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Nursing Homes May Profit From Improved Quality Scores

Improvement on reported quality measures may contribute to higher profit margins for facilities

FRIDAY, Nov. 5 (HealthDay News) -- Nursing homes that improve on publicly reported quality measures may see a return on their investment with improved revenues and higher profit margins, according to research published online Oct. 28 in Health Services Research.

Jeongyoung Park, Ph.D., of the American Board of Internal Medicine in Philadelphia, and colleagues analyzed data on 6,286 Medicare-certified nursing homes between 1999 and 2005 from Medicare Cost Reports, Minimum Data Set, and the Online Survey and Certification Reporting System. According to the authors, in 2002 the Centers for Medicare and Medicaid Services began publicly reporting on the quality of care in Medicare/Medicaid-certified nursing homes.

The researchers found that improved facilities showed increased revenues following public reporting, leading to better profit margins. This finding was mainly due to increased Medicare admissions. A similar pattern was seen for facilities that were high-scoring, though not to a statistically significant degree.

"High performance or improvement on quality measures may lead to economic rewards for providers in the presence of publicly reported quality. This is very positive for public reporting. It appears possible for providers to receive a return on investment in quality improvement even if the highest threshold of quality is not achieved. On the margin, this may motivate providers to invest in improving quality. Second, improvement on quality measures matters but the absolute level of reported quality also matters," the authors write.

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