J. R. Stutzman

Comparative Performance and Quality Among Nonprofit Nursing Facilities in Texas

Researchers have given little attention to relative economic efficiency among nonprofit nursing facilities. Presumably, religious-affiliated, government, and private secular nonprofit facilities pursue similar objectives, perform similarly, and receive tax exemptions accordingly. Using modified, translog cost-and profit-function regression analyses, this article rejects the hypothesis of homogeneous performance. In Texas, private secular nonprofit nursing homes are the most cost-efficient, followed by religious-affiliated and then government nursing facilities. When allocation efficiency is also considered, government and private secular facilities have similar overall economic efficiency; religious-affiliated and government facilities are similar as well; however, private secular facilities are significantly more efficient than religious-affiliated homes. Quality appears to be homogeneous among facility classifications. Given these significant differences, policy makers may want to consider the role of relative economic performance when granting nonprofit status to nursing facilities because nonprofit governance boards may allow their organizations to pursue the “socially superior” goal somewhat divergently.

Organizational Efficiency and Quality in Texas Nursing Facilities

Profit-seeking nursing facilities have been found to be overwhelmingly more cost efficient than nonprofit facilities. However, the question remains as to whether these organizational-efficiency differences are the result of operating structural differences (i.e., agency relationship costs) or differences in the quality of care rendered. Using traditional cost- and profit-function regression analyses which include a new index measure for quality, we conclude that quality influences costs and profits marginally, efficiency differences reflect agency costs and differences in organizational goals, and the belief that increases in quality require increases in cost does not hold when facility capacity is significantly underutilized.

Relative Economic Efficiency in Texas Nursing Facilities: A Profit Function Analysis

The purpose of this analysis is to examine the relative economic efficiency of profit-seeking versus nonprofit nursing facilities. A Cobb-Douglas profit function is used on cross-sectional data to determine the technical efficiency, price efficiency, and overall economic efficiency of Texas nursing facilities. Ownership form influences the profit level of the firm. Profit-seeking firms are more economically efficient than their nonprofit counterparts. Inclusion of price efficiency analyses reinforces profit-seeking firms’ superior technical efficiency. Additionally, nursing facilities are price takers in the output market as well as in resource markets, indicating effective industry regulation.

Technical efficiency in texas nursing facilities: A stochastic production frontier approach

A rapidly aging U. S. population is straining the resources available for long term care and increasing the urgency of efficient operations in nursing homes. The scope for productivity improvements can be examined by estimating a stochastic frontier production function. We apply the methods of maximum likelihood and quantile regression to a panel of Texas nursing facilities and infer that the average productivity shortfall due to avoidable technical inefficiency is at least 8 percent and perhaps as large as 20 percent. Non-profit facilities are notably less productive than comparable facilities operated for profit, and the industry has constant returns to scale.

An examination of the relative economic efficiency of commercial vs. cooperative telephone companies

In this study, the authors examine the relative economic efficiency of the commercial and cooperative telephone companies in the United States. A national sample of over 900 firms using annual data for the years 1973 through 1980 is analyzed. A Cobb-Douglas profit function is employed in the study. The results indicate that commercial firms are more profitable than cooperatives (and, therefore, are more economically efficient), that both types of firms are price takers in the output market, that there is evidence of regulatory effectiveness, that market density affects profits, and that commercial firms experience increasing returns to scale while cooperatives do not.