Cost implications of organizing nursing home workforce in teams

To estimate the costs associated with formal and self-managed daily practice teams in nursing homes.

Medicaid cost reports for 135 nursing homes in New York State in 2006 and survey data for 6,137 direct care workers.

A retrospective statistical analysis: We estimated hybrid cost functions that include team penetration variables. Inference was based on robust standard errors.

Formal and self-managed team penetration (i.e., percent of staff working in a team) were calculated from survey responses. Annual variable costs, beds, case mix-adjusted days, admissions, home care visits, outpatient clinic visits, day care days, wages, and ownership were calculated from the cost reports.

Formal team penetration was significantly associated with costs, while self-managed teams penetration was not. Costs declined with increasing penetration up to 13 percent of formal teams, and increased above this level. Formal teams in nursing homes in the upward sloping range of the curve were more diverse, with a larger number of participating disciplines and more likely to include physicians.

Organization of workforce in formal teams may offer nursing homes a cost-saving strategy. More research is required to understand the relationship between team composition and costs.