This study examined the relationship between nursing homes' racial composition of residents and financial performance, and whether financial performance influenced the relationship between racial composition and quality of care. The results showed that nursing homes with no black residents had better financial outcomes and quality outcomes than homes with high proportions of black residents. Financial performance partially influenced the relationship between racial composition and quality. The study recommends increasing Medicaid payments to homes with many minority residents, implementing pay-for-performance programs, and addressing trends like residential segregation and occupancy rates.

1. Nursing Home Quality and
Financial Performance: Does the
Racial Composition of Residents
Matter?
Latarsha Chisholm, PhD
Assistant Professor
Department of Health Management & Informatics

2. Acknowledgement
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Robert Weech-Maldonado, PhD
Alex Laberge, PhD
Feng-Chang Lin, PhD
Kathryn Hyer, PhD

3. Background
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1.
2.
Nursing homes
– Approximately 15,500 NHs in 2011 1
Nursing home residents
– An estimated 1.4 million residents 1
Payers of long-term care 2
– Medicaid and Medicare (post-acute care)
• Paid for ~60% of long-term care (LTC )services
– Out-of-pocket
• Paid for ~15% of LTC services
– Long-term care insurance
• Paid for ~7% of LTC services
– Other
• Paid for ~17% of LTC services
Kaiser commission on Medicaid and Uninsured analysis of 2011 Online Survey, Certification, and Reporting system
(OSCAR) data
Kaiser commission on Medicaid and the Uninsured. (2013). Medicaid’s role in meeting the long-term care needs of America’s
Seniors. Retrieved from: http://kaiserfamilyfoundation.files.wordpress.com/2013/02/8403.pdf

4. Quality of Nursing Home Care
• Nursing home quality has been a longstanding public policy issue 1,2
1.
2.
Institute of Medicine. (1986). Improving the quality of care in nursing homes. Washington, D.C: National Academy Press.
Institute of Medicine. (2001). Improving the quality of long-term care. Washington, D.C. National Academy Press

5. Racial/Ethnic Disparities in Quality
of Care
• Prior research indicates racial/ethnic
disparities are present in nursing homes:
– Black residents have a higher prevalence of pressure
ulcers1
– Black residents are less likely to receive a flu vaccination2
– Black residents are more likely to have feeding tubes3
– Black residents have a higher rate of hospitalization4
1.
2.
3.
4.
Cai, S., Mukamel, D., & Temkin-Greener, H. (2010). Pressure ulcer prevalence among Black and White nursing home residents in New
York state: Evidence of racial disparity? Medical Care, 48, 3.
Cai, S., et al., (2011). Despite small improvement Black nursing home residents remain less likely than Whites to receive flu vaccine.
Health Affairs, 30, 10.
Grabowksi, D., & McGuire, T. (2009). Black-White disparities in care in nursing homes. Atlantic Economic Journal, 37.
Gruneir, A. et al., (2008). Relationship between state Medicaid policies, nursing home racial composition, and the risk of hospitalization
for Black and White residents. Health Services Research, 43, 3.

6. Possible Contributors of Disparities
• Nursing home segregation
– Residential segregation
– Admission policies
• Medicaid-reliant nursing homes1
– Lower quality of care
– Fewer nursing staff
1. Mor, V., et al., (2004). Driven to tiers: Socioeconomic and racial disparities in the quality of nursing home care. Milbank Quarterly, 82, 2.

7. Significance
• Growth in the minority population
– Between 2010 and 2050 the minority population
age 65 and older is expected to increase from 20%
to 42% of the total population age 65 and older1
• Nursing home use
– Recent studies indicate increase use of nursing
homes among minorities2
1.
2.
U.S. Census Bureau. (2008). An older and diverse nation by midcentury. Available at
http://www.census.gov/newsroom/releases/archives/population/cb08-123.html
Feng et al., (2011). Growth of racial and ethnic minorities in nursing homes driven by demographics and possible disparities in options.
Health Affairs, 30, 7.

8. Research Purpose
• Examine the relationship between the racial
composition of nursing home residents and
nursing home financial performance
• Examine whether financial performance
influenced the relationship the racial
composition of residents and the quality of
care in nursing homes

9. Methods
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Data
– On-Line Survey Certification and Reporting (OSCAR)
• Information on facility structure
– Medicare Cost Report
• Information on revenues and expenses
– Minimum Data Set (MDS)
• Information on residents
– Area Resource File (ARF)
• Information on census, health and social resources
Sample
– Medicare and Medicaid nursing homes in the US between the years of 1999-2004

10. RESULTS: Racial Composition of NH
Residents and Financial Performance
• Nursing homes with no black residents exhibited better
financial and quality outcomes
– Relative to NHs with high proportions of black residents,
NHs with no black residents had higher total profit
margins, higher operating margins, higher operating
revenue per patient day (PPD), higher other revenue per
patient day, and lower percent of Medicaid residents
– NHs with no and medium proportions of Black residents
had fewer quality of care deficiencies and fewer actual
harm citations than nursing homes

11. RESULTS: Financial performance
influenced the relationship the racial
composition of residents and the quality
• Financial performance measures do partially
influence the relationship between racial
composition of residents and quality of care

12. Policy Recommendations
• Increase Medicaid payment to nursing homes
with high proportions of minority residents
• Implement pay-for-performance
• Environmental trends
– Reduced residential segregation
– Lower occupancy rates

13. Thank You