High Medicaid Nursing Homes: Organizational and Market Factors Associated with Performance

Abstract

High Medicaid nursing homes (85% and higher of Medicaid residents) operate in resource constrained environments. High Medicaid nursing homes (on average) have lower quality and poorer financial performance. However, there is significant variation in performance among high Medicaid nursing homes. The purpose of this study is to examine the organizational and market factors that may be associated with high performance among high Medicaid nursing homes. Data sources included: 2011- 2014 Certification and Survey Provider Enhanced Reports (CASPER), Long Term Care (LTC) Focus, Medicare Cost Reports, and the Area Health Resource File (AHRF). There were approximately 829 facilities with high Medicaid. The dependent variable consists of five categories of performance: 1) high quality/high financial performance; 2) high quality/low financial performance; 3) low quality/high financial performance; 4) low quality/low financial performance; and 5) other performance. The independent variables included size, chain affiliation, occupancy rate, percent Medicare, competition, and per capita income. Control variables included staffing variables, for-profit status, acuity index, percent minorities in the facility, county level socioeconomic variables, metropolitan area, and Medicare Advantage penetration. Data were analyzed using multinomial logistic regression with state and year fixed effects, adjusting standard errors for clustering of facilities over time. Results suggest that organizational and market slack resources are associated with performance differentials among high Medicaid nursing homes. High performing facilities (high quality/high financial performance) are more likely to have higher occupancy rate and higher Medicare census, and are located in less competitive markets. Results also suggest that size has a stronger impact on financial performance vis-à-vis quality among high Medicaid nursing homes.