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Improved nursing home quality does not necessarily have to cost more

Many Americans continue to be concerned about the quality of care in nursing homes. In particular, they fear that implementation of Medicare and other policies that reduce nursing home reimbursement may further undercut quality of care. However, a new study suggests that it may be possible to both improve quality and cut costs. The study, conducted by Dana B. Mukamel, Ph.D., of the University of Rochester School of Medicine, and William D. Spector, Ph.D., of the Agency for Healthcare Research and Quality, found that improved quality of care need not cost more.

The researchers studied 525 private and public nursing homes in New York State during 1991. They estimated a variable cost function based on three quality of care measures that can be affected by care management: deterioration in patient functional status during the first 6 months after admission to a nursing home, worsening of pressure ulcers during the same time, and death. They defined the quality measures for each nursing home by its predicted outcome rate (given the mix of patients and their risk of poor outcomes) minus observed outcome rate.

The relationship between costs and all quality measures followed an inverted U shape, which indicates that there were quality of care regimens in which higher quality was associated with lower costs. Also, while quality of care factors were associated with costs, the impact was relatively small. Costs for facilities within one standard deviation of the mean for each quality measure (that is, between 4 and 10 percentage points around the average outcome rate) ranged from 5 percent below the average to 2 percent above the sample mean cost.

It could be that some nursing homes use innovative care protocols or management strategies that are both quality enhancing and cost reducing. For example, improvement in food quality increases the likelihood that residents eat regular meals and reduces the need for expensive food supplements and parenteral feeding. Improved scheduling of toileting and bladder training increases residents' independence and lowers the costs of laundry and incontinence supplies.

See "Nursing home costs and risk-adjusted outcome measures of quality," by Drs. Mukamel and Spector, in Medical Care 38(1), pp. 78-89, 2000. Reprints (AHRQ Publication No. 00-R019) are available from the AHRQ Publications Clearinghouse.

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