Effects
of For-Profit And Non-Profit Ownership Status For Residents of US.
Nursing Homes: A Longitudinal Study
Professor of Strategy Will
Mitchell's and PhD Student Aparna Venkatraman's research
goal is to determine the impact of the growth of proprietary nursing
homes, particularly in nursing home chains, on the quality and availability
of services for nursing home residents. Traditionally, non-profit
organizations have led the U.S. nursing home sector. However, since
the late 1970s, proprietary chains have been acquiring non-profits,
including both independent facilities and small non-profit chains,
as public financing through Medicare and Medicaid became available
to nursing home residents. The prevalence of both chain ownership
and for-profit status has grown strikingly.
For-profit and non-profit ownership status may raise conflicting
incentives concerning efficiency and services available to nursing
home residents. Past research on nursing homes has focused on the
consequences of ownership status on health outcomes and nursing
home costs. Cross-sectional studies have found that for-profit facilities
are often superior to their non-profit counterparts in terms of
performance efficiency, but they also take greater advantage of
informational asymmetries such as not informing residents about
available Medicare-financed care while nonetheless filing claims
for providing such services. This relatively less satisfactory service
behavior of for-profits tends to make non-profits the “preferred
form” to consumers. Thus, current acquisition trends, in which
for-profit chains acquire non-profit facilities, might lead to both
benefits and problems in the nursing home sector – greater
efficiency but inferior service.
Using a longitudinal data set spanning the period from 1991 to
2002, which includes data on almost all U.S. nursing homes, the
researchers will explore the differences in behavior and outcomes
among non-profits and for-profits, focusing specifically on the
following questions:
1) What trends are occurring in nursing home growth and shrinkage
rates?
2) How does the presence of for-profit homes influence efficiency
standards in non-profit homes?
3) How does ownership status affect acquisition strategies?
4) Do acquisitions by for-profit or non-profit chains promote entry
of new homes of a particular ownership status?
5) How does ownership status influence innovations in nursing home
care?
Download Dr. Mitchell's working papers:
Comparing
Service and Quality Among Chain and Independent Nursing Homes During
the 1990s
The
Commercialization of Nursing Home Care: Does For-Profit Cost-Control
Mean Lower Quality or do Corporations Provide the Best of Both Worlds?
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