Nursing Home Quality, Chain Affiliation, Profit Status and Performance

This article is the winner of the Seniors Housing category (sponsored by the National Investment Council for Seniors Housing) awarded at the 2002 American Real Estate Society Annual Meeting.This study uses Florida nursing home data to examine several issues about the efficiency of nursing homes. Chain affiliation is examined as is profit status. For the first time quality of care is also included, due to the uniqueness of the data which contains quality scores. Without controlling for quality, for-profit firms and chain affiliated firms are shown to be slightly more efficient than their independent and non-profit counterparts. However, chain affiliated firms scored lower on quality than independents and for-profit firms scored lower on quality than non-profit firms. When controlling for quality, the profit status of the firm and room utilization rates are positively related to efficiency. However, in the presence of the quality control variable, there is not evidence to suggest that chain affiliation impa...