Contextual determinants of US nursing home racial/ethnic diversity.

We hypothesized that for-profit/chain affiliated nursing homes, those in states with higher Medicaid reimbursement, and those in more competitive markets would have greater resident racial/ethnic diversity than nursing homes not meeting these criteria. Using 2004 Online Survey, Certification and Reporting data, Minimum Data Set, Lewis Mumford Center for Comparative Urban and Regional Research data, and the Area Resource File, we included U.S. Medicare/Medicaid certified nursing homes (N = 8950) located in 310 Metropolitan Statistical Areas. The dependent variable quantified facility-level multiracial diversity. Ordinary least squares regression showed support for the hypothesized relationships: for-profit/chain affiliated nursing homes were more diverse than nursing homes in all other ownership/chain member categories, while higher Medicaid per-diem rates, greater residential diversity, and stronger market competition were also positively associated with nursing home racial/ethnic composition. Results suggest there is room for policy changes to achieve equitable access to all levels of nursing home services for minority elders.

Nursing home quality and financial performance: does the racial composition of residents matter?

OBJECTIVE: To examine the effects of the racial composition of residents on nursing homes' financial and quality performance. The study examined Medicare and Medicaid-certified nursing homes across the United States that submitted Medicare cost reports between the years 1999 and 2004 (11,472 average per year). DATA SOURCE: Data were obtained from the Minimum Data Set, the On-Line Survey Certification and Reporting, Medicare Cost Reports, and the Area Resource File. STUDY DESIGN: Panel data regression with random intercepts and negative binomial regression were conducted with state and year fixed effects. PRINCIPAL FINDINGS: Financial and quality performance differed between nursing homes with high proportions of black residents and nursing homes with no or medium proportions of black residents. Nursing homes with no black residents had higher revenues and higher operating margins and total profit margins and they exhibited better processes and outcomes than nursing homes with high proportions of black residents. CONCLUSION: Nursing homes' financial viability and quality of care are influenced by the racial composition of residents. Policy makers should consider initiatives to improve both the financial and quality performance of nursing homes serving predominantly black residents.

Private equity ownership and nursing home financial performance.

BACKGROUND: Private equity has acquired multiple large nursing home chains within the last few years; by 2009, it owned nearly 1,900 nursing homes. Private equity is said to improve the financial performance of acquired facilities. However, no study has yet examined the financial performance of private equity nursing homes, ergo this study. PURPOSE: The primary purpose of this study is to understand the financial performance of private equity nursing homes and how it compares with other investor-owned facilities. It also seeks to understand the approach favored by private equity to improve financial performance-for instance, whether they prefer to cut costs or maximize revenues or follow a mixed approach. METHODOLOGY/APPROACH: Secondary data from Medicare cost reports, the Online Survey, Certification and Reporting, Area Resource File, and Brown University's Long-term Care Focus data set are combined to construct a longitudinal data set for the study period 2000-2007. The final sample is 2,822 observations after eliminating all not-for-profit, independent, and hospital-based facilities. Dependent financial variables consist of operating revenues and costs, operating and total margins, payer mix (census Medicare, census Medicaid, census other), and acuity index. Independent variables primarily reflect private equity ownership. The study was analyzed using ordinary least squares, gamma distribution with log link, logit with binomial family link, and logistic regression. FINDINGS: Private equity nursing homes have higher operating margin as well as total margin; they also report higher operating revenues and costs. No significant differences in payer mix are noted. PRACTICE IMPLICATIONS: Results suggest that private equity delivers superior financial performance compared with other investor-owned nursing homes. However, causes for concern remain particularly with the long-term financial sustainability of these facilities.

Nursing home financial performance: the role of ownership and chain affiliation.

BACKGROUND: The nursing home industry serves one of the most vulnerable populations, and its financial sustainability is a matter of public concern. However, limited empirical evidence exists on the impact of ownership and chain affiliation on nursing home financial performance. PURPOSES: The aim of this study was to examine the joint effects of ownership and chain affiliation on the financial performance of the nursing home industry for the study period 1999-2004 on a national sample of 11,236 nursing homes per year. METHODOLOGY/APPROACH: Data included the Medicare Cost Reports; the Online Survey, Certification, and Reporting file; and the Area Resource File. Dependent variables included operating and total margins. Independent variables included four ownership/chain affiliation combinations: for-profit chain, for-profit independent, not-for-profit chain, and not-for-profit independent. Random effects generalized least square regressions were performed. FINDINGS: Results show that for-profit nursing homes delivered better financial performance than not-for-profit facilities did across both operating and total margins. However, the relationship between chain affiliation and financial performance was more nuanced. In the case of operating margin, chain-affiliated facilities delivered superior financial performance irrespective of ownership type; however, in the case of total margin, independents outperformed chain-affiliated facilities among for-profits. PRACTICE IMPLICATIONS: Our findings show an interactive effect of ownership and chain affiliation on nursing home financial performance, suggesting the pursuit of different organizational strategies by different ownership/chain affiliation subgroups (for-profit chain, for-profit independent, not-for-profit chain, and not-for-profit independent), with implications for financial performance. For-profit independent nursing homes managed to be the top performing group in terms of overall financial despite the operating financial advantage of for-profit chain-affiliated nursing homes. Similarly, not-for-profit independent nursing homes and not-for-profit chain homes had comparable overall financial performance despite the operating financial advantage of chain homes.