Does Nonprofit Ownership Matter for Firm Performance? Financial Distress and Ownership Conversion of Nursing Homes

2021 ◽  
Author(s):  
Lauren Xiaoyuan Lu ◽  
Susan Feng Lu
Keyword(s):  
Nursing Home ◽  
Nursing Homes ◽  
Financial Performance ◽  
Financial Distress ◽  
Cost Reduction ◽  
Registered Nurse ◽  
Nurse Staffing ◽  
Healthcare Management ◽  
Operating Costs ◽  
Operating Efficiency

In the past two decades, many nursing homes converted their ownership status from nonprofit to for-profit (NP-to-FP). These conversions have drawn public scrutiny and triggered a debate about the implications of ownership conversions on nursing home performance. Exploring a nationwide panel data set of U.S. nursing homes from 2006 to 2017, we observe that nursing homes with higher financial distress are associated with higher likelihood of NP-to-FP conversions. The postconversion operating margins increased significantly. Converted nursing homes improved their financial performance by reducing operating costs while keeping net resident revenues unchanged. Both cutting registered nurse staffing and cutting overhead staffing contributed to reductions in operating costs; however, only the former cost-reduction measure had a negative impact on quality. On average, the postconversion quality of care declined. The effects of NP-to-FP conversions on nursing homes were moderated by preconversion financial distress: High-distress nursing homes aggressively cut registered nurse staffing and experienced severe quality decline, whereas low-distress ones kept registered nurse staffing unchanged and largely avoided quality decline. These findings lead to both policy and managerial insights. To nursing home regulators, we recommend increased oversight on NP-to-FP conversions of nursing homes with high preconversion financial distress. To managers of nursing homes undergoing NP-to-FP conversions, our findings suggest that although cost reduction is an effective strategy to improve financial performance, they need to avoid the pitfall of cutting registered nurse staffing and instead focus on streamlining overhead operations in order to increase operating efficiency without compromising quality. This paper was accepted by Stefan Scholtes, healthcare management.

scholarly journals THE IMPACT OF CULTURE CHANGE ON FINANCIAL PERFORMANCE OF HIGH MEDICAID NURSING HOMES

2019 ◽  
Vol 3 (Supplement_1) ◽  
pp. S156-S156
Author(s):  
Justin C Lord ◽  
Ganisher K Davlyatov ◽  
Akbar Ghiasi ◽  
Robert Weech-Maldonado
Keyword(s):  
Nursing Home ◽  
Nursing Homes ◽  
Financial Performance ◽  
Culture Change ◽  
Market Competition ◽  
Profit Margin ◽  
Organizational Level ◽  
Poverty Level ◽  
The Impact ◽  
The Relationship

Abstract This study examines the association between culture change artifacts and financial performance among under-resourced nursing homes (70% or higher Medicaid census). Culture change represents a transformational process to become person-centered, through staff and resident empowerment. Cultural artifacts represent the physical evidences that culture change is occurring. In this study, we focus on the workplace (nurse staffing consistent assignments) and leadership (residents engagement) artifacts to assess the relationship between culture change practices and performance. Survey data came from 387 nursing home directors from 2016- 2018, merged with secondary data from LTCFocus, Area Health Resource File, and Medicare Cost Reports. The dependent variable consisted of the total profit margin (%), while the independent variables comprised composite scores for leadership (0-25) and workplace artifacts (0-15). Control variables included organizational-level (ownership, chain affiliation, size, occupancy rate, and Medicare and Medicaid payer mix), and county-level factors (Medicare Advantage penetration, per capita income, educational level, unemployment rate, poverty level and competition). Multivariate regression was used to model the relationship between cultural change artifacts and financial performance. Workplace artifacts in nursing homes were found to be associated with significantly higher profit margin (β = 0.30, p < 0.05), while leadership artifacts were not. Culture change practices aimed at improving nursing staff consistent assignments are associated with better financial performance. Given increasing nursing home market competition and declining resources for high Medicaid nursing homes, facilities with a greater emphasis on workplace culture may be able to perform better financially among these under-resourced facilities.

scholarly journals Appropriate Nurse Staffing Levels for U.S. Nursing Homes

2020 ◽  
Vol 13 ◽  
pp. 117863292093478 ◽  
Author(s):  
Charlene Harrington ◽  
Mary Ellen Dellefield ◽  
Elizabeth Halifax ◽  
Mary Louise Fleming ◽  
Debra Bakerjian
Keyword(s):  
Nursing Home ◽  
Nursing Homes ◽  
Nursing Staff ◽  
Nurse Staffing ◽  
Well Being ◽  
Data Sources ◽  
Care Needs ◽  
Staffing Levels ◽  
Nursing Staffing ◽  
Adequate Staffing

US nursing homes are required to have sufficient nursing staff with the appropriate competencies to assure resident safety and attain or maintain the highest practicable level of physical, mental, and psychosocial well-being of each resident. Minimum nurse staffing levels have been identified in research studies and recommended by experts. Beyond the minimum levels, nursing homes must take into account the resident acuity to assure they have adequate staffing levels to meet the needs of residents. This paper presents a guide for determining whether a nursing home has adequate and appropriate nurse staffing. We propose five basic steps to: (1) determine the collective resident acuity and care needs, (2) determine the actual nurse staffing levels, (3) identify appropriate nurse staffing levels to meet residents care needs, (4) examine evidence regarding the adequacy of staffing, and (5) identify gaps between the actual staffing and the appropriate nursing staffing levels based on resident acuity. Data sources and specific methodologies are analyzed, compared, and recommended. The goal is to assist nursing home nurses and administrators to ensure adequate nursing home staffing levels that protect resident health, safety, and well-being.

Cost Analysis of Nursing Home Registered Nurse Staffing Times

2005 ◽  
Vol 53 (5) ◽  
pp. 840-845 ◽  
Author(s):  
David A. Dorr ◽  
Susan D. Horn ◽  
Randall J. Smout
Keyword(s):  
Nursing Home ◽  
Cost Analysis ◽  
Registered Nurse ◽  
Nurse Staffing

scholarly journals The Impact of Leadership Styles on Quality and Financial Performance in High Medicaid Nursing Homes

2020 ◽  
Vol 4 (Supplement_1) ◽  
pp. 679-679
Author(s):  
Justin Lord ◽  
Akbar Ghiasi ◽  
Ganisher Davlyatov ◽  
Robert Weech-Maldonado
Keyword(s):  
Nursing Home ◽  
Nursing Homes ◽  
Financial Performance ◽  
Leadership Styles ◽  
Secondary Data ◽  
Trade Offs ◽  
Autocratic Leadership ◽  
Resource File ◽  
Composite Scores ◽  
The Impact

Abstract This study examined the association between leadership styles (autocrat, consultative autocrat, consensus manager, and shareholder manager) and resident quality and financial performance in under-resourced nursing homes. Survey data from 391 Directors of Nursing were merged with secondary data from LTCFocus, Area Health Resource File, Medicare Cost Reports, and Nursing Home Compare. Two multivariate regressions were used to model the relationship between leadership styles and the dependent variables: nursing home star ratings (1-5) and operating margin. The independent variables were composite scores for leadership styles, while control variables included organizational and county-level factors. Results show that compared to autocratic leadership, the consultative autocrat (solicits feedback but has total authority) was associated with lower quality (p < 0.05), while the consensus manager (delegates authority to the group) was associated with lower profit margin (p < 0.05). Under-resourced facilities need to recognize trade-offs of different decision making styles for performance.

scholarly journals THE RELATIONSHIP BETWEEN ORGANIZATIONAL CULTURE AND FINANCIAL PERFORMANCE AMONG HIGH-MEDICAID NURSING HOMES

2019 ◽  
Vol 3 (Supplement_1) ◽  
pp. S698-S698
Author(s):  
Robert Weech-Maldonado ◽  
Akbar Ghiasi ◽  
Ganisher K Davlyatov ◽  
Justin C Lord ◽  
Jane Banaszak-Holl
Keyword(s):  
Organizational Culture ◽  
Nursing Home ◽  
Nursing Homes ◽  
Financial Performance ◽  
Working Environment ◽  
Future Research ◽  
Market Culture ◽  
Operating Margin ◽  
Clan Culture ◽  
The Relationship

Abstract This study examines the relationship between organizational culture and financial performance of high Medicaid census (70% or higher) nursing homes (NHs). Based on the Competing Values Framework, there are four types of organizational culture: clan culture (friendly working environment); adhocracy culture (dynamic/creative working environment); market culture (results-based organization); and hierarchy culture (formalized/structured work environment). This study used facility survey data from approximately 324 nursing home administrators (30% response rate) from 2017- 2018, merged with secondary data from LTCFocus, Area Health Resource File, and Medicare Cost Reports. The dependent variable consisted of the operating margin, while the independent variable comprised type of organizational culture. Control variables were organizational (ownership, chain affiliation, size, occupancy rate, and payer mix), and county-level factors (Medicare Advantage penetration, income, education, unemployment rate, poverty, and competition). Multivariable regression was used to model the relationship between organizational culture type and financial performance. Regression results show that compared to a market culture, a hierarchy culture was associated with an 11.8 % lower operating margin, a clan culture with a 10.6% lower operating margin, and a non-dominant culture with 11.4% lower operating margin. Organizational culture is associated with financial performance among high Medicaid facilities, with market cultures outperforming other organizational cultures. Given increasing competition in the nursing home market and declining resources for high Medicaid nursing homes, facilities with a more external orientation and focus on results may be able to perform better financially. Future research should examine the effect of organizational culture on quality of care.

Policy brief: Registered nurse staffing requirements in nursing homes

2016 ◽  
Vol 64 (5) ◽  
pp. 507-509 ◽  
Author(s):  
Christine Mueller ◽  
Barbara Bowers ◽  
Sarah Greene Burger ◽  
Tara A. Cortes
Keyword(s):  
Nursing Homes ◽  
Registered Nurse ◽  
Nurse Staffing ◽  
Staffing Requirements

Does Competition Improve Service Quality? The Case of Nursing Homes Where Public and Private Payers Coexist

2021 ◽  
Author(s):  
Susan Feng Lu ◽  
Konstantinos Serfes ◽  
Gerard Wedig ◽  
Bingxiao Wu
Keyword(s):  
Nursing Home ◽  
Nursing Homes ◽  
Service Quality ◽  
Repeated Game ◽  
Healthcare Management ◽  
Quality Improvements ◽  
Rent Extraction ◽  
Public And Private ◽  
Market Structures ◽  
Wide Range

Competition plays an ambiguous role in nursing home markets where public and private payers coexist. Using U.S. nursing home data with a wide range of market structures, we find a U-shaped relationship between competition and service quality when nursing homes serve a mix of public and private segments, and a monotonically increasing relationship when nursing homes mostly serve the public, price-regulated, segment. The outcomes can be explained by the interplay of two opposing effects of competition: the reputation-building effect, whereby competing firms choose high quality to build a good reputation, and the rent-extraction effect, whereby competition hinders investment for quality improvements by lowering price premia. These observations are consistent with a repeated game model that incorporates public and private-payer segments. This paper was accepted by Stefan Scholtes, healthcare management.

scholarly journals Article Commentary: The Need for Higher Minimum Staffing Standards in U.S. Nursing Homes

2016 ◽  
Vol 9 ◽  
pp. HSI.S38994 ◽  
Author(s):  
Charlene Harrington ◽  
John F. Schnelle ◽  
Margaret McGregor ◽  
Sandra F. Simmons
Keyword(s):  
Nursing Home ◽  
Nursing Homes ◽  
Financial Incentives ◽  
Positive Relationship ◽  
Nurse Staffing ◽  
Federal Regulations ◽  
Political Strategies ◽  
Political Opposition ◽  
Staffing Levels ◽  
Nursing Home Quality

Many U.S. nursing homes have serious quality problems, in part, because of inadequate levels of nurse staffing. This commentary focuses on two issues. First, there is a need for higher minimum nurse staffing standards for U.S. nursing homes based on multiple research studies showing a positive relationship between nursing home quality and staffing and the benefits of implementing higher minimum staffing standards. Studies have identified the minimum staffing levels necessary to provide care consistent with the federal regulations, but many U.S. facilities have dangerously low staffing. Second, the barriers to staffing reform are discussed. These include economic concerns about costs and a focus on financial incentives. The enforcement of existing staffing standards has been weak, and strong nursing home industry political opposition has limited efforts to establish higher standards. Researchers should study the ways to improve staffing standards and new payment, regulatory, and political strategies to improve nursing home staffing and quality.

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