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Efficiency evaluation of skilled nursing facilities

Y A Ozcan1, S E Wogen, L W Mau

  • 1Department of Health Administration, Virginia Commonwealth University, Richmond 23298-0203, USA.

Journal of Medical Systems
|August 5, 1998
PubMed
Summary
This summary is machine-generated.

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Nonprofit and for-profit nursing homes show different production methods, with for-profits being more efficient. Larger facilities also outperform smaller ones, highlighting potential cost savings through imitation of efficient skilled nursing facilities.

Area of Science:

  • Healthcare Management
  • Health Services Research
  • Operations Research

Background:

  • Skilled nursing facilities (SNFs) are crucial for post-acute care.
  • Variations in technical efficiency among SNFs can impact care quality and costs.
  • Understanding factors influencing SNF efficiency is vital for policy and practice.

Purpose of the Study:

  • To determine technical efficiency in U.S. skilled nursing facilities using Data Envelopment Analysis (DEA).
  • To identify differences in production modes and efficiency between nonprofit and for-profit SNFs.
  • To explore the impact of facility size, ownership, patient mix, and regional characteristics on SNF efficiency.

Main Methods:

  • Employed Data Envelopment Analysis (DEA) on a 10% national sample of 324 skilled nursing facilities.

Related Experiment Videos

  • Stratified facilities by ownership (nonprofit vs. for-profit) and size clusters.
  • Utilized logistic regression to analyze factors influencing efficiency, controlling for size and ownership.

    • Main Results:

    • For-profit SNFs demonstrated higher technical efficiency (0.86 times) than the most efficient nonprofit homes.
    • Larger SNFs were more efficient (0.89 times) than smaller facilities, indicating differing production goals.
    • Higher Medicare patient percentages correlated with lower efficiency, while higher occupancy and Medicaid patient percentages increased efficiency.

    Conclusions:

    • Significant differences in production goals and technologies exist between nonprofit and for-profit SNFs, and between large and small facilities.
    • Reimbursement policies should consider organizational goals influenced by size and ownership differentials.
    • Substantial efficiency variations suggest significant cost-saving potential through adopting best practices from efficient SNFs.