The impact of market and organizational characteristics on nursing care facility service innovation: a resource dependency perspective

Abstract

Objective: Using resource dependency theory as a conceptual framework, this study investigates both the organizational and environmental factors associated with an emerging health care service delivery innovation, the provision of specialty care in designated units in nursing care facilities. We consider two types of specialty units, Alzheimer's Disease and subacute care.

Data sources: The Medicare/Medicaid Automated Certification Survey (MMACS) data file was merged with local market area data obtained from the 1992 Area Resource File and with state level regulatory data.

Study design: The likelihood of providing Alzheimer's Disease or subacute care in dedicated units was estimated by separate logistic regressions.

Principal findings: Results indicate that facilities with fewer Medicare patients are more likely to operate a dedicated Alzheimer's care unit, while facilities located in markets with a large HMO population and greater hospital supply are more likely to operate a subacute care unit. While competition among nursing homes, for the most part, is an incentive to innovate, greater regulatory stringency appears to constrain the development of specialty care units of both types. Finally, organizational characteristics (e.g., size and proprietary status) appear to be important enabling factors influencing the propensity to provide specialty care in dedicated units.

Conclusions: Nursing care facilities are moving toward providing specialty care units partly as a response to a growing demand by resource providers and to maintain a competitive edge in tighter markets. Loosening regulation directed at cost containment would further encourage the development of specialty care but should be preceded by some evaluation of population needs for specialty care and the effectiveness of specialty care units.