The impact of ownership type on nursing home outcomes

Abstract

This paper examines the sorting of residents between for-profit and nonprofit nursing homes and the health outcomes of those residents conditional on ownership type. Using data from the 1987 National Medical Expenditure Survey, we find evidence of systematic sorting of residents by ownership type, and significant effects of ownership type on outcomes. These results are broadly consistent with the hypothesis that for-profit and nonprofit homes exploit their informational advantages to differing extents in a market characterized by asymmetric information.

Do non-profit nursing homes separate governance roles?

“…As, at least in Belgium (Flanders), elderly people tend to prefer to remain in the same location where they used to live, this seems a reasonable measure. Following Spector et al [18] we do not expect an important effect of competition, due to asymmetric information problems concerning quality of care and the fact that there is little movement of residents among homes. Our dummy URBAN indicates whether a nursing home is situated in a larger city.…”

“…So far not much is known about whether or not non-profits actually adjust their governance system as a function of their size. Second, the type of owner, in particular private owner versus government, has been shown to affect many aspects of governance [17][18][19][20][21][22][23]. Finally, next to the private/government aspect of ownership we also evaluate whether or not belonging to a group of health care institutions affects the governance aspects studied in this paper.…”

Medicaid Reimbursement and the Quality of Nursing Home Care: A Case Study of Medi-Cal Long-Term Care Reimbursement Act of 2004 in California

“…However, non-profit organizations usually pursue multiple objectives including quality and quantity, subject to no-loss constraint [110,[120][121]. In contrast to the profit distribution to shareholders in the for-profit organizations, the profit can be used for quality-enhancing investment in the non-profit organizations [110,122].…”

Asymmetric information, ownership and quality of care: an empirical analysis of nursing homes

“…Therefore, consumers who have difficulty monitoring the quality of service will prefer to choose nonprofit organizations to avoid losses from informational handicaps. If it is true that nonprofit homes disproportionately attract those who are frail and incapable of monitoring quality of care (Spector et al, 1998), this selection bias will work against the result that nonprofit homes provide better quality of service. existence of asymmetric information, Z a vector of other explanatory variables described in the previous section, and T includes a series of year dummies.…”