Advanced Search
MyIDEAS: Login

Predicting bankruptcy in the Texas nursing facility industry

Contents:

Author Info

  • Knox, Kris Joseph
  • Blankmeyer, Eric C.
  • Trinidad, José A.
  • Stutzman, J.R.
Registered author(s):

    Abstract

    Approximately 50% of nursing facilities in Texas petitioned for bankruptcy during the 1998-2004 period. Using a logit regression model tested for robustness, we find nursing facilities that are profit-seekers, chain members, pay higher than average wage rates, accept more intensive-care residents and obtain a larger than average portion of their funding from public sources are highly vulnerable to negative changes in regulatory policy decisions on Medicare and Medicaid reimbursement. Larger facilities having higher than average occupancy rates and quality of care are less susceptible to adverse decisions. The model correctly classifies a facility as either bankrupt or solvent in about 75% of cases. We also examine the duration of bankruptcy using accelerated failure-time models. It appears that the duration of bankruptcy depends on location, out-of-state ownership, length of ownership, volume of resident days supplied, total cost and proportion of revenues from Medicaid.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/B6W5X-4TGHNJB-1/2/9c09440bec21276c2a6b5b75cad2b397
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal The Quarterly Review of Economics and Finance.

    Volume (Year): 49 (2009)
    Issue (Month): 3 (August)
    Pages: 1047-1064

    as in new window
    Handle: RePEc:eee:quaeco:v:49:y:2009:i:3:p:1047-1064

    Contact details of provider:
    Web page: http://www.elsevier.com/locate/inca/620167

    Related research

    Keywords: Bankrupt Nursing facilities Logit regression;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. O. David Gulley & Rexford E. Santerre, 2003. "The Effect of Public Policies on Nursing Home Care in the United States," Eastern Economic Journal, Eastern Economic Association, vol. 29(1), pages 93-104, Winter.
    2. Lau, Lawrence J & Yotopoulos, Pan A, 1971. "A Test for Relative Efficiency and Application to Indian Agriculture," American Economic Review, American Economic Association, vol. 61(1), pages 94-109, March.
    3. John J. McConnell & Ronald C. Lease & Elizabeth Tashjian, 1996. "Prepacks As A Mechanism For Resolving Financial Distress: The Evidence," Journal of Applied Corporate Finance, Morgan Stanley, vol. 8(4), pages 99-106.
    4. Arturo Estrella, 1997. "A new measure of fit for equations with dichotomous dependent variables," Research Paper 9716, Federal Reserve Bank of New York.
    5. Rousseeuw, Peter J. & Christmann, Andreas, 2003. "Robustness against separation and outliers in logistic regression," Computational Statistics & Data Analysis, Elsevier, vol. 43(3), pages 315-332, July.
    6. Kris Knox & Eric Blankmeyer & J. Stutzman, 2007. "Technical efficiency in texas nursing facilities: A stochastic production frontier approach," Journal of Economics and Finance, Springer, vol. 31(1), pages 75-86, March.
    7. Yotopoulos, Pan A & Lau, Lawrence J, 1973. "A Test for Relative Economic Efficiency: Some Further Results," American Economic Review, American Economic Association, vol. 63(1), pages 214-23, March.
    8. Kris Knox & Eric Blankmeyer & J. Stutzman, 1999. "Relative economic efficiency in Texas nursing facilities: A profit function analysis," Journal of Economics and Finance, Springer, vol. 23(3), pages 199-213, September.
    9. David C. Grabowski, 2001. "Does an Increase in the Medicaid Reimbursement Rate Improve Nursing Home Quality?," Journals of Gerontology: Series B, Gerontological Society of America, vol. 56(2), pages S84-S93.
    10. Croux, Christophe & Haesbroeck, Gentiane, 1999. "Influence Function and Efficiency of the Minimum Covariance Determinant Scatter Matrix Estimator," Journal of Multivariate Analysis, Elsevier, vol. 71(2), pages 161-190, November.
    11. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, 09.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Abbas, Qaiser & Rashid, Abdul, 2011. "Modeling Bankruptcy Prediction for Non-Financial Firms: The Case of Pakistan," MPRA Paper 28161, University Library of Munich, Germany.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:quaeco:v:49:y:2009:i:3:p:1047-1064. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.