Market competition and quality of care in the nursing home industry

Poor quality nursing home care is a problem in the United States, a problem that threatens the lives and well-being of one of our most vulnerable populations. The competitive structure of the nursing home market may influence the strategies and behaviors nursing homes pursue to capture the resources they need to operate. The goal of this study was to determine whether nursing home quality is related to the level and type of competition present in the market. This study specifically examined whether or not a relationship exists between structural, process, and outcome quality indicators, and (1) the availability of nursing home substitutes, (2) the threat of market entry, (3) the presence of rivalry in the market, and (4) the relationship between the nursing homes and their buyers and suppliers. This study examined secondary data from the Minimum Data Set Plus (MDS +), the On-line Survey Certification of Automated Records (OSCAR), the Area Resource File (ARF), and the Medicaid Reimbursement Survey. Weighted least squares regression analysis was utilized to estimate the relationships between the quality indicators and the different aspects of competition. This study found that some forms of competition are significantly related to nursing home quality performance. The availability of nursing home substitutes, the presence of active certificate of need laws, and the level of excess demand are associated with nursing home quality.