Research Findings #4: Nursing Homes - Structure and Selected Characteristics, 1996

Jeffrey Rhoades, Ph.D., D.E.B. Potter, M.S., and Nancy Krauss, M.S., Agency for Health Care Policy and Research

Introduction

Because of the dramatic growth in the number of Americans over age 75 and the desire to minimize the duration of expensive inpatient hospital care, data pertaining to the nursing home industry are of critical importance. The trend in long-term care is toward expansion of community-based care for persons with functional limitations. However, there continues to be a subset of individuals who need sophisticated 24-hour skilled supervision. A better understanding of the current nursing home market can contribute to informed decisions about the provision of long-term care.

This report is based on the 1996 Nursing Home Component (NHC) of the Medical Expenditure Panel Survey (MEPS). It provides estimates of the number and distribution of nursing homes by nursing home type, ownership and chain affiliation, certification status, size, and geographic distribution. The estimates of nursing home characteristics presented in this report are derived from information provided by facility administrators and designated staff in sampled nursing homes.

The 1996 MEPS NHC is a national, yearlong survey of nursing homes and their residents. MEPS is the third in a series of surveys sponsored by the Agency for Health Care Research and Quality (AHRQ) to collect information on the health care use and expenditures of the American public. The first survey was the 1977 National Medical Care Expenditure Survey (NMCES), and the second was the 1987 National Medical Expenditure Survey (NMES).

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Findings

In 1996 there were 16,840 nursing homes with three beds or more, for a total of 1,756,800 beds (Table 1). The average size of a nursing home was just over 104 beds. Three-quarters (75.1 percent) of nursing homes had fewer than 125 beds. Nursing homes with 125 beds or more represented only a quarter (24.9 percent) of all nursing homes but almost half (45.5 percent) of all nursing beds.

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Ownership

Approximately 92 percent of nursing homes were privately owned. Of all nursing homes, 65.9 percent were for-profit and 26.2 percent were nonprofit. The remaining 7.9 percent were owned by Federal, State, or local governments. For-profit nursing homes were much more likely than nonprofit nursing homes to be part of a group or chain. Nearly 70 percent of for-profit nursing homes were affiliated with a group or chain, while less than 30 percent of nonprofit nursing homes had such an affiliation (derived using data from Table 1).

Analysis of nursing home type by ownership reveals another unmistakable pattern (Table 2). The for-profit segment of the nursing home market was nearly entirely represented (90.9 percent) by nursing homes with only nursing home beds, as opposed to other, more complex nursing home types (defined in detail in the technical appendix). Nonprofit facilities were more evenly distributed among the three different types of nursing homes, as follows:

*  Nursing homes with only nursing home beds (53.1 percent).

*  Nursing homes with independent living or personal care units (20.8 percent).

*  Hospital-based nursing homes (26.1 percent).

Reflecting this distribution by type of facility, nonprofit facilities were more likely than for-profit facilities to have affiliated non-nursing beds (derived using data from Table 3). Non-nursing beds included personal care and independent living beds.

In each region of the United States, approximately three-quarters of facilities were nursing homes with only nursing home beds. In three of the four regions, the remaining quarter of the facilities were fairly evenly split between nursing homes with independent living or personal care units and hospital-based nursing homes. Only the West failed to follow this pattern. The West had roughly double the proportion of hospital-based facilities found in the Northeast and South Regions of the United States. Hospital-based nursing homes were twice as prevalent in areas that were not metropolitan statistical areas (MSAs) as compared to MSAs.

Facility Certification Status

An important characteristic of nursing homes is certification status. A nursing home can receive certification from both the Medicare and Medicaid programs or from either one separately. In addition, a nursing home may not meet certification criteria or may choose not to participate in the programs. In these cases, the nursing home would be classified as not federally certified. Nearly all nursing homes had some form of certification in 1996. Close to three-quarters (73.2 percent) of all nursing homes, representing four-fifths (80.5 percent) of all nursing beds, were certified by both Medicare and Medicaid (Table 1). However, while 96.3 percent of the beds in these dually certified facilities were certified for Medicaid, only 47.9 percent of the beds were certified by Medicare (Table 3).

A very small percentage of all nursing homes were certified neither by Medicare nor Medicaid (Table 1). If a nursing home was neither Medicare nor Medicaid certified, it was included in the sample if it met both of the following criteria:

*  It was licensed by the State health department or some other State or Federal agency.

*  It provided 24-hour, 7-day, onsite supervision by a registered nurse or licensed practical nurse.

Nursing Bed Characteristics

The distribution of Medicare skilled nursing facility (SNF) beds was quite similar for three regions of the United States (Table 3). In the Midwest, South, and West Regions, approximately 30 to 45 percent of all beds were Medicare certified. In contrast, nearly two-thirds (64.3 percent) of the beds in the Northeast were SNF beds. About 90 percent of nursing beds in all four regions were certified by Medicaid as nursing facility beds.

Facility Size

The overall average size for nursing homes was 104 beds. The size distribution of nursing homes was similar for nursing homes with only nursing home beds and nursing homes with independent living or personal care units (Table 4). Approximately 35 to 45 percent of both types of facilities had 75-124 beds. However, for hospital-based nursing homes the picture was quite different. Less than 25 percent of hospital-based nursing homes had 75-124 beds, and nearly 70 percent had fewer than 75 beds.

Size also varies by ownership and chain affiliation. As facility size increases, the proportion of nursing homes that report independent ownership decreases. However, nursing homes reporting chain affiliation were clustered within a narrow size range--almost half (49.0 percent, based on calculations using data from (Table 4) had 75-124 beds.

The size distribution of nursing homes also differed by region. For the Midwest and West, the most numerous facilities were those with fewer than 75 beds (46.0 and 43.6 percent, respectively). In contrast, the Northeast and South had larger facilities on average; most common were facilities with 75-124 beds (38.8 and 48.2 percent, respectively). The average size of nursing homes by region ranged from a low of 86.2 beds in the West to a high of 129.3 beds in the Northeast (data not shown). Nearly half (46.7 percent) of nursing homes not located in MSAs had fewer than 75 beds, while less than a third (29.1 percent) of nursing homes in MSAs had fewer than 75 beds. Over two-thirds (69.0 percent) of nursing beds were located in MSAs. Nursing homes located outside MSAs were twice as likely to be hospital based.

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