Certificate of need and the cost of competition in home healthcare markets.

We used 2010-16 Medicare Cost Reports for 10,737 freestanding home health agencies (HHAs) to examine the impact of home health (HH) and nursing home (NH) certificate-of-need (CON) laws on HHA caseload, total and per-patient variable costs. After adjusting for other HHA characteristics, total costs were higher in states with only HH CON laws ($2,975,698), only NH CON laws ($1,768,097), and both types of laws ($3,511,277), compared with no CON laws ($1,538,536). Higher costs were driven by caseloads, as CON reduced per-patient costs. Additional research is needed to distinguish whether this is due to skimping on quality vs. economies of scale.

Moving organizational theory in health care forward: A discussion with suggestions for critical advancements.

In May 2019, scholars in management and organization of health care organizations and systems met. The opening plenary was a moderated discussion with five distinguished scholars who have exemplified pushing the frontier of organizational theory and practice throughout their careers: Ann Barry Flood of Dartmouth College, John Kimberly of the University of Pennsylvania, Anthony (Tony) Kovner of New York University, Stephen (Steve) Shortell of University of California at Berkeley, and Jacqueline (Jackie) Zinn of Temple University. The discussion was moderated by Ingrid Nembhard of the University of Pennsylvania. The goal of the plenary was to provide an opportunity to hear from senior members of the health care management community how they think about organizational behavior and theory, changes that they have observed, research gaps that they see, and lessons for research and practice that they have learned. This article is the transcript of that plenary discussion. It is shared to capture the intellectual history of the field and help surface the critical advancements still needed in organizational theory and practice in health care. The closing remarks of the panelists summarize recommendations for both practice and scholarship in health care organization management.

Home Health Care Quality, Its Costs and Implications for Home Health Value-Based Purchasing.

The Home Health Value-based Purchasing (HHVBP) demonstration, incorporating a payment formula designed to incentivize both high-quality care and quality improvement, is expected to become a national program after 2022, when the demonstration ends. This study investigated the relationship between costs and several quality dimensions, to inform HHVBP policy. Using Medicare cost reports, OASIS and Home Health Compare data for 7,673 home health agencies nationally, we estimated cost functions with instrumental variables for quality. The estimated net marginal costs varied by composite quality measure, baseline quality, and agency size. For four of the five composite quality measures, the net marginal cost was negative for low-quality agencies, suggesting that quality improvement was cost saving for this agency type. As the magnitude of the net marginal cost is commensurate with the payment incentive planned for HHVBP, it should be considered when designing the incentives for HHVBP, to maximize their effectiveness.

Identifying Associations between Quality Initiatives and Quality Measures among Home Health Agencies: Findings from a National Study.

Home health performance gained visibility with the publication of Home Health Compare and the Home Health Value-Based Payment demonstration. Both provide incentives for home health agencies (HHA) to invest in quality improvements. The objective of this study is to identify the association between quality initiatives adopted by HHAs and improved performance. A 2018 national survey of 7459 HHAs, yielding a sample of 1192 eligible HHAs, provided information about 23 quality initiatives, which was linked to 5 composite Super Quality Measures (SQMs): ADL/pain, self-treatment, timely care, hospitalizations, and patient experience. Exclusions for missing data and outliers yielded a final analytical sample of 903 HHAs. Regression models estimated associations between quality initiatives and SQMs. The relationships between sixteen of the SQM/quality initiative pairs were positively associated with improvement and 7 were negatively associated. Web-based technologies for staff and care-givers improved performance but deteriorated patient experience. Web support-groups for staff and review of HHC rankings reduced hospitalization rates. While this study offers insights for quality improvement, a limitation may be a lack of sensitivity to the nuances of quality improvement implementation. Therefore, this study should be viewed as hypothesis-generating concerning initiatives likely to have the greatest potential meriting further investigation.

Factors influencing nursing home response to quality measure publication: A resource dependence perspective.

BACKGROUND: The Centers for Medicare and Medicaid Services provides a report card on nursing homes at a Web site called Nursing Home Compare (NHC) that includes information on 19 clinical quality measures (QMs). The information is intended to inform consumer choice, to provide a focus for state regulatory initiatives, and to promote nursing home quality improvement efforts. PURPOSE: This study aimed to determine what factors were associated with nursing homes' investment in quality after publication of the NHC report card. METHODOLOGY: A 2007 survey sent to nursing home administrators nationally inquired about their response to publication of QMs on NHC. Survey data were merged with data on QMs and organizational characteristics from NHC. The dependent variables represent actions requiring a significant investment of resources in staffing and/or equipment. Independent variables tested hypotheses regarding the influence of constituent groups, competition, and managed care participation on investment. We estimated logistic regression models adjusting for clustering within states. FINDINGS: The degree to which nursing homes perceive that the report card influences key constituencies (professional referral sources, consumers, and state surveyors) is associated with the odds of committing substantial resources to improve report card performance. Facilities with lower reported QM scores were three times more likely to make certain investments than high-quality facilities in competitive markets. Perceived QM validity and close monitoring of scores also motivates investment. PRACTICE IMPLICATIONS: A substantial proportion of nursing homes now perceive that the report card influences professional referrals, consumer choice, and state survey investigatory process. This suggests that QM publication may indeed have a competitive impact as it concerns these constituencies, thus increasing the stakes in improving the scores and making substantial investments much more likely.

Strategic orientation and nursing home response to public reporting of quality measures: an application of the miles and snow typology.

OBJECTIVE: To assess whether differences in strategic orientation of nursing homes as identified by the Miles and Snow typology are associated with differences in their response to the publication of quality measures on the Nursing Home Compare website. DATA SOURCES: Administrator survey of a national 10 percent random sample (1,502 nursing homes) of all facilities included in the first publication of the Nursing Home Compare report conducted in May-June 2004; 724 responded, yielding a response rate of 48.2 percent. STUDY DESIGN: The dependent variables are dichotomous, indicating whether or not action was taken and the type of action taken. Four indicator variables were created for each of the four strategic types: Defender, Analyzer, Prospector, and Reactor. Other variables were included in the seven logistic regression models to control for factors other than strategic type that could influence nursing home response to public disclosure of their quality of care. DATA COLLECTION/EXTRACTION METHODS: Survey data were merged with data on quality measures and organizational characteristics from the first report (November 2002). PRINCIPAL FINDINGS: About 43 percent of surveyed administrators self-typed as Defenders, followed by Analyzers (33 percent), and Prospectors (19 percent). The least self-selected strategic type was the Reactor (6.6 percent). In general, results of the regression models indicate differences in response to quality measure publication by strategic type, with Prospectors and Analyzers more likely, and Reactors less likely, to respond than Defenders. CONCLUSIONS: While almost a third of administrators took no action at all, our results indicate that whether, when, and how nursing homes reacted to publication of federally reported quality measures is associated with strategic orientation.

Doing better to do good: the impact of strategic adaptation on nursing home performance.

OBJECTIVE: To test the hypothesis that a greater commitment to strategic adaptation, as exhibited by more extensive implementation of a subacute/rehabilitation care strategy in nursing homes, will be associated with superior performance. DATA SOURCES: Online Survey, Certification, and Reporting (OSCAR) data from 1997 to 2004, and the area resource file (ARF). STUDY DESIGN: The extent of strategic adaptation was measured by an aggregate weighted implementation score. Nursing home performance was measured by occupancy rate and two measures of payer mix. We conducted multivariate regression analyses using a cross-sectional time series generalized estimating equation (GEE) model to examine the effect of nursing home strategic implementation on each of the three performance measures, controlling for market and organizational characteristics that could influence nursing home performance. DATA COLLECTION/ABSTRACTION METHODS: OSCAR data was merged with relevant ARF data. PRINCIPAL FINDINGS: The results of our analysis provide strong support for the hypothesis. CONCLUSIONS: From a theoretical perspective, our findings confirm that organizations that adjust strategies and structures to better fit environmental demands achieve superior performance. From a managerial perspective, these results support the importance of proactive strategic leadership in the nursing home industry.

Nursing homes' response to the nursing home compare report card.

OBJECTIVE: The Centers for Medicare and Medicaid Services have recently begun publishing the Nursing Home Compare report card. The objective of this study was to examine the initial reactions of nursing homes to publication of the report card and to evaluate the impact of the report card on quality-improvement activities. METHODS: We conducted a survey of a random national sample of 1,502 nursing home administrators; 724 responded. We analyzed frequency of responses to questions regarding views of the quality measures and actions taken. RESULT: A model of nursing homes' behavior predicted that the report card would provide an incentive for facilities to improve quality. A majority of facilities (69%) reported reviewing their quality scores regularly, and many have taken specific actions to improve quality. Homes with poor quality scores were more likely to take actions following the publication of the report card. DISCUSSION: These findings suggest that the Nursing Home Compare report card has the potential to positively affect nursing home quality.

Hospital inefficiency: what is the impact of membership in different types of systems?

The primary objective of this study is to assess whether systematic differences in inefficiency are associated with hospital membership in different types of systems. We employed the Battese/Coelli simultaneous stochastic frontier analysis (SFA) technique to estimate hospital cost inefficiency. Mean estimated inefficiency was 8.42%. Membership in different types of systems was related to estimated cost inefficiency (p < .05). Compared to hospitals that were members of centralized health systems, membership in centralized physician/insurance or decentralized systems was associated with decreased inefficiency; membership in independent systems was associated with increased inefficiency.

Reducing Hospital Readmissions Through Preferred Networks Of Skilled Nursing Facilities.

Establishing preferred provider networks of skilled nursing facilities (SNFs) is one approach hospital administrators are using to reduce excess thirty-day readmissions and avoid Medicare penalties or to reduce beneficiaries' costs as part of value-based payment models. However, hospitals are also required to provide patients at discharge with a list of Medicare-eligible providers and cannot explicitly restrict patient choice. This requirement complicates the development of a SNF network. Furthermore, there is little evidence about the effectiveness of network development in reducing readmission rates. We used a concurrent mixed-methods approach, combining Medicare claims data for the period 2009-13 with qualitative data gathered from interviews during site visits to hospitals in eight US markets in March-October 2015, to examine changes in rehospitalization rates and differences in practices between hospitals that did and did not develop formal SNF networks. Four hospitals had developed formal SNF networks as part of their care management efforts. These hospitals saw a relative reduction from 2009 to 2013 in readmission rates for patients discharged to SNFs that was 4.5 percentage points greater than the reduction for hospitals without formal networks. Interviews revealed that those with networks expanded existing relationships with SNFs, effectively managed patient data, and exercised a looser interpretation of patient choice.

The use of contract licensed nursing staff in U.S. nursing homes.

The extent to which nursing homes rely on the use of contracted licensed staff, factors associated with this staffing practice, and the resultant effect on the quality of resident care has received little public attention. Merging the On-line Survey Certification and Reporting System database with the Area Resource File from 1992 through 2002, the authors regressed organizational and market-level variables on the use of 5 percent or more contract full-time equivalent registered nurses and licensed practical nurses. Since 1997, the proportion of facilities using 5 percent or more contract licensed staff more than tripled. Use of contract nurses was associated with more deficiency citations, characteristics of poorer facilities, and tight labor markets. Nursing homes increasingly rely on contract nurses. The failure of nursing homes to attract and retain a competent, stable workforce creates a vicious cycle of staffing practices, which may lead to decline in quality of care.

The Impact of Certificate-of-Need Laws on Nursing Home and Home Health Care Expenditures.

Over the past two decades, nursing homes and home health care agencies have been influenced by several Medicare and Medicaid policy changes including the adoption of prospective payment for Medicare-paid postacute care and Medicaid-paid long-term home and community-based care reforms. This article examines how spending growth in these sectors was affected by state certificate-of-need (CON) laws, which were designed to limit the growth of providers and have remained unchanged for several decades. Compared with states without CON laws, Medicare and Medicaid spending in states with CON laws grew faster for nursing home care and more slowly for home health care. In particular, we observed the slowest growth in community-based care in states with CON for both the nursing home and home health industries. Thus, controlling for other factors, public postacute and long-term care expenditures in CON states have become dominated by nursing homes.

Correlates of hospital provision of prevention and health promotion services.

This study investigates the factors associated with hospital provision of prevention and health promotion services. The authors conceptualize the provision of these services as a hospital response to the community health concerns of environmental stakeholders. The response depends on hospital recognition and interpretation of institutional and resource dependence pressures and is related to interorganizational linkages, resource dependencies, and information processing structure. Data for the study came from 3,453 U.S. hospitals. The authors found that hospital provision of prevention and health promotion services is positively related to alliance and network membership, the diffusion of such services among other area hospitals, the use of community health status information, and hospital size. Also, for-profit hospitals provide fewer prevention and health promotion services than not-for-profit hospitals. These findings have policy and management implications.

The impact of the prospective payment system for skilled nursing facilities on therapy service provision: a transaction cost approach.

OBJECTIVE: To examine skilled nursing facilities (SNFs) "make-or-buy" decisions with respect to rehabilitation therapy service provision in the 1990s, both before and after implementation of Medicare's Prospective Payment System (PPS) for SNFs. DATA SOURCES: Longitudinal On-line Survey Certification and Reporting (OSCAR) data (1992-2001) on a sample of 10,241 freestanding urban SNFs. STUDY DESIGN: We estimated a longitudinal multinomial logistic regression model derived from transaction cost economic theory to predict the probability of the outcome in each of four service provision categories (all employed staff, all contract, mixed, and no services provided). PRINCIPAL FINDINGS: Transaction frequency, uncertainty, and complexity result in greater control over therapy services through employment as opposed to outside contracting. For-profit status and chain affiliation were associated with greater control over therapy services. Following PPS, nursing homes acted to limit transaction costs by either exiting the rehabilitation market or exerting greater control over therapy services by managing rehabilitation services in-house. CONCLUSIONS: The financial incentives associated with changes in reimbursement methodology have implications that extend beyond the boundaries of the health care industry segment directly affected. Unintended quality and access consequences need to be carefully monitored by the Medicare program.

An exploration of job, organizational, and environmental factors associated with high and low nursing assistant turnover.

PURPOSE: This article examines factors that distinguish nursing facilities with very high and very low nursing assistant turnover rates from a middle referent group, exploring the possibility that high and low turnover are discrete phenomena with different antecedents. DESIGN AND METHODS: Data from a stratified sample of facilities in eight states, with directors of nursing as respondents (N = 288), were merged with facility-level indicators from the On-Line Survey Certification of Automated Records and county-level data from the Area Resource File. Multinominal logistic regression was used to identify factors associated with low (less than 6.6% in 6 months) and high (more than 64% in 6 months) turnover rates. RESULTS: With the exception of registered nurse turnover rate, low turnover and high turnover were not associated with the same factors. IMPLICATIONS: Future studies of facility turnover should avoid modeling turnover as a linear function of a single set of predictors in order to provide clearer recommendations for practice.

Post-acute integration strategies in an era of accountability.

The Institute of Medicine, in its 2001 Crossing the Quality Chasm report, recommended greater integration and coordination as a component of a transformed health care system, yet relationships between acute and post-acute providers have remained weak. With payment reforms that hold hospitals and health systems accountable for the total costs of care and readmissions, the dynamic between acute and post-acute providers is changing. In this article, we outline the internal and market factors that will drive health systems' decisions about whether and how they integrate with post-acute providers. Enhanced integration between acute and post-acute providers should reduce variation in post-acute spending.

The impact of hospital-based skilled nursing facility closures on rehospitalizations.

OBJECTIVE: To examine the effect of reductions in hospital-based (HB) skilled nursing facility (SNF) bed supply on the rate of rehospitalization of patients discharged to any SNF from zip codes that lost HB beds. DATA SOURCE: We used Medicare enrollment records, Medicare hospital and SNF claims, and nursing home Minimum Dataset assessments and characteristics (OSCAR) to examine nearly 10 million Medicare fee-for-service hospital discharges to SNFs between 1999 and 2006. STUDY DESIGN: We calculated the number of HB and freestanding (FS) SNF beds within a 22 km radius from the centroid of all zip codes in which Medicare beneficiaries reside in all years. We examined the relationship between HB and FS bed supply and the rehospitalization rates of the patients residing in corresponding zip codes in different years using zip code fixed effects and instrumental variable methods including extensive sensitivity analyses. PRINCIPAL FINDINGS: Our estimated coefficients suggest that closure of 882 HB homes during our study period resulted in 12,000-18,000 extra rehospitalizations within 30 days of discharge. The effect was largely concentrated among the most acutely ill, high-need patients. CONCLUSIONS: SNF patient-based prospective payment resulted in closure of higher cost HB facilities that had served most postacute patients. As other, less experienced SNFs replaced HB facilities, they were less able to manage high acuity patients without rehospitalizing them.

Effect of hospital-SNF referral linkages on rehospitalization.

OBJECTIVE: To determine whether the rate of rehospitalization is lower among patients discharged to skilled nursing facilities (SNFs) with which a hospital has a strong linkage. DATA SOURCES/COLLECTION: We used national Medicare enrollment, claims, and the Minimum Data Set to examine 2.8 million newly discharged patients to 15,063 SNFs from 2,477 general hospitals between 2004 and 2006. STUDY DESIGN: We examined the relationship between the proportion of discharges from a hospital and alternative SNFs on the rehospitalization of patients treated by that hospital-SNF pair using an instrumental variable approach. We used distances to alternative SNFs from residence of the patients of the originating hospital as the instrument. PRINCIPAL FINDINGS: Our estimates suggest that if the proportion of a hospital's discharges to an SNF was to increase by 10 percentage points, the likelihood of patients treated by that hospital-SNF pair to be rehospitalized within 30 days would decline by 1.2 percentage points, largely driven by fewer rehospitalizations within a week of hospital discharge. CONCLUSIONS: Stronger hospital-SNF linkages, independent of hospital ownership, were found to reduce rehospitalization rates. As hospitals are held accountable for patients' outcomes postdischarge under the Affordable Care Act, hospitals may steer their patients preferentially to fewer SNFs.