Are nonprofit nursing homes losing ground to for-profit chains?
Dr. Mitchell: We did not see nonprofits exit at a higher rate during our study period of 1991 to 1997. Instead, they are entering the nursing home industry at a stable rate with quality and cost levels greater than those in the past several years. CASE: What are the strategic and public policy implications of your research findings? Dr. Mitchell: From a strategy perspective, it is interesting to note that increased local competition appears to improve service quality and staffing in both nonprofits and for-profits. Also, local competition tends to reinforce the differences in cost and quality observed in the industry overall, with nonprofits continuing to stake out the high-cost, high-quality market. For-profit competition does appear to have down-sides as well, however – when there is a for-profit takeover of a nonprofit, the facility eventually has diminished quality, implying that the for-profit corporation may not be the optimal form of organization in the provision of nursing home
