The impact of nursing quality on nursing home efficiency: evidence from Taiwan

Purpose - The purpose of this paper is to investigate the impact of nursing quality on Taiwan nursing homes, and differences of efficiency among different management types of nursing homes. Design/methodology/approach - This study employs data envelopment analysis (DEA) to investigate the efficiency of nursing homes with and without quality variable. The impacts of nursing quality on the efficiency of nursing homes were studied. Finally, Tobit regression is used to explore the factors influencing efficiency in nursing homes. Findings - The analysis shows that nursing quality has significant impacts on operating efficiency of nursing homes. When quality variables are included, all efficiencies were significantly improved, except scale efficiency of government-expense nursing homes (GEH); return of scale status of GEH decrease substantially; the licensed nursing staff can always improve efficiency; higher occupancy rate increase efficiency; private-operated veteran homes performs better than government-operated homes. Practical implications - Nursing quality has a significant effect on the efficiency measures. Thus, the nursing quality cannot be ignored in assessing the performance of nursing homes. Otherwise, it may result in biased results. The efficiencies of private-operated nursing homes are better than the government operation. Government-operated nursing homes should take private nursing homes as the benchmark. Originality/value - The paper demonstrates the nursing quality is an important factor in the efficiency measure of nursing homes. It also shows that privatized operation has higher efficiency than the government operation.