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Technical efficiency of nursing homes: do five-star quality ratings matter?

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Abstract

This study investigates associations between five-star quality ratings and technical efficiency of nursing homes. The sample consists of a balanced panel of 338 nursing homes in California from 2009 through 2013 and uses two-stage data envelopment (DEA) analysis. The first-stage applies an input oriented variable returns to scale DEA analysis. The second-stage uses a left censored random-effect Tobit regression model. The five-star quality ratings i.e., health inspections, quality measures, staffing available on the Nursing Home Compare website are divided into two categories: outcome and structure form of quality. Results show that quality measures ratings and health inspection ratings, used as outcome form of quality, are not associated with mean technical efficiency. These quality ratings, however, do affect the technical efficiency of a particular nursing home and hence alter the ranking of nursing homes based on efficiency scores. Staffing rating, categorized as a structural form of quality, is negatively associated with mean technical efficiency. These findings show that quality dimensions are associated with technical efficiency in different ways, suggesting that multiple dimensions of quality should be included in the efficiency analysis of nursing homes. They also suggest that patient care can be enhanced through investing more in improving care delivery rather than simply raising the number of staff per resident.

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Authors and Affiliations

  1. Department of General Surgery, Stanford School of Medicine, 1070 Arastradero Road, Palo Alto, CA, 94304, USA

    Rajendra Dulal

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  1. Rajendra Dulal
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Correspondence to Rajendra Dulal.

Appendices

Appendix A: Measures of quality for long-stay and short-stay residents

Quality measures for long-stay residents are:

  1. 1.

    Percent of residents whose need for help with daily activities has increased.

  2. 2.

    Percent of high-risk residents with pressure sores.

  3. 3.

    Percent of residents who had a bladder inserted and left in the bladder.

  4. 4.

    Percent of residents who were physically restrained.

  5. 5.

    Percent of residents with a urinary tract infection.

  6. 6.

    Percent of residents who self-report moderate to severe pain.

  7. 7.

    Percent of residents experiencing one or more falls with major injury.

Quality measures for short-stay residents are:

  1. 1.

    Percent of residents with pressure ulcers (sores) that are new and worsened.

  2. 2.

    Percent of residents who self-report moderate to severe pain.

Appendix B: Case-mix index calculation

Following Cohen and Spector [21], the case mix index of a nursing home is measured at the facility-level as the number of minutes of staff time required for the care of the average resident. More specifically, using weights based on the management minutes system developed by Thoms and Schlesinger, the case-mix index is calculated as:

A(20) + B(18) + C(30) + D(30) + E(20) + F(48) + G(90) + H(90) + I(45) + J(32) + K(20) + L(50) + M(36)

where

  1. A

    percentage of patients needing full assistance bathing,

  2. B

    percentage of patients needing partial assistance bathing,

  3. C

    percentage of patients needing full assistance dressing,

  4. D

    percentage of patients needing partial assistance dressing,

  5. E

    percentage of patients catheterized,

  6. F

    percentage of patients incontinent,

  7. G

    percentage of patients needing parental feeding,

  8. H

    percentage of patients needing tube feeding,

  9. I

    percentage of patients needing assistance eating,

  10. J

    percentage of patients non-ambulatory,

  11. K

    percentage of patients with pressure sores,

  12. L

    percentage of patients receiving bowl/bladder retraining, and

  13. M

    percentage of patients receiving special skin care.

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Dulal, R. Technical efficiency of nursing homes: do five-star quality ratings matter?. Health Care Manag Sci 21, 393–400 (2018). https://doi.org/10.1007/s10729-017-9392-8

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  • DOI: https://doi.org/10.1007/s10729-017-9392-8

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