Strategic Groups and Performance in the Nursing Home Industry: A Reexamination

Abstract

This study further examines the relationship between strategic group membership and performance in the nursing home industry. The results indicate seven strategic groups in the industry with significant between-group differences in operating margin, average profit per patient day, catheterization rate, health deficiencies, life and safety deficiencies, and efficiency in the provision of services. The authors did not, however, find significant between-group differences in pressure sore rate, the use of restraints, or in the percentage of patients with significant unplanned weight changes. The group with the highest private-pay utilization combined with high Medicare utilization generally performed the best along all indicators. Results also suggest that strategic group membership and rural/urban location have a greater impact on performance than do ownership, chain membership, or possession of a dedicated specialty care unit.