Does Information Matter? Competition, Quality and the Impact of Nursing Home Report Cards

1. Does Information Matter? Competition, Quality and the Impact of Nursing Home Report Cards David C. Grabowski, Harvard Robert Town, Minnesota and NBER AcademyHealth, June 2008

2. Background • Nursing home quality is an important policy issue • One explanation for poor NH quality is incomplete information • Both the federal government and some states have adopted NH report cards in recent years

3. Nursing Home Compare

4. NH Compare (cont.) • Almost no evidence of NH Compare use pre-2002 • Also no evidence of state report card use • However, NHQI was strongly promoted: • Media campaign of television and newspaper ads • QIOs promoted awareness among NHs • State LTC Ombusman promoted awareness among consumers • Monthly website visits on NH Compare jumped from 100,000 to 400,000

5. Mukamel et al (2008) examined trends in 5 QMs pre/post NHQI and found 2 QMs (restraints, pain) showed a small one-time improvement Several specific actions by NHs were associated with this improvement Previous Literature Mukamel et al (2008), Health Services Research

6. Our Contribution • Examine impact of NH Compare on quality • Given national introduction, we rely on differences in NH market structure to identify our model • The more competitive the market, the more the flow of residents are affected by report card information

7. Data • MDS Facility Reports: 1999-2005q1 • QI/QM data at facility-level by quarter • OSCAR: 1999-2004 • Staffing • Health-related deficiencies • Facility characteristics (ownership, size, etc.)

8. General Empirical Approach NH fixed effects model Yist = β(NHCst*HHIi) +γXist + i + λt + εist Where: Yist is quality for NH i in state s of quater t NHCst is an indicator for the NH Compare HHIi is competition at baseline, defined by fixed 25km radius Xist is a set of NH level control variables i = NH fixed effects λt = quarter fixed effects εist is a randomly distributed error term

9. Independent Variables Xist encompasses: • Size dummies • Ownership status (for-profit, NFP, government) • Hospital affiliation • Whether part of multiple-facility chain • Average # ADLs with which residents need assistance

10. Methods • For outcomes expressed as % of residents, use logit transformation so dependent variables are of form: • For staffing, use OLS • For deficiencies, use negative binomial model • Huber-White std errors, clustered by NH

11. Impact of Initial NH Compare Introduction

12. Impact of NHQI

13. Magnitude of Estimates • Change in HHI between 0.5 and 0.2 on the percentage change in the SD of the QI • Depression = 48% • ADL Loss = 4% • Pressure ulcers, high risk = 22% • Pressure ulcers, low risk = 105% • Incontinence = 9%

14. Patient Flows • Further means of validating these quality results is to examine the effect of NHQI on market share • We would expect low quality NHs at baseline to lose market share and high quality NHs to gain market share • Thus, we regress ln(market share) on NHQI*baseline quality

15. Effect of NHQI*Baseline Quality on Market Share

16. Summary of Results • Initial CMS report card efforts had little effect on NH quality • Subsequent, better publicized efforts did improve quality across certain measures • Some limited evidence that higher quality NHs gained some market share post-NHQI

17. Implications • Report cards alone yield few benefits (!) • Unclear whether CMS has continued to monitor and encourage report card use following the NHQI • Effects are heterogeneous, suggesting some QMs may be more amenable to change • Nature of the QM and ability of providers to improve behavior • Competition associated with better outcomes • Intuitive but does not necessarily fit w/ the “conventional wisdom” in LTC