Chain-operated nursing homes may want to reconsider how they standardize their operation across the portfolio.
Nursing home chains that customize service delivery and standardize customer mix tend to see an improved financial performance, while nursing home chains that standardize their customer mix tend to have better clinical outcomes.
That’s according to University of South Florida researchers, who also found that having a staff ratio adjusted to the community leads to better financial outcomes.
The study looked at how much nursing home chains should standardize their facilities in three areas — the percentage of Medicaid residents, service offerings such as a special care unit, and the staffing ratio — and what impact it has on a facility’s clinical care, financial performance, and resident welfare. The study used 11 years of U.S. nursing home data from 2005 through 2015 for its findings.
The results showed that chain-belonging nursing homes that normalize their patient mix across the portfolio tend to have improved financial performance. However, customizing the service delivery tends to improve the welfare of residents.
An estimated 60% of nursing homes across the U.S. are chain-operated, the study showed.
The results give chain-operated nursing homes and policymakers guidance for operational goals, as well as for investment decisions in acquiring new properties, Lu Kong, an assistant professor in the School of Information Systems and Management at the University of South Florida’s Muma College of Business, and principal investigator for the study, said in a news release.
The findings were recently published in Manufacturing & Service Operations Management.
The research showed that while the industry remains highly regulated, there may be room for chain-operated facilities to adapt their offerings to each local market.
The study also noted that the COVID-19 pandemic brought the importance of a standardization strategy among chain businesses to the forefront. Along with having uniform infection control, nursing homes also followed the standardized guidance from the Centers for Disease Control and Prevention (CDC).
Research has shown that a standardized approach has been associated with high efficiency, brand consistency, reduced costs, and less waste, according to the news release. Conversely, customizing some services is positively linked with service quality, customer satisfaction, and loyalty.
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