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efficiency, nursing homes, quality



  1. DeLellis, Nailya O.
  2. Ozcan, Yasar A.


Background: With an anticipated increased use of nursing homes to serve an aging population in the United States, questions regarding the quality and cost of nursing home services come to the fore. Such questions are the concern of nursing home residents, their families, private and public payers, policy makers, regulators, and nursing home operators.


Purposes: The purpose of this study was to examine the relationship between quality of care and efficiency of nursing homes to determine the characteristics of facilities that achieve high quality and high efficiency. The study sought also to determine the extent to which nursing homes can provide high-quality services and do so with a high level of efficiency.


Methodology/Approach: This was a cross-sectional study of a 10% random sample of U.S. nursing homes, excluding those in hospitals and also those with fewer than 20 beds or more than 360 beds. Data sources were the Online Survey Certification and Reporting, the Area Resource File database, the U.S. Bureau of Labor Statistics, and the U.S. Bureau of Economic Analysis. Data envelopment analysis was employed in the analysis of data.


Findings: The average efficiency of nursing homes was 0.869 (SD = 0.1362), with a statistically significant higher average efficiency for nursing homes in urban areas; in counties with a higher level of competition, higher average income, or higher number of home health agencies; and in not-for-profit and governmental facilities. Quality measures were compared between efficient and inefficient nursing homes, showing mostly favorable quality outcomes for efficient nursing homes.


Practice Implications: Families and residents evaluating or in search of nursing homes can be confident that high-quality, efficient nursing homes exist. Legislators, policy makers, regulators, payers, and administrators can be confident that the setting of standards that encourage striving for both quality and efficiency simultaneously is indeed realistic.