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Cost (In)Efficiency and Institutional Pressures in Nursing Home Chains

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  • Cécile Martin
  • Tiphaine Jérôme

Abstract

Over the past 10 years, merger activities in the private for-profit nursing home industry have been increasing in Europe. In this paper, we investigate chain affiliation’s influence on the performance of lucrative nursing homes. We measure performance using a cost frontier estimated by stochastic analysis on a sample of 370 French for-profit nursing homes. We find that cost efficiency decreases with the number of facilities in a chain. We also identify different external actor types in nursing homes’ institutional environment and test their influence. We show that nursing home chains’ cost efficiency improves when local governments and shareholders exert pressure. Our results are robust to alternative model specifications and another definition of costs. Overall, our findings inform researchers, as well as standards setters, of the relevance of chain affiliation and of the role of institutional pressures regarding cost containment at the nursing home level.

Suggested Citation

  • Cécile Martin & Tiphaine Jérôme, 2016. "Cost (In)Efficiency and Institutional Pressures in Nursing Home Chains," European Accounting Review, Taylor & Francis Journals, vol. 25(4), pages 687-718, October.
    • Handle: RePEc:taf:euract:v:25:y:2016:i:4:p:687-718
    DOI: 10.1080/09638180.2016.1169937
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    References listed on IDEAS

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    1. Laura Di Giorgio & Massimo Filippini & Giuliano Masiero, 2014. "The relationship between costs and quality in nonprofit nursing homes," IdEP Economic Papers 1402, USI Università della Svizzera italiana.
    2. Martin, Cécile, 2014. "Concurrence, prix et qualité de la prise en charge en EHPAD en France : Analyses micro-économétriques," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/13712 edited by Dormont, Brigitte.
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    Cited by:

    1. Ferran Espuny Pujol & Ruth Hancock & Morten Hviid & Marcello Morciano & Stephen Pudney, 2021. "Market concentration, supply, quality and prices paid by local authorities in the English care home market," Health Economics, John Wiley & Sons, Ltd., vol. 30(8), pages 1886-1909, August.

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