Cost and efficiency in nursing homes: a stochastic frontier approach

The average level of cost inefficiency in New York nursing homes is estimated at 29%, based on a two-year panel of 164 Skilled Nursing Facilities and 443 combination Skilled and Health Related Facilities. The stochastic frontier cost function is fit to the data utilizing the composed error model, wherein statistical noise and allocative and technical inefficiency are jointly estimated. There is no change in efficiency between 1987 and 1990, and it does not vary between for-profit and not-for-profit homes. Excessive managerial and supervisory personnel and diseconomies of size are linked to inefficient operation. Chronic excess demand is suggested as a cause of the high level of inefficiency.     

Scale and scope economies in nursing homes: a quantile regression approach

Nursing homes vary widely between facilities with very few beds and facilities with several hundred beds. Previous studies, which estimate nursing home scale and scope economies, do not account for this heterogeneity and implicitly assume that all nursing homes face the same cost structure. To account for heterogeneity, this paper uses quantile regression to estimate cost functions for skilled and intermediate care nursing homes. The results show that the parameters of nursing home cost functions vary significantly by output mix and across the cost distribution. Estimates show that product-specific scale economies systematically increase across the cost distribution for both skilled and intermediate care facilities, with diseconomies of scale in the lower deciles and no significant scale economies in the higher deciles. As for ray scale economies, estimates show economies of scale in the lower deciles and diseconomies of scale or no significant scale economies at higher deciles. The estimates also show that scope economies exist in the lower cost deciles and that no scope economies exist in the higher cost deciles. Additionally, the degree of scope economies monotonically decreases across the deciles.     

Excess demand and cost relationships among Kentucky nursing homes

This article examines the influence of excess demand on nursing home costs. Previous work indicates that excess demand, reflected in a pervasive shortage of nursing home beds, constrains market competition and patient care expenditures. According to this view, nursing homes located in underbedded markets can reduce costs and quality with impunity because there is no pressure to compete for residents. Predictions based on the excess demand argument were tested using 1989 data from a sample of 179 Kentucky nursing homes. Overall, the results provide partial support for the excess demand argument. Factors that may counteract the influence of excess demand are considered. Finally, the role of competition in nursing home markets and difficulties associated with making it operational are discussed.     

Terminal patients in Belgian nursing homes: a cost analysis

Policy makers and health care payers are concerned about the costs of treating terminal patients. This study was done to measure the costs of treating terminal patients during the final month of life in a sample of Belgian nursing homes from the health care payer perspective. Also, this study compares the costs of palliative care with those of usual care. This multicenter, retrospective cohort study enrolled terminal patients from a representative sample of nursing homes. Health care costs included fixed nursing home costs, medical fees, pharmacy charges, other charges, and eventual hospitalization costs. Data sources consisted of accountancy and invoice data. The analysis calculated costs per patient during the final month of life at 2007/2008 prices. Nineteen nursing homes participated in the study, generating a total of 181 patients. Total mean nursing home costs amounted to 3,243 € per patient during the final month of life. Total mean nursing home costs per patient of 3,822 € for patients receiving usual care were higher than costs of 2,456 € for patients receiving palliative care (p = 0.068). Higher costs of usual care were driven by higher hospitalization costs (p < 0.001). This study suggests that palliative care models in nursing homes need to be supported because such care models appear to be less expensive than usual care and because such care models are likely to better reflect the needs of terminal patients.     

How nursing homes behave: a multi-equation model of nursing home behavior

This paper estimates a multi-equation model of nursing home behavior using the 1973 NCHS National Nursing Home Survey for data. The paper investigates empirically the effects of public reimbursement and regulatory policies, as well as other exogenous factors, on the following dependent variables: (1) average operating cost; (2) nursing hours per patient-day; (3) an index of rehabilitation-type services; (4) the occupancy rate; (5) the mix of public and private patients; and (6) the rate charged to private patients. The results dramatize the importance of endogeneity concerns in nursing home behavior. Rate setting and many regulations are shown empirically to have unintended and often undesired consequences on cost and other policy criteria of interest. While there has been anecdotal evidence of such system-wide interdependencies, this study affirms that such possibilities must be taken seriously. Rational nursing home regulation cannot proceed apart from a comprehensive understanding of the nursing home behavioral environment.     

The regulation of nursing homes: a comparative perspective

Britain and the United States alike face the question of how best to protect the growing and vulnerable population of nursing home residents through State regulation of private institutions. Despite marked differences in scale, organization, and financing between the two nations, there are striking similarities in the problems encountered and in styles of enforcement adopted in response. Analysis of the regulatory systems in practice shows a convergence in the regulatory process despite the dissimilarities between formal regulatory models. Both systems are responding--however imperfectly--to the social environment of nursing home care. Future regulatory policy will have to encompass formal and informal, legal and social control.     

Social work consultation to nursing homes: a study

This is a study of 39 social work consultants to nursing homes in the Southeast who continued their consultation activities after the federal government removed the requirement for nursing homes to employ social work consultants to qualify for reimbursement of cost through federal programs. It examines their knowledge and attitudes about aging and their consultative skills in relation to case, process, and program consultation and three types of group work.     

Care of the elderly and occupational health for staff in local nursing homes: quality issues

Describes a questionnaire sent to 11 of the 66 nursing homes in the Brighton Health Authority to compare the quality of care provided. These homes care for 242 patients (representing 13 per cent of the 1,728 places in Brighton nursing homes). Questions dealt with residential environment, occupational health, care and control of medicines, clerical services, procedures for prevention and control of infection, etc. Results are discussed and recommendations for further improvements made.     

Do not hospitalize orders in nursing homes: a pilot study

OBJECTIVES: To determine (1) the point prevalence of do not hospitalize (DNH) policies in nursing facilities directed by members of the American Medical Directors Association (AMDA) Foundation Long-term Care Research Network, (2) the frequency with which physicians are writing DNH orders, and (3) respondent perceptions about the appropriateness of the number of DNH orders as too few or too many and reasons for such perceptions. DESIGN: Online survey of members of the AMDA Foundation Long-term Care Research Network. SETTING: Nursing facilities. PARTICIPANTS: All members of the AMDA Foundation Long-term Research Network on July 1, 2003 were eligible for participation (N = 293). INTERVENTION: None. MEASUREMENTS: Demographic information regarding census, region, setting, governance, presence of teaching and/or hospice affiliation, prevalence of DNH orders, and qualitative information regarding the use of DNH orders in each facility. RESULTS: The response rate was 32% (n = 95). DNH policies were in place for 62% of facilities and the prevalence of DNH orders ranged from 12% to 23% when facilities were stratified by size. Percentage of residents with documented DNH orders ranged from 0% to 99% at individual facilities. No significant differences were found although trends were noted as follows: chain facilities had fewer DNH policies (RR = 0.8; 95% CI = 0.6-1.1) whereas rural facilities (RR = 1.1, 95% CI = 0.8-1.5) and those associated with a teaching institution (RR = 1.1, 95% CI = 0.8-1.5) were more likely to have a DNH policy. Of respondents, 80% indicated that physicians in their facilities were writing DNH orders but 77% believed that the number of DNH orders was too few. Respondents cited overly optimistic prognosis and lack of knowledge about DNH orders as barriers to writing more DNH orders. CONCLUSION: The prevalence of DNH orders in this investigation is higher than previous estimates from national data samples. Most facilities had a DNH policy and although respondents indicated that physicians do write DNH orders, they believed that DNH orders were not utilized frequently enough. There is a large variation in prevalence of DNH orders across the facilities included in this survey. Barriers to use, as perceived by medical directors, included unrealistic expectations by family, fear of litigation, and staff discomfort with managing residents who experience clinical decline. Nevertheless, DNH orders are used extensively in some facilities associated with members of the AMDA Foundation Long-term Care Research Network.