Public report cards prompt nursing homes to spend more on clinical services

Research Activities, January 2011, No. 365

Since 2002, consumers looking for quality information on nursing homes have had the Internet as a resource. The Nursing Home Compare Web site provides information on each facility as well as a variety of clinical quality indicators for consideration. Recently, Dana B. Mukamel, Ph.D., of the University of California-Irvine, and William D. Spector, Ph.D., a researcher with the Agency for Healthcare Research and Quality (AHRQ), and colleagues studied the effect of this report card data on nursing home expenditures. Specifically, the researchers wanted to see if the public availability of clinical quality measures influenced nursing home spending, leading to a shift in resources from hotel to clinical-related improvements. They found that the ratio of clinical to hotel expenditures (capital-related costs, plant operation, laundry, housekeeping, and dietary items) increased significantly after report cards were released, suggesting that indeed such a shift has occurred.

This is the expected "teaching to the test" reaction to publication of quality report cards. The researchers analyzed data from 10,022 nursing homes across the nation during the period between 2001 and 2006. This timeframe includes 2 prereport card years prior to release of quality information to the public in 2002. Data were obtained on such things as expenditures, occupancy levels, Medicare-covered residents, and quality measures. During the pre-report-card years, the ratio of clinical to hotel expenditures remained steady at 1.71 in 2001 and 1.72 in 2002. As expected, when public reporting became available, the ratio rose to 1.76 in 2003 and steadily climbed to 1.85 in 2005. Ratio increases were larger for nursing homes that had worse reported quality, lower occupancy rates, those located in competitive markets, and those owned by for-profit systems or chains.

The authors note, however, that there is no evidence of a decrease in spending on hotel-related activities, suggesting that the increase in clinical expenditures has been financed with new monies.

More details are in "Changes in clinical and hotel expenditures following publication of the nursing home compare report card," by Dr. Mukamel, Dr. Spector, Jacqueline Zinn, Ph.D., and others in the October 2010 Medical Care 48(10), pp. 869-874. Reprints (AHRQ Publication No. 11-R001) are available from the AHRQ Publications Clearinghouse.

Page last reviewed January 2011
Internet Citation: Public report cards prompt nursing homes to spend more on clinical services: Research Activities, January 2011, No. 365. January 2011. Agency for Healthcare Research and Quality, Rockville, MD.