Why nonprofit nursing homes pay higher nurses' salaries

Area of Science:

• Healthcare Management
• Nursing Home Administration
• Quality of Care Research

Background:

• Nonprofit nursing homes are generally perceived as more costly than for-profit facilities.
• This higher cost is often attributed to increased employee wages and higher staff-to-patient ratios.

Purpose of the Study:

• To investigate the relationship between higher costs in nonprofit nursing homes and the quality of care provided.
• To determine if differences in nurse characteristics explain wage variations between nonprofit and for-profit nursing homes.

Main Methods:

• Utilized data from the 1985 National Nursing Home Survey.
• Analyzed characteristics of nurses employed in nonprofit versus for-profit nursing homes.
• Examined the correlation between nurse characteristics, wages, and facility type.

Main Results:

• Identified distinct characteristics between nurses in nonprofit and for-profit nursing homes.
• Demonstrated that these nurse characteristic differences account for observed wage differentials.
• Found that higher wages in nonprofit homes are linked to specific nurse attributes.

Conclusions:

• The higher costs associated with nonprofit nursing homes may be linked to higher quality of care.
• Differences in nurse characteristics are a significant factor in explaining wage disparities.
• Findings support the hypothesis that nonprofit nursing homes offer a higher quality of care.