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The Efficiency of Nursing Home Chains and the Implications of Nonprofit Status: A Comment

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  • Kris Knox
  • Eric Blankmeyer
  • J Stutzman

Abstract

Executive Summary. Anderson, Lewis and Webb (1999) find that nursing facilities are relatively cost inefficient, profit-seeking homes are less inefficient than nonprofit facilities and chain facilities are more inefficient than independent firms. The purpose of this comment is to support and extend their findings. We also find that profit-seeking facilities are more efficient than nonprofit homes. However, chain facilities are significantly more efficient when both technical (cost) and allocative (price) efficiency are considered. Hence, we are reluctant to accept their policy recommendation that mergers and subsidies to chain facilities be discouraged.

Suggested Citation

  • Kris Knox & Eric Blankmeyer & J Stutzman, 2001. "The Efficiency of Nursing Home Chains and the Implications of Nonprofit Status: A Comment," Journal of Real Estate Portfolio Management, Taylor & Francis Journals, vol. 7(2), pages 177-182, January.
    • Handle: RePEc:taf:repmxx:v:7:y:2001:i:2:p:177-182
    DOI: 10.1080/10835547.2001.12089639
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