Does it pay to make the grade? The association between quality and financial performance in nursing homes

This study sought to answer the question, "Is there an association between quality rating performance on Nursing Home Compare (NHC) and financial performance in nursing homes?" A quantitative, non-experimental study involving archival data was conducted using data from Medicare Cost Reports and Nursing Home Compare. The sample included CMS-certified, freestanding skilled nursing facilities in the United States that participated in NHC from 2009-2011 and submitted Medicare Cost Reports from 2010-2012. There were 14,015 nursing homes in 2010; 14,139 nursing homes in 2011; and 14,265 nursing homes included in 2012. Data was analyzed with generalized linear models using the Statistical Package for the Social Sciences 22 (SPSS). The results of this study indicated that high quality was correlated to lower operating expenses, higher occupancy (over the latter two years of the study), private payor census and higher Medicare census. This study did not find that high quality was associated with higher operating profit margins. Despite the limitations of this study, the results provide important implications for nursing home operators and policymakers.