five years and whether chain facilities are in-state- or out-of-state-owned, in addition to size, payer mix, and case mix. PRINCIPAL FINDINGS. Behavioral differences among nursing home ownership types in respect to patient care costs tended to distinguish government-owned and hospital-based facilities from the freestanding homes rather than the usual distinction between for-profit and not-for-profit classes. Variables traditionally included in nursing home cost studies, such as size, occupancy, payer mix and case mix, were found to have similar effects on per diem patient care costs for freestanding non-profit homes as well as for chain proprietary facilities. With regard to the effects of ownership change on per diem plant and per diem patient costs, however, there are few differences among ownership types. Chain and non-chain for-profit facilities, non-profit homes, and hospital long-term care units that had changed ownership reported significantly higher per diem plant costs than facilities without a change of ownership, but did not spend more on patient-related costs. Michigan Medicaid plant reimbursement system policy changes instituted in 1985 to promote continued ownership of facilities were not entirely successful. CONCLUSIONS. Non-profit homes look increasingly like their for-profit counterparts with respect to spending on patient care costs. Increased competition for the more lucrative private-pay patients, coupled with declining state Medicaid reimbursement to nursing homes, may have blurred the historical distinctions between the non-profit and for-profit sectors in the nursing home industry. An exception to increasing homogeneity within the nursing home industry is the tendency of proprietary homes to experience more frequent changes of ownership, which results in higher capital costs passed on to state Medicaid programs. Findings from this study indicate that while facility sales increase per diem plant costs, they do not result in increased spending for direct patient care, suggesting that state Medicaid programs may be indirectly subsidizing facility sales with no accompanying increase in expenditures for patient care. To discourage frequent facility sales, state Medicaid programs may need to consider alternative methods of reimbursing nursing home owners for capital costs.     

Integrating Principles of Safety Culture and Just Culture Into Nursing Homes: Lessons From the Pandemic

Decades of concerns about the quality of care provided by nursing homes have led state and federal agencies to create layers of regulations and penalties. As such, regulatory efforts to improve nursing home care have largely focused on the identification of deficiencies and assignment of sanctions. The current regulatory strategy often places nursing home teams and government agencies at odds, hindering their ability to build a culture of safety in nursing homes that is foundational to health care quality. Imbuing safety culture into nursing homes will require nursing homes and regulatory agencies to acknowledge the high-risk nature of post-acute and long-term care settings, embrace just culture, and engage nursing home staff and stakeholders in actions that are supported by evidence-based best practices. The response to the COVID-19 pandemic prompted some of these actions, leading to changes in nursing survey and certification processes as well as deployment of strike teams to support nursing homes in crisis. These actions, coupled with investments in public health that include funds earmarked for nursing homes, could become the initial phases of an intentional renovation of the existing regulatory oversight from one that is largely punitive to one that is rooted in safety culture and proactively designed to achieve meaningful and sustained improvements in the quality of care and life for nursing home residents.     

Using outcomes to make inferences about nursing home quality.

Recent concerns about containing the growth of public expenditures on nursing home care and the development of prospective and casemix reimbursement systems with incentives for cost containment have increased the importance of monitoring quality in nursing homes. The current view is that quality assurance systems should include more outcome measures to improve quality. This article discusses why it is difficult to develop facility-level outcome measures that can be used to evaluate and compare the quality of care of nursing homes. The article places the current interest in outcomes measures in its historical policy context and reviews important conceptual and methodological issues associated with outcome-based quality assessment. The authors discuss the difficulty in isolating the facility effect when studying nursing home outcomes and implications of using different estimation approaches. In conclusion, they discuss the need to integrate research with outcome-based quality assurance systems to allow ongoing evaluation and quality improvement.     

Nursing home quality, staffing, and malpractice paid-losses

Litigation activity against Florida's nursing home providers increased dramatically over the past two decades. This has been a significant concern for policy makers and nursing home administrators as they attempt to balance the realities of negligent behavior with its impact on the overall cost and quality of long-term care. This study uses Medicare Cost Report data and OSCAR (Online Survey, Certification, and Reporting) data for Florida's nursing facilities over a five-year period from 2001 to 2005 to examine the effect of quality and staffing on malpractice paid-losses. The results from the multiple regression analyses indicate that staffing levels are strongly associated with paid-losses for malpractice claims. Nursing homes with higher registered nurse to resident ratios are less likely to experience malpractice paid-losses. In contrast, higher nursing assistant to resident ratios are significantly related to higher probability of malpractice paid-losses. The effect of total deficiency on malpractice is not significant. These findings suggest that increases in more skilled nurse staffing are associated with lower likelihood of nursing home malpractice paid-losses. However, nursing homes need to balance the overall cost and quality of their facilities related to staffing and malpractice litigations.     

Estimating patient-level nursing home costs.

This article presents a methodology developed to estimate patient-level nursing home costs. Such estimates are difficult to obtain because most cost data for nursing homes are available from Medicare or Medicaid cost reports, which provide only average values per patient-day across all patients (or all of a particular payer's patients). The methodology presented in this article yields "resource consumption" (RC) measures of the variable cost of nursing staff care incurred in treating individual nursing home patients. Results from the application of the methodology are presented, using data collected in 1980 on a sample of 961 nursing home patients in 74 Colorado nursing homes. This type of approach could be used to link nursing home payments to the care needs of individual patients, thus improving the overall equity of the payment system and possibly reducing the access barriers facing especially Medicaid patients with high-cost care needs.     

Does investor-ownership of nursing homes compromise the quality of care?

Quality problems have long plagued the nursing home industry. While two-thirds of U.S. nursing homes are investor-owned, few studies have examined the impact of investor-ownership on the quality of care. The authors analyzed 1998 data from inspections of 13,693 nursing facilities representing virtually all U.S. nursing homes. They grouped deficiency citations issued by inspectors into three categories ("quality of care," "quality of life," and "other") and compared deficiency rates in investor-owned, nonprofit, and public nursing homes. A multivariate model was used to control for case mix, percentage of residents covered by Medicaid, whether the facility was hospital-based, whether it was a skilled nursing facility for Medicare only, chain ownership, and location by state. The study also assessed nurse staffing. The authors found that investor-owned nursing homes provide worse care and less nursing care than nonprofit or public homes. Investor-owned facilities averaged 5.89 deficiencies per home, 46.5 percent higher than nonprofit and 43.0 percent higher than public facilities, and also had more of each category of deficiency. In the multivariate analysis, investor-ownership predicted 0.679 additional deficiencies per home; chain-ownership predicted an additional 0.633 deficiencies per home. Nurse staffing ratios were markedly lower at investor-owned homes.     

Foster home care for the frail elderly as an alternative to nursing home care: an experimental evaluation.

This paper describes a program (Community Care Program) in which some elderly hospital patients who were candidates for nursing home placement were placed in foster homes. Caregivers were carefully trained and supervised. A total of 112 elderly inpatients were randomly assigned to placement in a nursing home or a foster care home. Patients and caregivers were interviewed at 3, 6, 9, and 12 months after placement. Community Care Program patients were more likely to maintain or improve ADL (activities of daily living) and mental status scores. They also had better nursing outcomes and were more likely to get out of the house than were nursing home patients. Nursing home patients had higher life satisfaction, and participated in more social and recreational activities. The Community Care Program was 17 per cent less costly than nursing home care. The results suggest that foster care may be a viable alternative for a segment of the nursing home population.     

Evaluation of a prospective payment system for VA contract nursing homes

An evaluation of a pilot program for community nursing home care reimbursement by Department of Veterans Affairs Medical Centers (VAMCs) was undertaken. Eight VAMCs began using the Enhanced Prospective Payment System (EPPS) in 1992. These sites were compared to eight customary payment sites in a pretest/posttest quasi-experimental design. Outcomes included access to care, administrative workload, quality of care, and cost. As expected, per diem costs were significantly higher for EPPS than customary reimbursement patients ($106 vs. $87). However, EPPS sites placed veterans more quickly (81 days vs. 113 days; p < .01) than comparison sites and reduced administrative workload associated with placement. EPPS sites also increased the number of Medicare-certified homes under contract (76% vs. 54%) and placed significantly more veterans who received therapy (20% vs. < 1%). Savings in hospital days more than offset the increased cost of nursing home placement. Because the findings were attributed largely to a few veterans with long lengths of hospital stay, the early success of EPPS may diminish as the backlog of these long-stay patients decreases.     

Resident smoking in long-term care facilities--policies and ethics.

Objective: To characterize smoking behavior, facility policies related smoking, and administrators'' views of smoking-related problems in Veterans Affairs nursing home care units nationwide. Methods: An anonymous mail survey of long-term care facilities was administered to 106 nursing home supervisors at VA Medical Centers with nursing home care units. The response rate was 82%. Results: Administrators from 106 VA nursing home units reported smoking rates ranging from 5% to 80% of long-term care residents, with an average of 22%. Half of the nursing homes had indoor smoking areas. Frequent complaints from nonsmokers about passive smoke exposure were reported in 23% of the nursing homes. The nursing administrators reported that patient safety was their greatest concern. Seventy- eight percent ranked health effects to the smokers themselves a "major concern," while 70% put health effects to exposed nonsmokers in that category. Smoking in the nursing home was described as a "right" by 59% of respondents and a ¿privilege¿ by 67%. Some individuals reported that smoking was both a right and a privilege. Conclusion: Smoking is relatively common among VA long-term care patients. The promotion of personal autonomy and individual resident rights stressed in the Omnibus Budget Reconciliation Act of 1987 may conflict with administrative concerns about the safety of nursing home smokers and those around them.     

Survival in a cohort of social services placements in nursing and residential homes: factors associated with life expectancy and mortality

The aim of this study was to examine the life expectancy of elderly people in nursing and residential care over a 20-month period and its relationship to specific risk factors. Using a retrospective cohort design, data obtained on 1888 residents placed between 1 July 1997 and 30 April 1999 in residential, nursing and dual registered homes within Nottingham Health Authority boundaries were examined. Additional data on physical and mental disability at placement were available for 514 residents. Main outcome measures comprised survival rate overall, and in relation to gender, age, home type (nursing, residential or dual), source of placement (hospital or community) and various disability factors.One-year survival rates were: overall, 66%; nursing homes, 59%; dual homes, 58%; and residential homes 76%. Median survival in nursing homes was 541 days, but was not reached in residential homes. Male gender, admission to nursing or dual registered homes, placement from hospital, decreased mobility and increased age were associated with decreased life expectancy. Although no association was found between length of survival and level of cognitive function, lack of cognitive impairment was associated with lower survival. In conclusion, mortality is high in nursing, dual and residential homes where life expectancy has been shown to be associated with gender, home type, origin of placement and mobility. Rates of survival are related to higher comorbidity and disability. Important data for planning and assessing care needs can be yielded through the analysis of mortality data.     

Analysing access to nursing home care

The aim of this study is to investigate access to nursing home care in selected regions of Australia, Canada and the United States, and to examine the common ways in which nursing homes are used. Firstly, a review of methodological considerations in measuring access to nursing home care is made. Secondly, patient turnover patterns are interpreted with a view to showing differences in nursing home use among the countries studied; aggregate turnover rates, length of stay and outcomes are compared. Thirdly, groups of patients who differ in demographic and morbidity characteristics and in their use of nursing homes are discussed. Finally a number of distributive implications of these results are raised and a framework is outlined for considering redistributive consequences of changes in the use of nursing homes. It is concluded that the rate of flow of patients through nursing homes is as important a determinant of access to nursing home care as the level of bed provision and that adoption of this dynamic view of access indicates considerable scope for redistributing use of resources within the nursing home systems of all three countries.     

Nursing homes in China

China will face a dramatic transition from a young to an aged society in the coming 30 to 40 years. In 2000, there were 88,110,000 persons aged 65 years and older, which represented 7% of the population. This percentage is projected to increase to 23% in 2050. Regarding health and long-term care for older adults, the current challenge is to build a comprehensive system of care for older adults. Nursing home care is an inevitable care model for frail older adults in China, which is largely sponsored by the government of China with contributions from some nongovernment organizations and private investors. China is a large country. Within the country, long-term care varies greatly between rural and urban areas, and among the different economic developing areas. In urban and better-developed areas, the range of services exists; however, in rural and less-developed areas, the range of services is limited. The "Star Light Program" and "Beloved Care Engineering" were recent government initiatives to improve aged care. They were launched in 2001 and have dramatically increased the number of both senior centers and nursing homes for older adults. While the quantity of nursing homes is still inadequate with an additional mismatch problem between the supply and demand, the quality of care in most nursing homes is suboptimal. At present, most administrative and frontline workers in nursing homes have received little training in elder care. There is a need for good-quality structured training in long-term care for all types of staff. Moreover, quality standard for care, including standard setting, assessment, and monitoring, is an important issue and needs substantial improvement for nursing homes in China. Currently, 1.5% of older people live in nursing homes and apartments for older people. Because of the peculiar 4-2-1 family structure in China, we expect the prevalence of nursing home placement of older adults will increase in the coming years. The government of China has realized that it is financially not sustainable to expand in this area using only the government's resources. The current policy is to encourage private and foreign investors to participate in the nursing home business in China.