Public Reporting of Nursing
Home Quality: Does It Pay Off?
Jeongyoung Park
University of Pennsylvania
Co-authors:
C
th
Rachel M. Werner
R. Tamara Konetzka
Funding: AHRQ (R01-HS016478-01)
1
Public Reporting of Quality
 Anticipated impact of report cards is two
two--fold
 Increasing demand for high quality
 Motivating providers to compete on quality
 Minimal evidence about the success of report
cards in improving quality
 Little research on the p
providers’ costs of
improving quality or their return on investment
2
Why Might Report Cards
Impact
I
t Fi
Financial
i l Performance?
P f
?
 Iff successful,
f l highhigh
hi h-scoring
i
providers
id
should
h ld
achieve better financial performance
 Revenues: Revenues increase through increased
market share
 Expenses: Quality improvement may increase resource
use and costs in the short term, but may recoup costs
in the long term
 Profits: Ultimately increase profit margins
3
Does Quality Pay?
 Providers are skeptical about the impact of
report cards, esp. their use of consumers
 Financial effects are poorly understood
 Iff there
h
are financial
f
l benefits
b
f
to public
bl reporting,
it may convince providers to strive for high
quality
q
y
4
Objective
 To examine whether nursing
g homes with high
g
report card scores or improved scores reap
economic rewards from public reporting
5
Data
 Financial performance
 Medicare Cost Reports
 Reported quality measures
 Minimum Data Set
 Facility characteristics
 Online Survey Certification and Reporting System
 Limited to freestanding skilled nursing facilities
 7,521 SNFs with 47,342 observations
 1999
1999--2005
6
Empirical Model
 Fit = β(
β(NHC
NHCt) + γXit + i + εit
 Fit : financial performance
- operating, total margin
 NHCt : Nursing Home Compare (in 2002) indicator
- pre (1999
(1999--2002) vs. post (2003
(2003--2005)
 Xit : timetime-varying covariates
 i : SNF fixedfixed-effects
 Stratified by 15 reported quality measures
 12 chronic and 3 post
post--acute
7
15 Quality Measures
Mean (%) SD
Long Stay:
Long-Stay:
need for help with daily activities
11.14
5.44
moderate to severe pain
6.72
5.39
pressure sores (high-risk)
(h h
k)
14.23
23
7.15
pressure sores (low-risk)
3.02
3.71
physically restrained
8.33
8.11
d
depressed
d or anxious
i
16 27
16.27
6 40
6.40
lose control of their bowls or bladder (low-risk)
47.53
13.80
catheter inserted and left in their bladder
5.85
3.97
i b
in
bed
d or in
i a chair
h i
4 84
4.84
5 33
5.33
ability to move about in/around their room got worse
15.56
7.96
urinary track infection
8.52
4.72
lose too much weight
9 98
9.98
4 80
4.80
delirium
3.81
4.98
moderate to severe pain
22.84
13.73
pressure sores
27.06
14.16
Short-Stay:
8
Stratification
 By
y reported
p
score
 High-scoring (N=944): all 15 QMs above median after
NHC
 Middle
Middle-scoring
scoring (N=5,617)
(N=5 617)
 Low-scoring (N=960): all 15 QMs below median after
NHC
 By improvement
 Improved (N
(N=1
1,652):
652): any positive change in all 15 QMs
 No change (N=5,354)
 Worse (N=515): any negative change in all 15 QMs
9
Results: By Reported Score
O perating Marg
Marg in T
in
T otal
otal Marg
Marg in
pre vs. post: 0.99** pre vs. post: 0.42*** pre vs. post: 0.31 2.50
1.50
.50
0.50
pre vs. post: 0.02 pre vs. post: ‐0.18 pre vs. post: ‐0.10 ‐0.50
Hig h‐s c oring
Middle‐s c oring
L ow‐s c oring
Hig h‐s c oring
Middle‐s c oring
L ow‐s c oring
‐1.50
‐2.50
P re‐NH C (1999‐2002)
P os t‐NH C (2003‐2005)
*** p<0.001, ** p<0.01, * p<0.05
10
Results: By Improvement
O perating Marg
Marg in T
in
T otal
otal Marg
Marg in
2.50
pre vs. post: 1.01*** pre vs. post: 0.39** pre vs. post: ‐0.26 1.50
.50
0.50 pre vs. post: 0.51* pre vs. post: ‐0.29* pre vs. post: ‐0.83* ‐0.50
Improv ed
No c hang e
Wors e
Improv ed
No c hang e
Wors e
‐1.50
‐2.50
P re‐NH C (1999‐2002)
P os t‐NH C (2003‐2005)
*** p<0.001, ** p<0.01, * p<0.05
11
Results: Among Improved
All
Improved High-scoring Middle-scoring Low-scoring
Facilities
(N=66)
(N=1,171)
(N=415)
(N 1 652)
(N=1,652)
Operating Margin
Total Margin
0.51*
2.68*
0.49
0.29
1.01***
2.93*
1.03***
0.62
*** p<0.001,
0 001 ** p<0.01,
0 01 * p<0.05
0 05
12
How Quality Pays
 Consumer response


Changes in market share
Occupancy increased for facilities with highhigh-scores and
improved scores, which partially supports for a
theoretical mechanism of public reporting
 Provider (dysfunctional) response


Changes in payerpayer-mix or severity
No significant changes in % more profitable residents
(e.g.
(e g Medicare/privateMedicare/private-pay or RUG rehab)
13
Summary
 Incentives inherent in public reporting appear to
b working
be
ki
as intended
i t d d

High-scoring nursing homes and those with
Highimprovement gain financial benefits
 Improvement counts, but absolute score also
matters


Improvers with low
low--scores don’t reap economic rewards
Over time, this may reduce the ability of lowlow-scoring
f iliti tto respond
facilities
d tto quality
lit iimprovementt iincentives
ti
14
Implications
 Justifies expenditures or organizational changes
t increase
to
i
performance
f

A Business Case for Quality
 Under proposed nursing home P4P

Reward improvement in addition to absolute
achievement

Safeguards necessary to ensure that low
low--quality
providers have necessary resources to improve
15