General wisdom establishes that higher costs are related to quality of care. However, higher costs may also be an indication of mismanagement and inefficiency. Perhaps efficiency of care and quality of care go together. It may also be that the cost-quality relationship is curvilinear, that is, increased costs may result in increased quality up to a threshold after which increased costs may be reflective of mismanagement.
The purpose of this study is to evaluate the impact of nursing home quality on costs. The sample consists of all nursing homes in 6 states: 5 states participating in HCFA's Case-Mix and Quality Demonstration (NY, MS, ME, KS, SD) and Ohio. Sources of data consist of the Minimum Data Set Plus (MDS+) resident assessment instrument, the On-line Survey Certification of Automated Records (OSCAR) file, the Area Resource File (ARF), and the Health Care Investment Analyst (HCIA) Nursing Home Database. This study uses a hybrid translog econometric model where nursing home costs are a function of quality, output, input prices, and control variables. Nursing home costs are measured as the facility's direct patient care expense per day. Seven risk-adjusted outcome measures are used as quality indicators: cognitive decline, pressure ulcers (incidence and prevalence), ADL decline, prevalence of daily physical restraints, mood decline, antipsychotic drug use, and social engagement decline. The output measure consists of patient days of care. The price of labor input for the market is measured as the nurses average salary for the county. Control variables consist of organizational and market factors.
Learning Objectives: At the conclusion of the session, the participant in this session will be able to: 1. Use an econometric model to describe the factors that influence nursing home costs. 2. Describe the cost-quality relationship in nursing homes. 3. Assess how the cost-quality relationship varies for different nursing home outcomes. 4. Evaluate how organizational and market contextual factors influence nursing home costs
Keywords: Cost Issues, Quality
Presenting author's disclosure statement:
Organization/institution whose products or services will be discussed: None
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.