The 130th Annual Meeting of APHA

3037.2: Monday, November 11, 2002 - Board 5

Abstract #47780

Relationship of Quality of Care and Financial Performance in the Nursing Home Industry

Robert Weech-Maldonado, PhD, Department of Health Policy & Administration, Pennsylvania State University, 116 Henderson Building, University Park, PA 16801, (814) 865-1926, rxw25@psu.edu, Gerald Neff, MS, Kaufman, Hall, and Associates, 1 Northfield Plaza, Suite 240, Northfield, IL 60093, and Vincent Mor, PhD, Center for Gerontology and Health Care Research, Brown University, P.O. Box GA-411, Providence, RI 02912.

In the face of increasing competition and restrictive payments, some nursing homes are focusing on providing quality care in attempts to increase their financial performance. The goal of this study was to describe the relationship between quality of care and financial performance in the nursing home industry. Data sources include the Health Care Investment Analyst (HCIA) Nursing Home Database, Minimum Data Set Plus (MDS+), and the On-line Survey Certification of Automated Records (OSCAR) file. The sample consists of 706 nursing homes in 5 states (NY, ME, VT, KS, SD). Structural equation modeling was used to examine the total, direct, and indirect effects of the variables. Our findings indicate that nursing homes that produce better outcomes of care (lower pressure ulcers) were able to achieve lower patient care costs and, in the process, reported better financial performance. Similarly, better process of care (lower use of restraints and catheters) had an indirect negative effect on costs, through its relationship with better outcomes of care. On the other hand, nursing homes with better structural quality (higher RN staffing) experienced higher costs. Nursing homes with better RN staffing and superior process quality experienced higher revenues, and as a result better financial performance. However, those facilities with better outcomes of care did not experience a similar revenue enhancement. The total effects (direct and indirect effects), from process and outcomes quality to financial performance were small but positive, .034 and .025, respectively.

Learning Objectives:

Keywords: Nursing Homes, Quality of Care

Presenting author's disclosure statement:
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.

Current Issues in Health and Health Care for Older Adults

The 130th Annual Meeting of APHA