Nursing Home Quality, Chain Affiliation, Profit Status and Performance

Randy I. Anderson, H. Shelton Weeks (), Bradley K. Hobbs () and James R. Webb ()
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Randy I. Anderson: City University of New York-Baruch College, New York, NY 10010
H. Shelton Weeks: Florida Gulf Coast University, Ft. Myers, FL 33965-6565
Bradley K. Hobbs: Florida Gulf Coast University, Ft. Myers, FL 33965-6565
James R. Webb: Cleveland State University, Cleveland, OH 44114

Journal of Real Estate Research, 2003, vol. 25, issue 1, pages 43-60

Abstract: This study uses data on 487 nursing homes in Florida for 1996 to examine several issues about the efficiency of nursing homes. Chain affiliation (national, regional or independent) is examined, as is profit status (for-profit or non-profit). For the first time quality of care is also included, due to the uniqueness of the data which contains quality scores assigned by State of Florida officials. Multiple regression analysis, as well as data envelopment analysis (DEA), is used. The results, in general, indicate that substantial inefficiencies do exist in the range of 20% to 30%, which is consistent with previous efficiency studies in this industry. Without controlling for quality, for-profit firms and chain affiliated firms are shown to be slightly more efficient than their independent and non-profit counterparts. However, chain affiliated firms scored lower on quality than independents and for-profit firms scored lower on quality than non-profit firms. When controlling for quality, the profit status of the firm and room utilization rates are positively and significantly related to efficiency. However, in the presence of the quality control variable, there is no evidence to suggest that chain affiliation impacts efficiency.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 2003

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