Nursing home costs and quality of care: is there a tradeoff?

Nursing homes are facing increased environmental pressures to improve quality of care. However, this increased emphasis on quality comes at a time when nursing homes are facing revenue constraints as a result of the repeal of the Boren amendment, increased reimbursement based on prospective payment systems and widespread cuts to state Medicaid funding. This represents a strong financial incentive to control costs and there are concerns that these cost-containment measures may lead to a lower quality of care in nursing homes. In this article, the scientific literature on the cost-quality relationship in the nursing home industry is reviewed.