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Does prospective payment encourage nursing home efficiency?

H L Smith, M D Fottler, B O Saxberg

    Evaluation & the Health Professions
    |May 10, 1985
    PubMed
    Summary
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    Management control practices improve nursing home efficiency, especially under prospective reimbursement policies. This study highlights how better controls enhance financial performance in healthcare organizations.

    Area of Science:

    • Healthcare Management
    • Organizational Performance
    • Reimbursement Policies

    Background:

    • Third-party reimbursement policies significantly impact healthcare organization performance.
    • Prospective reimbursement, specifically, influences cost control and net income.
    • Healthcare organizations face pressure to optimize performance under evolving payment models.

    Purpose of the Study:

    • To examine the effect of management control practices on healthcare organization performance.
    • To investigate the relationship between prospective reimbursement and organizational efficiency.
    • To understand the implications of management control for healthcare organizations operating under prospective payment systems.

    Main Methods:

    • The study analyzed nursing homes to assess management control practices.

    Related Experiment Videos

  • Quantitative analysis was employed to evaluate the association between control practices and performance.
  • The research focused on identifying factors contributing to efficient performance.

    • Main Results:

    • Management control practices were found to be a significant contributor to efficient performance in nursing homes.
    • A positive correlation exists between effective management controls and improved organizational efficiency.
    • The findings suggest that robust control systems enhance the ability to achieve low costs and high net income.

    Conclusions:

    • Management control practices are crucial for enhancing efficiency in healthcare organizations, particularly nursing homes.
    • Prospective reimbursement policies can incentivize the adoption of better management controls.
    • Implementing effective control strategies is vital for healthcare organizations to thrive under prospective payment environments.