THE EFFECTS OF OWNERSHIP, OPERATING ENVIRONMENT, AND STRATEGIC CHOICES ON NURSING-HOME EFFICIENCY

This article reports on a study of the labor efficiency of 461 nursing homes located in Pennsylvania. Data envelopment analysis was used to estimate efficiency scores. Tobit equations were estimated for the ent ire sample and for subsamples consisting of for-profit (FP) and not-fo r-profit (NFP) nursing homes. The authors found that the major factors explaining efficiency were managerial and environmental characteristi cs such as ownership, occupancy rate, size, payment source, wage rate, and per capita income, rather than quality characteristics of nursing homes. Analysis of the FP and NFP subsamples suggests that many NFP h omes may respond to environmental pressures by increasing their effici ency, whereas FP homes tend to operate at a high level of efficiency i rrespective of environmental and regulatory pressures.