Financial Performance & Quality of Care in Dutch Nursing Homes
In the nonprofit nursing home sector in the Netherlands prices for provided care are fixed. The fixed prices enable institutions to save money by operating efficiently and generate excess revenues. Consequently, the institutions need to be able to reinvest excess revenues in full into quality improvements due to the nonprofit market. The purpose of this study was to examine the relationship between financial performance and quality of care in Dutch nursing homes.
Three data source, Digi-MV-dataset, dataset ‘Zichtbare Zorg’ and CVZ data were merged before analyzing. Quantitative analyses were performed using a multivariable linear regression on cross-sectional data of 2012 (N=319). Quality of care, the dependent variable, was expressed in Consumer Quality (CQ) indicators and in care-related outcome (CRO) indicators. We selected solvency ratio and profit to represent the financial performance, the independent variable. In addition, we selected urbanization, care intensity, total operating budget and part-time quote as control variables.
No significant relationship between the financial performance and quality of care with the CRO indicators was observed. However, we identified a significant relationship between the financial performance and quality of care with the CQ indicators. All control variables had a negative significant relationship with quality of care with the CQ indicators.
Nursing homes were not always able to reinvest excess revenues in quality of care. This might indicate waste of money, inefficiencies in labor processes or investments. Cutbacks will not necessarily influence the quality of care considering our results. However, to ensure no relationship between financial performance and quality of care arise when expenditures are reduced, further research is required.
By Aniek Bresser, read the full thesis