Do For-Profit and Not-for-Profit Nursing Homes Behave Differently?

The purpose of this study was to examine behavioral differences between for-profit (FP) and not-for-profit (NFP) nursing homes. Previous studies have failed to establish consistent behavioral differences. This study uses a simultaneous equation model to control for potential endogeneity among system variables, with model parameters estimated using 3SLS. The study provides evidence that NFPs provide significantly higher quality of care to Medicaid beneficiaries and to self-pay residents than do FPs, as evidenced by better staffing and better outcomes among nursing homes with residents at higher risk for adverse outcomes.