Factors Associated with Increasing Nursing Home Closures

PURPOSE: We determine the rate of nursing home closures for 7 years (1999-2005) and examine internal (e.g., quality), organizational (e.g., chain membership), and external (e.g., competition) factors associated with these closures. DESIGN AND METHOD: The names of the closed facilities and dates of closure from state regulators in all 50 states were obtained. This information was linked to the Online Survey, Certification, and Reporting data, which contains information on internal, organizational, and market factors for almost all nursing homes in the United States. RESULTS: One thousand seven hundred and eighty-nine facilities closed over this time period (1999-2005). The average annual rate of closure was about 2 percent of facilities, but the rate of closure was found to be increasing. Nursing homes with higher rates of deficiency citations, hospital-based facilities, chain members, small bed size, and facilities located in markets with high levels of competition were more likely to close. High Medicaid occupancy rates were associated with a high likelihood of closure, especially for facilities with low Medicaid reimbursement rates. IMPLICATIONS: As states actively debate about how to redistribute long-term care services/dollars, our findings show that they should be cognizant of the potential these decisions have for facilitating nursing home closures.