Health Consequences of Corporate Changes in the Nursing Home Industry

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DESCRIPTION (provided by applicant): With many states experiencing fiscal crises and shrinking Medicaid budgets, constraints on the public resources available for long-term care may require a greater reliance on private capital investments to update the aging nursing home infrastructure. However, some studies have shown negative effects of corporate ownership on health outcomes for individual residents in facilities and increased acquisitions by corporate chains raises concerns that health outcomes may suffer. At the same time, these concerns are based on empirical studies that did not consider that corporate chains may acquire poorly operating facilities or that changing facility outcomes may be difficult immediately following acquisitions. Hence, we propose to examine the importance of the acquisition and divestiture changes for both facility and resident outcomes and to develop a more accurate measure of membership within individual chains which would allow us to distinguish chains that differ both in size and quality outcomes for residents. Our first aim is to describe the changing composition of chain ownership in the nursing home sector from 2000 through 2010, focusing on changes in the size and service mix complexity of individual chains and examining the impact of state policies and market environment on the likelihood of chains acquiring or divesting facilities. We will then determine the impact of recent changes in chain ownership on facility operations and care processes such as admission patterns, staffing, occupancy rates, specialty care provision, and achievement of industry standards. We will also determine the impact of recent changes in chain ownership on residents' care outcomes (including outcomes relevant during end of life care, rehabilitation stays and long-term skilled nursing stays), controlling for changes in residen populations across chains and facilities. Finally, we will evaluate whether chains standardize their product across their nursing home members as observed in changes in members' operations and performance over time and whether standardization varies by market inputs and regulatory conditions. Within each aim, we will determine how the results vary by type of chain (e.g., national, regional or single-state) and how the changes develop as a function of length of time since acquisition or divestiture. In order to study these issues, we will combine existing Medicare claims and MDS data at the resident level, OSCAR data on all nursing facilities and state level market and policy data sets.