IDEAS home Printed from https://ideas.repec.org/a/wly/hlthec/v24y2015is1p132-145.html
   My bibliography  Save this article

The Determinants of Care Home Closure

Author

Listed:
  • Stephen Allan
  • Julien Forder

Abstract

This study investigates the causes of full closure of care homes in the English care home/nursing home market. We develop theoretical arguments about two causes for closure that are triggered by errors or external shocks: poor economic sustainability and regulatory action. Homes aiming to operate with lower quality in the market are argued for a number of reasons to be more susceptible to errors/shocks in setting quality, especially negative errors, leading to an empirical hypothesis that observed quality should negatively affect closure chance. In addition, given quality, homes facing relatively high levels of local competition should also have an increased chance of closure. We use a panel of care homes from 2008 and 2010 to examine factors affecting their closure status in subsequent years. We allow for the potential endogeneity of home quality and use multiple imputation to replace missing data. Results suggest that homes with comparatively higher quality and/or lower levels of competition have less chance of closure than other homes. We discuss that the results provide some support for the policy of regulators providing quality information to potential purchasers in the market. © 2015 The Authors. Health Economics published by John Wiley & Sons Ltd.

Suggested Citation

  • Stephen Allan & Julien Forder, 2015. "The Determinants of Care Home Closure," Health Economics, John Wiley & Sons, Ltd., vol. 24(S1), pages 132-145, March.
    • Handle: RePEc:wly:hlthec:v:24:y:2015:i:s1:p:132-145
    DOI: 10.1002/hec.3149
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/hec.3149
    Download Restriction: no
    File URL: https://libkey.io/10.1002/hec.3149?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Sutton, John, 1986. "Vertical Product Differentiation: Some Basic Themes," American Economic Review, American Economic Association, vol. 76(2), pages 393-398, May.
    2. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(1), pages 3-13.
    3. Hirth, Richard A., 1999. "Consumer information and competition between nonprofit and for-profit nursing homes," Journal of Health Economics, Elsevier, vol. 18(2), pages 219-240, April.
    4. A. Colin Cameron & Pravin K. Trivedi, 2010. "Microeconometrics Using Stata, Revised Edition," Stata Press books, StataCorp LP, number musr, March.
    5. Forder, Julien & Allan, Stephen, 2014. "The impact of competition on quality and prices in the English care homes market," Journal of Health Economics, Elsevier, vol. 34(C), pages 73-83.
    6. John R. Bowblis, 2011. "Ownership conversion and closure in the nursing home industry," Health Economics, John Wiley & Sons, Ltd., vol. 20(6), pages 631-644, June.
    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


    Cited by:

    1. Masayo Kashiwagi & Noriko Morioka, 2021. "Characteristics of Home-Visit Nursing Agencies That Closed after the 2012 Fee Revision for Home-Visit Nursing Services: A Nationwide Panel Data Analysis in Japan," IJERPH, MDPI, vol. 18(18), pages 1-14, September.
    2. James Gaughan & Hugh Gravelle & Rita Santos & Luigi Siciliani, 2017. "Long-term care provision, hospital bed blocking, and discharge destination for hip fracture and stroke patients," International Journal of Health Economics and Management, Springer, vol. 17(3), pages 311-331, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bowblis John R. & Brunt Christopher S. & Grabowski David C., 2016. "Competitive Spillovers and Regulatory Exploitation by Skilled Nursing Facilities," Forum for Health Economics & Policy, De Gruyter, vol. 19(1), pages 45-70, June.
    2. Herr, A. & Saric, A., 2016. "The Welfare Effects of Single Rooms in German Nursing Homes: A Structural Approach," Health, Econometrics and Data Group (HEDG) Working Papers 16/23, HEDG, c/o Department of Economics, University of York.
    3. Gianni De Fraja & Paola Valbonesi, 2009. "Mixed Oligopoly: Old and New," Discussion Papers in Economics 09/20, Division of Economics, School of Business, University of Leicester.
    4. Raphael Auer & Philip Sauré, 2011. "Spatial Competition in Quality, Demand Induced Innovation, and Schumpeterian Growth," DEGIT Conference Papers c016_067, DEGIT, Dynamics, Economic Growth, and International Trade.
    5. Ying He & Huaxia Rui, 2022. "Probabilistic selling in vertically differentiated markets: The role of substitution," Production and Operations Management, Production and Operations Management Society, vol. 31(11), pages 4191-4204, November.
    6. Wassim Daher & Harun Aydilek & Fida Karam & Asiye Aydilek, 2014. "Insider trading with product differentiation," Journal of Economics, Springer, vol. 111(2), pages 173-201, March.
    7. Ferran Espuny Pujol & Ruth Hancock & Morten Hviid & Marcello Morciano & Stephen Pudney, 2021. "Market concentration, supply, quality and prices paid by local authorities in the English care home market," Health Economics, John Wiley & Sons, Ltd., vol. 30(8), pages 1886-1909, August.
    8. Manez, J.A. & Waterson, M., 2001. "Multiproduct Firms and Product Differentiation: a Survey," The Warwick Economics Research Paper Series (TWERPS) 594, University of Warwick, Department of Economics.
    9. Gerhard O. Orosel & Klaus G. Zauner, 2011. "Quality Diversity and Prices in Markets for Experience Goods," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(3), pages 709-738, September.
    10. Constantatos, Christos & Perrakis, Stylianos, 1995. "Différenciation verticale et structure du marché," L'Actualité Economique, Société Canadienne de Science Economique, vol. 71(1), pages 71-98, mars.
    11. Evelyn Vezza, 2004. "Poder de Mercado en las Profesiones Autorreguladas: El Desempeño Médico en Argentina," CEDLAS, Working Papers 0016, CEDLAS, Universidad Nacional de La Plata.
    12. Andrew Metrick & Richard Zeckhauser, 1996. "Price Versus Quanitity: Market Cleaning Mechanisms When Sellers Differ in Quality," Harvard Institute of Economic Research Working Papers 1775, Harvard - Institute of Economic Research.
    13. Barron, David N. & West, Elizabeth, 2017. "The quasi-market for adult residential care in the UK: Do for-profit, not-for-profit or public sector residential care and nursing homes provide better quality care?," Social Science & Medicine, Elsevier, vol. 179(C), pages 137-146.
    14. Harald Gruber, 1990. "Product Innovation and Persistence of Leadership: Theory with Evidence from the Semiconductor Industry," STICERD - Economics of Industry Papers 02, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    15. Ryan W. Buell & Dennis Campbell & Frances X. Frei, 2016. "How Do Customers Respond to Increased Service Quality Competition?," Manufacturing & Service Operations Management, INFORMS, vol. 18(4), pages 585-607, October.
    16. Nilsson, Tomas K.H. & Foster, Kenneth A., 2004. "Product And Process Certification In Imperfectly Competitive Markets," 2004 Annual meeting, August 1-4, Denver, CO 19933, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    17. Evelyn Vezza, 2004. "Poder de Mercado en las Profesiones Autorreguladas: El Desempeño Médico en Argentina," Department of Economics, Working Papers 056, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.
    18. Arzi Adbi & Ajay Bhaskarabhatla & Chirantan Chatterjee, 2020. "Stakeholder Orientation and Market Impact: Evidence from India," Journal of Business Ethics, Springer, vol. 161(2), pages 479-496, January.
    19. Nilsson, Tomas K.H. & Foster, Kenneth A., 2005. "Certification of Pork Products," 2005 Annual meeting, July 24-27, Providence, RI 19350, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Stoneman, Paul, 2011. "Soft Innovation: Economics, Product Aesthetics, and the Creative Industries," OUP Catalogue, Oxford University Press, number 9780199697021.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:24:y:2015:i:s1:p:132-145. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/5749 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.