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Comparison of Nursing Home Financial Transparency and Accountability in Four Locations

Abstract

The marketization and privatization of nursing home care has grown in many countries along with expenditures. Using documents and government reports, this study explored three research questions about nursing homes in California, Ontario, England, and Norway. What were: (1) the contextual and privatization differences; (2) payment methods and trends in revenues and expenditures for direct care, administration, and profits; and (3) the financial reporting and accountability systems? The findings showed nursing homes were highly privatized in all locations except Norway. Revenues and expenditures increased steadily in all locations. Direct care services were lower in California and England where privatization was highest. Administrative costs were high especially in for-profit companies, except in Norway’s municipal nursing homes. Profit margins were generally not reported or under reported, but high margins were found in for-profits and chains where reports were available. Contrary to the hypothesis that financial transparency and accountability would increase with privatization, only California and the U.S. had developed detailed public financial reporting, although these reports could be improved. Ontario required detailed financial reporting except for administration and profits and the information was not publicly available. England and Norway had no public systems for financial reporting. None of the locations had cost controls on administration and profits, except for Medicaid administration controls in California. Policy makers need to focus on improvements in financial transparency and accountability to assure value for expenditures and to potentially improve quality.

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Acknowledgments

This research was supported by the Social Sciences and Humanities Research Council of Canada as part of a Major Collaborative Research Initiative, Pat Armstrong, York University Principal Investigator.

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Correspondence to Charlene Harrington.

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Harrington, C., Armstrong, H., Halladay, M. et al. Comparison of Nursing Home Financial Transparency and Accountability in Four Locations. Ageing Int 41, 17–39 (2016). https://doi.org/10.1007/s12126-015-9233-3

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Keywords

  • Ownership
  • Accountability
  • Financing
  • Transparency