Doing Better to Do Good

The performance of nursing homes has been the subject of public policy concern for some time. Increased scrutiny was imposed by the 1987 Nursing Reform Act and subsequently reinforced by a number of quality initiatives implemented in the 1990s. In 2005, the Center for Medicaid Services began publicly reporting quality measures for individual facilities. The objective of this study is to determine whether homes that develop new strategies and structures in response to environmental demands achieve better performance.

In this study, the strategies are exemplified by the implementation of subacute rehabilitative care services in nursing homes. Demands on nursing homes to provide a higher level of care and to admit patients with increasingly complex needs is well documented. This is a result of patients who require a lower level of care opting for assisted living facilities over nursing homes. The researchers measured the nursing homes' strategic adaptation by reporting whether they offered certain resources such as a ventilator care unit, a rehabilitation unit, a hospice program, as well as what kinds of staff they employed. Nursing home performance was measured by occupancy rate and source of revenue. The researchers found the organizations that adjusted their structures and strategies to address changes in the environment achieved superior performance. These results support the importance of proactive strategic leadership in nursing homes.