Nursing home report cards offer financial incentives to improve quality

Nursing homes that show quality-of-care improvements on public report cards stand to see higher profit margins and revenue. But if a facility's score reflects improvement yet still results in a relatively poor quality rating, a facility isn't as likely to yield financial gains, according to a new study published in the journal Health Economics.

It can be expensive for nursing homes to make big enough changes to improve their quality-of-care scores, so they can be tentative about doing so. Instead, they want to see evidence that ratings improve the bottom line before making such changes, Health Behavior News Service reported.

The researchers compared nursing homes' financial performances from before and after the Centers for Medicare & Medicaid Services started recording the quality of care. The Nursing Home Compare report card, introduced in 2002, reflects how well each facility controls patients' pain, prevents bedsores and keeps their residents active, among other criteria.

Typically, financial improvements are the result of an increase in Medicare and private-payer patients, researchers said. Since these types of residents are more likely to choose higher-quality facilities, a trend could develop that further widens the differences between better-performing and poorer performing nursing facilities, lead author Jeongyoung Park, Ph.D., of the American Board of Internal Medicine, said.