Given the preferential tax treatment afforded nonprofit firms, there is interest in whether the nonprofit nursing home sector serves a socially useful function. If prospective nursing home residents are uninformed regarding nursing home quality, then nonprofit homes, which are often affiliated with religious or charitable organizations, can serve as a low cost signal of quality. A theoretical model shows that much of the previous empirical literature is flawed in that it fails to examine the possibility that nonprofit homes can increase the provision of quality in the for-profit sector via a spillover effect. If competition from one sector influences performance of the other type, omission of this factor can bias inferences about the relationship between ownership and quality, perhaps accounting for the confusing and at times contradictory findings in the literature. This study tests four implications of the theoretical model. (1) Do nonprofit facilities provide higher quality nursing home care, as assessed by a number of structural, procedural and outcome measures? (2) Is there a spillover effect in which nonprofit market share influences the provision of quality in the for-profit sector? (3) Are nonprofit nursing homes indeed engaging in socially beneficial activities? (4) Is the low level of quality in certain nursing facilities due to the limited ability of consumers to obtain quality-related information? By using data from the 1999 Online Survey, Certification and Reporting system, the study will greatly increase our understanding of the role of the nonprofit sector in encouraging quality care in the provision of nursing home services.
Learning Objectives: At the conclusion of the session, the participant in this session will be able to: 1. Describe whether nonprofit facilities do in fact provide higher quality nursing home care, as assessed by a number of structural, procedural and outcome measures. 2. Assess whether there is spillover effect in which nonprofit market share influences the provision of quality in the for-profit sector. 3. Advise policymakers in evaluating, on the basis of empirical evidence, whether nonprofit nursing homes are indeed engaging in socially beneficial activities. 4. Determine whether low nursing home quality in certain facilities may be due to the limited ability of consumers to obtain quality-related information.
Keywords: Nursing Home Markets, Quality of Care
Presenting author's disclosure statement:
Organization/institution whose products or services will be discussed: None
Disclosure not received
Relationship: Not Received.