Association for Public Policy Analysis & Management

Under the healthcare reform, we are moving towards value-based purchasing (VBP) which emphasizes reimbursements based on the performance of the organization. One of the key components of hospital VBP program is patient and family experience of care. Even though the Centers for Medicare and Medicaid Services (CMS) seeks to incorporate cross-setting performance metrics, we are behind to incorporate patient and family experience of care into payment incentives for nursing home care services. Also, there is a lack of evidence on how patient and family experience is associated with the organization’s performance, especially in nursing home care settings. To fill the gap, this study explored the impact of family members' involvement in care plan development and visitation on nursing home performance via the information asymmetry perspective. Given that nursing home patients are likely to have some cognitive limitations, this study pays attention to the role of family members. Previous studies have emphatically claimed that report cards reduce the information gap, spurring quality competition and resulting in better performance. However, family members' roles as sources of quality-related information and care monitors have been neglected. Accepting this active role, this study hypothesizes that more frequent family member involvement and visitation will enhance nursing home performance by reducing the existing information gap. This study surveyed 234 administrators from Medicare- and Medicaid-certified Indiana nursing homes and the data were combined with the Nursing Home Compare Five-Star Quality report card ratings. The results of ordered logistic regression analysis supported the hypothesis in that an especially significant and positive impact was found for survey inspection domains and overall quality ratings. This gives us policy implications that state and federal governments need to expand nursing home performance metrics to include consumer assessment of care when financially incentivizing nursing homes. In this respect, it warrants further discussion on how to maximize the utilization of the current Consumer Assessment of Healthcare Providers and Systems (CAHPS) Nursing Home Family Member Survey.