Ownership Conversions and Nursing Home Performance

Abstract

To examine the effects of ownership conversions on nursing home performance. Online Survey, Certification, and Reporting system data from 1993 to 2004, and the Minimum Data Set (MDS) facility reports from 1998 to 2004. Regression specification incorporating facility fixed effects, with terms to identify trends in the pre- and postconversion periods. The annual rate of nursing home conversions almost tripled between 1994 and 2004. Our regression results indicate converting facilities are generally different throughout the pre/postconversion years, suggesting little causal effect of ownership conversions on nursing home performance. Before and after conversion, nursing homes converting from nonprofit to for-profit status generally exhibit deterioration in their performance, while nursing homes converting from for-profit to nonprofit status generally exhibit improvement. Policy makers have expressed concern regarding the implications of ownership conversions for nursing home performance. Our results imply that regulators and policy makers should not only monitor the outcomes of nursing home conversions, but also the targets of these conversions.