Performing well on nursing home report cards: does it pay off?

Area of Science:

• Health Services Research
• Healthcare Economics
• Quality Improvement

Background:

• Public reporting of nursing home quality measures aims to inform consumers and incentivize providers.
• The economic impact of public reporting on nursing home financial performance remains an area of investigation.

Purpose of the Study:

• To determine if high performance or improvement in quality measures translates to economic rewards for nursing homes following the implementation of public reporting.

Main Methods:

• Analysis of data from 6,286 Medicare-certified nursing homes (1999-2005) using Medicare Cost Reports, Minimum Data Set, and Online Survey and Certification Reporting System.
• A facility-level fixed-effects model compared financial outcomes (revenues, expenses, profit margins) before (1999-2002) and after (2003-2005) public reporting initiation.
• Effects were analyzed separately based on performance levels and improvement over time.

Main Results:

• Nursing homes demonstrating improvement in publicly reported quality measures experienced increased revenues and higher profit margins post-reporting.
• These financial gains were largely attributed to a rise in Medicare admissions.
• Facilities with high initial performance showed similar trends, although these were not statistically significant.

Conclusions:

• Improving performance under public reporting can yield economic returns for nursing homes, justifying investments in quality enhancement.
• Public reporting may foster a business case for quality improvement within the nursing home sector.