Association for Public Policy Analysis & Management

With the aging of our society, concerns about the quality of nursing homes have been increasing. The Nursing Home Compare (NHC) report card is believed to reduce information asymmetry between the facility and potential residents and, consequently, improve nursing home quality. However, there is limited evidence about how nursing homes use this publicly disseminated performance information. This study analyzed the performance gap between nursing home administrators’ self-assessment and the NHC report card performance ratings and explored the factors contributing to the gap. All 515 Medicare- and Medicaid-certified nursing homes in Indiana were surveyed between August and December 2013. The response rate was approximately 45%. The survey data were compared with the NHC data to identify the gap. One-way ANOVA and ordered logistic regression analysis were conducted. Despite voluntary participation, a reasonably high response rate, and anonymity, this study found that 62% of respondents either under- or overrated their facilities’ performance, with the majority overrating their performance. The following factors were associated with a smaller performance gap: nonprofit or government-owned status, higher staffing levels, a higher percentage of hours worked by registered nurses, and a higher market concentration. Longer work experience and greater county occupancy rates were associated with a larger performance gap. The significant gap implies that administrators either do not regularly review the NHC report card or do not concur with the NHC ratings. To reduce the gap and consequently improve performance, it is necessary to stabilize the administrators’ position so that administrators knows how they stand in the market and are consequently better equipped to successfully respond to the market. Facilities may also need to provide regular training on current technologies and facilitate use of the NHC report card, targeting administrators who are old and have many years of work experience.