AbstractsMedical & Health Science

Purpose: The purpose of the study was to examine if strategic groups in the nursing home industry can be determined by examining how facilities apply their technology and how facilities commit their resources. The study also determined if these groups can be defined using Porter's generic strategies and whether the different groups have varying strategic-performance relationships. Methodology: The study began by performing a factor analysis using scope (technology) and resource commitment variables from the Minimum Data Set (MDS) and the Online Survey Certification and Reporting (OSCAR) system. The newly defined variables were used in a cluster analysis to identify the different clusters. The clusters were classified using Porter?s generic strategy model. Once the strategic groups were identified, the study analyzed the strategic-performance relationships using negative binomial, ordinary least squares regression (OLS), generalized linear model (GLM) with gamma distribution and ordered logit analytical tools. Quality dependent variables included quality of care deficiencies, long term care (LTC) pressure sore prevalence and post acute pressure ulcer incidence, LTC activities of daily living (ADL) decline, post acute walking improvement, LTC bowel and bladder decline and LTC restraint. Financial measures included cost per resident day, operating margin and total margin. Results: The study identified four strategic groups (differentiator, cost leader, rehab focus, and specialty care focus) and a lack of strategy group. Differentiators, rehab focus and specialty care focus groups had less quality of care deficiencies than the lack of strategy group and cost leaders. Differentiators generally had better long term care quality outcomes compared to other strategic groups and the lack of strategy group. Cost leaders, differentiators and lack of strategy groups had lower cost than the rehab focus and specialty care focus groups. Cost leaders, differentiators and rehab focus group had better financial performance than the specialty care focus group and lack of strategy group. Conclusions: The study indicates that using technology and resources commitments is an effective way of identifying strategies groups. The study also found that some strategic groups have better financial performance than other strategic groups or than nursing homes that have no strategy at all. Nursing homes that provide a high level of technology had better quality, without increased cost or sacrificing financial performance. The study also suggests that nursing homes that service residents with high cost conditions may not be adequately reimbursed.