Nursing home quality improvements linked to higher revenue, study shows

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Nursing homes that improve their performance on public report cards may reap financial benefits, a recent study suggests.

Researchers examined data from 6,286 Medicare-certified nursing homes between 1999 and 2005. They selected 15 clinical quality measures from the Centers for Medicare & Medicaid Services' Nursing Home Compare website (launched in 2002) to compare revenues, expenses, operating margins, and total profit margins before and after public reporting of quality data was initiated. Investigators found that nursing homes that improved their scores also increased their revenue, primarily through higher Medicare admissions.

The study warns that while better returns might motivate some nursing home operators to invest, lower-quality facilities with fewer resources have are less likely to do so. Researchers note that more profitable facilities that invest in better care are likely to separate themselves from lower-tier facilities. Full findings appear in the spring issue of Health Services Research.