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A Pay for QualityEfficiency System: A Skilled Nursing Home Balanced Scorecard Approach


A Pay for Quality-Efficiency System: A Skilled Nursing Home Balanced. Scorecard Approach ... Sam Marathe, MD, JD, Ph.D. Assistant Professor. College of Health ... – PowerPoint PPT presentation

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Title: A Pay for QualityEfficiency System: A Skilled Nursing Home Balanced Scorecard Approach

A Pay for Quality-Efficiency System A
Skilled Nursing Home Balanced Scorecard Approach
  • Thomas T.H. Wan, Ph.D., M.H.S.
  • Professor and Associate Dean For Research
  • Jackie N. Zhang, MD, Ph.D.
  • Assistant Professor
  • Sam Marathe, MD, JD, Ph.D.
  • Assistant Professor
  • College of Health and Public Affairs
  • University of Central Florida

1. Value Proposition
  • In a competitive environment, nursing homes are
    driven to achieve cost-effective, quality, and
    efficiency for residents. The focus of the
    research and development initiative, conducted by
    the UCF research team, is to serve the
    information needs for achieving comparative
    effectiveness and enable nursing home management
    to function efficiently and effectively on the
    basis of evidence-based approach.

2. Nursing Home Informatics Research
Practice-based research
  • Evidence-based practice research
  • Nursing home performance improvement
  • Data mining profiling of best practices
  • Assessment of quality-efficiency vs. technical
  • Executive decision support system

3. Outcomes Evaluation An example
4. Developing a Graphic-User Interface (GUI)

Data Sharing
Data Mining
Constraint-Oriented Reasoning Methodology
Simulation Optimization Benchmarking
Exploratory Statistical Modeling Structural
Equation Modeling Measurement models
Structural relationships
Graphics-User Interface (GUI)
Decision Making
5. Critique on the Pay-for-Quality-System
  • The emerging pay-for-performance system centers
    on quality to incentivize health care providers,
    and fails to include efficiency or productivity
    in performance evaluation.

6. An Evidence-Based Approach to Nursing Home
Performance Study

1) Aims
  • This studys aims are to
  • Demonstrate the feasibility of developing a
    quality- efficiency measurement.
  • Evaluate its applicability as a method for
    benchmarking the performance.
  • Compare the pay-for-quality and
    pay-for-quality-efficiency systems in terms of
    their relative performance rankings.

2) Methodology
  • Data All Florida skilled nursing homes certified
    by Medicare or Medicare with complete data
    (Medicare Cost Reports, MDS OSCAR) were
    included (N396).
  • Design Longitudinal from 1999-2003.
  • Measurement Data envelopment analysis (DEA) to
    generate the facility specific technical
    efficiency scores based on five years of data.
  • Analytical Modeling Structural equation model

3) Analytical Strategies
  • Modeling the determinants of nursing home quality
  • Modeling the determinants of technical efficiency
  • Optimizing the quality-efficiency system

4) Resident Outcomes/Quality
  • 1/ (deficiency citations for staffing.
  • 1/ (deficiency citations for nursing care
  • 1/ (pressure ulcer rate) 2) 1/ (urinary tract
    infection rate) and 3) 1/ (physical restraint

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4) Efficiency Score
  • Cost efficiency that is, the average operating
    cost per resident is a negative aspect of
    efficiency hence, this inefficiency indicator is
    inverted 1/ (average operating cost per
  • Process efficiency --the average occupancy rate
    reflects the process efficiency.
  • Productive efficiency--the total skilled nursing
    inpatient days, intermediate nursing inpatient
    days, and other long-term care inpatient days. A
    technical efficiency TE) score is computed.

5) Quality-Efficiency (QE) Score
  • Quality indicators as output variables staff
    adequacy, nursing care quality, and resident
  • Input variables expenses for general services,
    routine services, and ancillary services.
  • Iota score for QE is computed for each facility.

6) Relationship Between TE and QE
  • the improvement of efficiency should not be at
    the expense of quality. Thus, the emphasis on an
    integrated efficiency-quality approach to the
    provision of nursing home care will enable the
    nursing home industry to be more competitive.
    Clearly, the objective is to achieve optimal
    levels of efficiency and effectiveness in all

7) Findings for Benchmarking
  • -The quality-efficiency scores were successfully
    developed using the DEA approach. Relative
    rankings of nursing home performance in terms of
    quality-efficiency were produced as the balanced
    scorecard, with the maximum score of 100. The
    variations of the performance scores allow us to
    identify the top performers (top 25) and low
    performers (bottom 25) among all studied skilled
    nursing homes in Florida.
  • -The comparisons between the pay-for-quality and
    pay-for-quality- efficiency systems suggest that
    two systems yield different benchmarks for
    nursing homes performance.
  • -The correlation between the two performance
    scores (quality-efficiency and technical
    efficiency) for the panel of the same nursing
    homes appears to be moderate but statistically

7. Executive Decision Support System Software
expert system design
  • Graph 1 Florida Nursing Home Performance
  • Graph 2 Technical Score and Ranking of the

Graph 4 Decision Support System
8. Potential Collaboration
  • Nursing home informatics research evaluation
  • Data sharing IT infrastructure
  • Monitoring performance

9. Discussion
  • Collaboration of Nursing Home Informatics
  • Consultation and technical assistance
  • Dissemination research

Related Publications
  • Wan, T.T.H., Breen, J., Zhang, J.N., and Unruh,
    L. Evidence-based Approach to Improving Nursing
    Home Quality. (under review)
  • Zhang, N.J., Paek, S., and Wan, T.T.H.
    Reliability Estimates of Clinical Measures
    between Minimum Data Set and Online Survey
    Certification and Reporting Data of U.S. Nursing
    Homes. Medical Care, 2008.
  • Breen, J., Wan, T.T.H.,Zhang, N.J., and Marathe,
    S. Doctor-Patient Communication Examining
    Innovative Modalities vis-à-vis Effective
    Patient-Centric Care Management Technology.
    Journal of Medical Systems, 2008.
  • Zhang, J. N., Unruh, L., and Wan, T.T.H. Has the
    Medicare Prospective Payment System Led to
    Increased Nursing Home Efficiency. Health
    Services Research 43(3) 1043-1061, 2008.
  • Zhang, J. and Wan, T.T.H. Effects of
    Institutional Mechanisms on Nursing Home
    Quality. Journal of Health and Human Services
    Administration 29(4) 380-408, 2007.
  • Unruh, L., Zhang, J., and Wan, T.T.H. Impact of
    Medicare Reimbursement Changes on Staffing and
    the Quality of Nursing Homes. International
    Journal of Public Policy, 1(4) 421-434, 2006.
  • Wan, T.T.H., Zhang, J., and Unruh, L. Predictors
    of Resident Outcome Improvement in Nursing
    Homes. Western Journal of Nursing Research,
    28 (8) 974-993, 2006.
  • Zhang, J., Unruh, L., Liu, Rong, and Wan, T.T.H.
    " Minimum Nurse Staffing Ratios for Nursing
    Homes." Nursing Economics 24(2) 78-85, 2006.
  • Zhang, J. and Wan, T.T.H. The Measurement Model
    of Nursing Home Quality A Two-Level Analysis.
    Journal of Medical Systems, 29(4)401-411,2005.
  • Unruh, L. and Wan, T.T.H. A Systems Framework
    for Evaluating Nursing Care Quality in Nursing
    Homes, Journal of Medical Systems, 29(2),
    197-212, 2004.
  • Wan, T.T.H. Nursing Care Quality in Nursing
    Homes Cross-sectional Versus Longitudinal
    Analysis. Journal of Medical Systems 27(3)
    283-295, 2003.
  • Yeh, S.C., Wan, T.T.H., and Neff-Smith, M.
    Subacute Care in Nursing Homes. Journal of
    Nursing Administration 32(7/8) 369-370, 2002.

Thank You
  • Thomas T.H. Wan
  • twan_at_mail.ucf.edu
  • Phone 407-823-3678
  • Fax 407-823-0744
  • Address Doctoral Program in Public Affairs
  • College of Health Public Affairs
  • University of Central Florida
  • IST Building Room 108
  • 3280 Progress Drive
  • Orlando, FL 32826

The project is partially supported by a research
grant from NIH-NINR (2003-2008).
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