Key Points:
- Small operators (1-4 facilities) provide 23% more direct nursing care hours and 48% more registered nurse (RN) hours per resident compared to large chains
- Mid-sized operators (50-99 facilities) show the highest rate of abuse citations at 11.69%, while small operators maintain the lowest at 5.78%
- Larger chains achieve slightly better outcomes in some areas, including resident functional improvement and lower fall rates
- Staff ratings consistently decline as operator size increases, with small operators averaging 3.00 stars versus 2.40 for the largest chains
- The findings come amid controversy over new CMS minimum staffing standards, which mandate 3.48 nurse hours and 0.55 RN hours per resident daily.
A comprehensive analysis of nursing home performance metrics provided by the Centers for Medicare & Medicaid Services (CMS) has uncovered significant disparities in care quality between small operators and large chains, raising important questions about the ongoing consolidation in the long-term care industry.
The study, which examined staffing levels, quality ratings, regulatory compliance, and resident outcomes across different operator sizes, found that smaller operators consistently outperformed larger chains in several critical areas, particularly in staffing levels and overall quality ratings.
Staffing Levels and Quality Ratings
| Operators with the Following Number of Facilities | Number of Operators | Average Nurse Hours Per Resident Per Day | Average Registered Nurse Hours Per Resident Per Day | Average Staff Rating (out of 5) | Average Health Inspection Rating (out of 5) | Average Quality Rating (out of 5) | Average Overall 5-Star Rating (out of 5) |
|---|---|---|---|---|---|---|---|
| 1-4 facilities | 62 | 4.31 | 0.89 | 3.00 | 2.87 | 3.39 | 2.91 |
| 5-9 facilities | 249 | 3.86 | 0.68 | 2.70 | 2.75 | 3.32 | 2.80 |
| 10-19 facilities | 163 | 3.73 | 0.63 | 2.54 | 2.69 | 3.39 | 2.72 |
| 20-49 facilities | 96 | 3.63 | 0.58 | 2.50 | 2.60 | 3.46 | 2.64 |
| 50-99 facilities | 21 | 3.46 | 0.61 | 2.27 | 2.62 | 3.41 | 2.64 |
| 100-199 facilities | 7 | 3.53 | 0.57 | 2.37 | 2.67 | 3.63 | 2.76 |
| 200+ facilities | 2 | 3.50 | 0.60 | 2.40 | 2.60 | 3.70 | 2.70 |
Facilities operated by small providers (managing 1-4 nursing homes) maintained substantially higher staffing levels, averaging 4.31 nurse hours per resident per day, compared to just 3.50 hours in facilities operated by the largest chains (200+ facilities). The disparity was even more pronounced in registered nurse coverage, with small operators providing 0.89 RN hours per resident daily, nearly 50% more than the 0.60 hours provided by the largest chains.
These staffing advantages translated into better quality measures, with small operators achieving higher ratings across multiple categories in the CMS five-star rating system. Small operators averaged an overall rating of 2.91 stars, while facilities operated by large chains typically scored between 2.64 and 2.76 stars.
Resident Health & Wellness Outcomes
| Operators with the Following Number of Facilities | Average % of Short-Stay Residents Who Made Improvements in Function | Average Number of Hospitalizations Per 1,000 Long-Stay Resident Days | Average Number of Outpatient Emergency Department Visits Per 1,000 Long-Stay Resident Days | Average % of Long-Stay Residents Experiencing One or More Falls With Major Injury | Average % of Long-Stay Residents Who Lose Too Much Weight | Average % of Long-Stay Residents Who Have Symptoms of Depression |
|---|---|---|---|---|---|---|
| 1-4 facilities | 75.40 | 1.67 | 1.49 | 3.66 | 6.25 | 6.90 |
| 5-9 facilities | 75.69 | 1.73 | 1.64 | 3.28 | 5.84 | 7.98 |
| 10-19 facilities | 76.44 | 1.76 | 1.68 | 3.22 | 6.08 | 11.70 |
| 20-49 facilities | 77.74 | 1.71 | 1.70 | 3.24 | 5.63 | 8.51 |
| 50-99 facilities | 75.69 | 1.67 | 1.66 | 3.24 | 6.10 | 15.30 |
| 100-199 facilities | 77.16 | 1.65 | 1.61 | 3.31 | 5.69 | 10.14 |
| 200+ facilities | 77.55 | 1.61 | 1.43 | 2.70 | 6.00 | 8.10 |
However, the relationship between operator size and care quality isn't entirely straightforward. The study revealed that larger operators showed some advantages in specific resident outcome measures. Facilities operated by the largest chains achieved slightly better functional improvement rates for short-stay residents (77.55% compared to 75.40% for small operators) and lower rates of falls with major injury among long-term residents (2.70% versus 3.66%).
Depression rates among long-term residents showed significant variation, with facilities operated by mid-sized chains (50-99 facilities) reporting the highest rate at 15.30%, more than double the rate found in small operator facilities (6.90%). This substantial disparity suggests potential systematic differences in mental health care approaches or resource allocation between differently sized operators.
Abuse & Neglect Citations and Fines
| Operators with the Following Number of Facilities | Percentage of Facilities With an Abuse Icon | Average Number of Fines | Average Amount of Fines in Dollars |
|---|---|---|---|
| 1-4 facilities | 5.78 | 2.20 | $36,611 |
| 5-9 facilities | 9.42 | 1.71 | $39,975 |
| 10-19 facilities | 9.83 | 1.68 | $43,062 |
| 20-49 facilities | 10.92 | 1.69 | $41,365 |
| 50-99 facilities | 11.69 | 1.62 | $48,309 |
| 100-199 facilities | 10.20 | 1.31 | $39,144 |
| 200+ facilities | 8.80 | 1.10 | $34,645 |
Particularly concerning were the findings related to abuse and neglect citations. Mid-sized operators (managing 50-99 facilities) showed the highest percentage of facilities with abuse citations at 11.69%, while small operators maintained the lowest rate at 5.78%. Interestingly, the largest chains performed relatively well in this category, with abuse citation rates of 8.80%.
The data also revealed notable patterns in regulatory fines. While small operators averaged more frequent fines (2.20 per facility), the largest chains averaged both fewer fines (1.10 per facility) and lower fine amounts ($34,645 compared to $36,611 for small operators). However, mid-sized operators faced the highest average fines at $48,309 per facility.
Regulatory Context
These findings come at a crucial time for the nursing home industry. In April, the CMS published its minimum staffing standards for long term care facilities (LTCs) final rule, which mandated the following minimum staffing levels in LTCs:
- 3.48 Nurse Hours Per Resident Per Day
- 0.55 Registered Nurse Hours Per Resident Per Day
LTCs have two years to implement the minimum nurse hours and three years to implement the minimum registered nurse hours.
However, this has faced fierce opposition from industry groups, with 21 states filling a joint lawsuit against the CMS.
What’s more, following the reelection of President Trump, many experts within the industry are expecting the new administration to cancel the minimum staffing mandate.
This study shows that when measured on many metrics, care quality decreases as nursing hours and registered nursing hours per resident decreases.
The industry is also witnessing increasing consolidation as larger chains acquire independent facilities and smaller operators. While economies of scale might benefit certain aspects of operation, the data suggests that this trend could potentially impact care quality, particularly in areas requiring intensive staff interaction and personalized attention.
Conclusion
As the nursing home industry evolves, these findings highlight the complex relationship between operational scale and care quality. While larger operators achieve certain efficiencies, smaller operators consistently demonstrate stronger performance in staffing levels and quality metrics. As debates over minimum staffing requirements continue, this research provides clear evidence linking higher staffing levels to better outcomes. These insights should inform both regulatory policy and consolidation decisions to ensure operational scale doesn't compromise quality of care for residents.
