A model to assess the quality-cost tradeoff in nursing homes

We develop a model for assessing quality-cost tradeoffs as they arise in nurse staffing and task assignment decisions commonly faced by nursing home administrators and industry regulators. As prospective reimbursement schemes and resource utilization groups (RUGs) are implemented, we expect that tradeoffs such as these will become even more critical than they are now. The model permits the inclusion of quality-related considerations, such as restricting tasks to personnel at specified skill levels, requiring minimum staff levels at each skill level, and selective raising of wage rates. The model is also sensitive to changes in patient needs, labor availability, and technological innovations, permitting its use for general staffing purposes. Because it utilizes linear programming techniques, standard computer software can be used to find solutions very quickly, even on a small personal computer. We describe the application of this model to a nursing home in upstate New York, but the procedure is widely applicable to other health care facilities.