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Nursing Home Quality, Chain Affiliation, Profit Status and Performance


  • Randy I. Anderson

    (City University of New York-Baruch College, New York, NY 10010)

  • H. Shelton Weeks

    () (Florida Gulf Coast University, Ft. Myers, FL 33965-6565)

  • Bradley K. Hobbs

    () (Florida Gulf Coast University, Ft. Myers, FL 33965-6565)

  • James R. Webb

    () (Cleveland State University, Cleveland, OH 44114)


This study uses data on 487 nursing homes in Florida for 1996 to examine several issues about the efficiency of nursing homes. Chain affiliation (national, regional or independent) is examined, as is profit status (for-profit or non-profit). For the first time quality of care is also included, due to the uniqueness of the data which contains quality scores assigned by State of Florida officials. Multiple regression analysis, as well as data envelopment analysis (DEA), is used. The results, in general, indicate that substantial inefficiencies do exist in the range of 20% to 30%, which is consistent with previous efficiency studies in this industry. Without controlling for quality, for-profit firms and chain affiliated firms are shown to be slightly more efficient than their independent and non-profit counterparts. However, chain affiliated firms scored lower on quality than independents and for-profit firms scored lower on quality than non-profit firms. When controlling for quality, the profit status of the firm and room utilization rates are positively and significantly related to efficiency. However, in the presence of the quality control variable, there is no evidence to suggest that chain affiliation impacts efficiency.

Suggested Citation

  • Randy I. Anderson & H. Shelton Weeks & Bradley K. Hobbs & James R. Webb, 2003. "Nursing Home Quality, Chain Affiliation, Profit Status and Performance," Journal of Real Estate Research, American Real Estate Society, vol. 25(1), pages 43-60.
  • Handle: RePEc:jre:issued:v:25:n:1:2003:p:43-60

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    Cited by:

    1. Varabyova, Yauheniya & Blankart, Carl Rudolf Berchtold & Schreyƶgg, Jonas, 2016. "Using nonparametric conditional approach to integrate quality into efficiency analysis: Empirical evidence from cardiology departments," hche Research Papers 2016/11, University of Hamburg, Hamburg Center for Health Economics (hche).
    2. repec:spr:annopr:v:261:y:2018:i:1:d:10.1007_s10479-017-2628-7 is not listed on IDEAS
    3. repec:kap:hcarem:v:20:y:2017:i:4:d:10.1007_s10729-016-9372-4 is not listed on IDEAS
    4. Bergman, Mats A. & Johansson, Per & Lundberg, Sofia & Spagnolo, Giancarlo, 2016. "Privatization and quality: Evidence from elderly care in Sweden," Journal of Health Economics, Elsevier, vol. 49(C), pages 109-119.
    5. Ozgen, Hacer, 2006. "Does chain affiliation make a difference in efficiency of dialysis providers in the USA," Social Science & Medicine, Elsevier, vol. 62(9), pages 2112-2124, May.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services


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