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. Previous Literature 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 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 Y ist = β(NHC st *HHI i ) +γX ist +  i + λ t + ε ist Where: Y ist is quality for NH i in state s of quater t NHC st is an indicator for the NH Compare HHI i is competition at baseline, defined by fixed 25km radius X ist is a set of NH level control variables  i = NH fixed effects λ t = quarter fixed effects ε ist is a randomly distributed error term

9. Independent Variables X ist 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 OutcomeCoeff (SE) Deficiencies0.002 (0.004) Nurse hrs/resident day0.001 (0.001) Nurse aide hrs/resident day-0.013 (0.010)

12. Impact of NHQI OutcomeCoeff (SE) Infections-0.059* (0.025) ADL Loss0.079** (0.021) Restraints-0.075 (0.047) Ulcers, hi risk0.089** (0.031) Ulcers, lo risk0.256** (0.042) Depression0.200** (0.036) Incontinence0.047* (0.019) Catheter0.051 (0.031) Bedfast0.015 (0.040) ROM Loss0.052 (0.030)

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 OutcomeLow QualityHigh Quality Infections-0.0010.007 ADL Loss0.0090.002 Restraints-0.0010.007 Ulcers, hi risk0.0050.008 Ulcers, lo risk0.0030.009* Depression-0.0020.001 Incontinence0.015**-0.010* Catheter0.00010.011* Bedfast-0.0040.007 ROM Loss0.0050.004

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