Abstract
This article uses the Miles and Snow typology of strategies to examine nursing facilities' strategic responses to their changing environment and whether strategic responses are associated with facilities performance in quality outcomes. The author hypothesizes that prospector nursing facilities will have the highest quality outcomes, followed by defender, analyzer, and reactor facilities.
Nursing facilities operate in an environment that has become increasingly more challenging. Residents are admitted in a sicker condition, competition from other long-term-care providers has increased, and reimbursement for many services may not be adequate. Possibly as a result of these challenges in the environment, many nursing facilities are in financial difficulty, while others are operating close to the breakeven point.1 A recent report indicates that 48% of nursing facilities in some states are operating under bankruptcy proceedings.1 Several major nursing facility chains recently have become insolvent, largely due to changes in reimbursement under the Balanced Budget Amendment.
Clearly, the changing context in which nursing facilities operate requires a strategic response. The purposes of this article are first to examine nursing facilities' strategic responses to this changing environment, and second to examine whether strategic responses are associated with facilities' performance in quality outcomes. Performance in quality outcomes is measured by five well-recognized outcomes in nursing facilities: the proportion of residents who are physically restrained, the proportion of residents who are catheterized, the proportion of residents with contractures, the proportion of residents who have pressure ulcers, and the proportion of residents who are given psychoactive drugs.2-4
Daft defines a strategy as "a plan for interacting with the competitive environment to achieve organizational goals."5(p.42) Organizations develop a set of response mechanisms for interacting with their environment. These response mechanisms tend to perpetuate within the firm, so that responses tend to be consistent.6 This is important because some strategies may be more successful than others, and the performance of the organization may be affected.
One area of performance that may be affected is quality of care. Providing quality care to residents should be a goal of all nursing facilities, but obviously some facilities provide better care than others. Press reports,7 empirical research,8 and the federal government's assessment of nursing facilities attest to quality problems in some facilities.9 Quality is influenced by many factors, one of which is the strategic response of the organization. Some organizations' strategic response includes embracing and improving quality. Organizations that readily come to mind using this strategy include Ford, Disney, and 3M. Thus, we examine whether strategic responses of nursing facilities influence their performance in quality outcomes.
Many pieces of legislation provide strong environmental stimuli for nursing facilities to improve their quality. Most notable is the 1987 Nursing Home Reform Amendments (NHRA) of the Omnibus Budget Reconciliation Act (OBRA). As recommended by the Institute of Medicine report on Improving the Quality of Care in Nursing Homes, one of the goals of these far-reaching regulatory provisions was to make nursing facility care consistent with expert recommendations of care quality.10 This legislation was successful in many areas of care, and nursing facilities have generally improved their quality.11 However, few observers would argue that this improvement is sufficient. As Cherry12 observed, some nursing facilities may improve care from very poor levels to poor, but they seldom improve care from poor to good quality. Many nursing facilities still provide poor quality care, and the variation in quality among facilities is substantial.11