Doing Better to Do Good: The Impact of Strategic Adaptation on Nursing Home Performance

Abstract

Objective. To test the hypothesis that a greater commitment to strategic adaptation, as exhibited by more extensive implementation of a subacute/rehabilitation care strategy in nursing homes, will be associated with superior performance. Data Sources. Online Survey, Certification, and Reporting (OSCAR) data from 1997 to 2004, and the area resource file (ARF). Study Design. The extent of strategic adaptation was measured by an aggregate weighted implementation score. Nursing home performance was measured by occupancy rate and two measures of payer mix. We conducted multivariate regression analyses using a cross‐sectional time series generalized estimating equation (GEE) model to examine the effect of nursing home strategic implementation on each of the three performance measures, controlling for market and organizational characteristics that could influence nursing home performance. Data Collection/Abstraction Methods. OSCAR data was merged with relevant ARF data. Principal Findings. The results of our analysis provide strong support for the hypothesis. Conclusions. From a theoretical perspective, our findings confirm that organizations that adjust strategies and structures to better fit environmental demands achieve superior performance. From a managerial perspective, these results support the importance of proactive strategic leadership in the nursing home industry.