The Effects of Chains on the Measurement of Competition in the Nursing Home Industry

Richard A. Hirth, Qing Zheng, David C. Grabowski, David G. Stevenson, Orna Intrator, Jane Banaszak-Holl

Research output: Contribution to journalArticleResearchpeer-review

3 Citations (Scopus)

Abstract

Consistently accounting for more than 50% of the nursing homes in the United States, corporate chains have played an important role in the industry for several decades. However, few studies have explicitly considered the role of chains in measuring competition in nursing home markets. In this study, we use a newly developed database tracking common ownership over a period of nearly two decades to compare chain-adjusted and unadjusted measures of competition at the county and 25 km fixed-radius levels and explore how the differences would affect the assessment of local market structure. On average, the chain-adjusted Herfindahl–Hirschman Indexes (HHIs) are about 0.02 higher than the unadjusted HHIs. Each year, about 20% to 22% of the counties would appear more concentrated when recalculating HHIs accounting for common ownership. Evidence suggests that nursing home chains tend to focus more on expanding access to new markets within a state than to increasing market power within a smaller local market.

Original languageEnglish
Pages (from-to)315-336
Number of pages22
JournalMedical Care Research and Review
Volume76
Issue number3
DOIs
Publication statusPublished - 1 Jun 2019
Externally publishedYes

Keywords

  • chains
  • competition
  • economics
  • long-term care
  • nursing home

Cite this

Hirth, Richard A. ; Zheng, Qing ; Grabowski, David C. ; Stevenson, David G. ; Intrator, Orna ; Banaszak-Holl, Jane. / The Effects of Chains on the Measurement of Competition in the Nursing Home Industry. In: Medical Care Research and Review. 2019 ; Vol. 76, No. 3. pp. 315-336.
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The Effects of Chains on the Measurement of Competition in the Nursing Home Industry. / Hirth, Richard A.; Zheng, Qing; Grabowski, David C.; Stevenson, David G.; Intrator, Orna; Banaszak-Holl, Jane.

In: Medical Care Research and Review, Vol. 76, No. 3, 01.06.2019, p. 315-336.

Research output: Contribution to journalArticleResearchpeer-review

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