Nursing Home Ownership Trends and Their Impact on Quality of Care. RESULTS

08/01/2009

Facility-Level or Chain-Level Information. Based on the master file created above, we generated descriptive tables to summarize the available data. First, we sought to list the owners of the largest number of nursing homes in Texas. This can be done two ways: first, through the top-level controlling entity provided by the OMT data (Table 1), which is shown for the most recently available data; and second, by the multi-facility organization field of the OSCAR (Table 2), which is presented by year.

TABLE 1: Top 20 Top-Level Nursing Home Owners Based on Texas OMT Data, 2007
  Rank   Company   Number of  
Facilities
  Beds   Type
1 Senior Living Properties 50 4530 Limited Liability Company
2 Pyramid Healthcare Corporation 10 999 For-Profit Corporation
3 Advanced Living Technologies 7 737 Not-For-Profit Organization  
4 Evangelical Lutheran Good Samaritan Society 6 502 Not-For-Profit Organization
5 State of Texas Veterans Land Board 6 960 State
6 HCRA of Texas 6 779 For-Profit Corporation
7 Pinnacle Health Facilities 6 1004 Limited Partnership
8 Four Seasons Nursing Centers Inc. 5 690 For-Profit Corporation
9 Senior Care Consultants Inc. 5 809 For-Profit Corporation
10 Living Centers of Texas Inc. 5 621 For-Profit Corporation
11 Conifer Care Inc. 5 459 For-Profit Corporation
12 Grace Care of Texas Inc. 5 616 For-Profit Corporation
13 Missionary Baptist Foundation of America   5 348 Not-For-Profit Organization
14 Senior Care Management 5 573 For-Profit Corporation
15 Honor Services Inc. 4 424 For-Profit Corporation
16 Buckner Retirement Services 4 226 Not-For-Profit Organization
17 Diversicare Leasing Corporation 4 320 For-Profit Corporation
18 BMW Healthcare Inc. 3 524 For-Profit Corporation
19 Southwest LTC 3 450 Limited Partnership
20 Christian Care Centers Inc. 3 407 Not-For-Profit Organization
SOURCE: Texas Ownership Management and Tracking Data (OMT).

In Table 1, perhaps the most interesting feature is the absence of many large national chains operating in the Texas market, as well as the small number of facilities in the top ownership entities in the Texas market. Indeed, only two entities have ten or more facilities. The primary reason for these features is that many chains use a top-level ownership structure that is a facility-level company, as opposed to a chain level company. That is, each facility is technically its own company (e.g., an LLC), even though it is also own and managed under a larger multi-facility organization. The exception in the list is Senior Living Properties which operates as chain level company by creating a limited liability entity that owns all the nursing homes. Other large chain companies changed to a facility-level structure by creating a limited liability structure for each nursing home. This becomes clearer in the context of the corporate structure figures (Figures 9a-9i). The other top-level owner structures are for-profit corporations, not-for-profit corporations, and LPs.

Information in Table 2 is from OSCAR and is based on facility self-reported information on the multi-facility organization affiliation provided during the annual survey. The information provides context for where to focus analyses of the OMT data. The top 20 multi-facility organizations are listed for each year from 2000 to 2007. Unfortunately, end-of-year 2007 facility numbers from OSCAR are not available to us, as we only have the first two quarters of data from that year; however, the trends from earlier in the decade were consistent over time. These tables demonstrate the large amount of change within the top 20 companies in Texas between 2000 and 2007. A large portion of this change is due to sales, while some is due to restructuring. Mariner Health Care/Sava Senior Care demonstrates this trend over time. Mariner Health Care owned 62 nursing homes in 2002; Mariner went through a bankruptcy and was purchased in 2004 by a private equity firm, North America Senior Care. Beginning in 2005, these facilities transitioned to operate under the name of Sava Senior Care, and the conversion was completed in 2006. At that time, Sava operated 47 nursing homes in the Texas market according the OSCAR data, with each being operated as a facility-specific limited liability entity. Sava does not show up on the top 20 top-level owners in the OMT list in Table 1, since the controlling entity of these facilities is at the facility level. Similarly, according to OSCAR data, Daybreak Healthcare operated 40 facilities in 2002 and by 2006 had 77. In growing its company, Daybreak was buying facilities from Texas Health Enterprises and others. Similar to Sava, Daybreak does not show up on the OMT list of top-level owners because Daybreak structured the company to have facility-level ownership instead of chain-level by creating a facility-specific limited partnership entity for each nursing home.

Corporate Structure and Ownership Type. Concurrent with the turnover among nursing home ownership is a change in the ownership types of Texas nursing homes. Figure 1 uses an ownership type field available in the OMT data to indicate whether facilities are owned by a for-profit corporation, not-for-profit corporation, LLC, GP, LP, LLP, or other (e.g., government owned) structure. As can be seen in the figure, the percent of facilities that use the for-profit corporate structure decreases over the study period (from 51 percent in 2000 to 28 percent in 2007), while the percent owned by an LLC and a partnership of some kind (the vast majority use the LP structure in particular) goes up substantially--from 12 percent in 2000 to 23 percent in 2007 for LLCs, and from 13 percent to 33 percent for partnerships. The incidence of facilities using the not-for-profit corporate structure, meanwhile, was relatively stable over the observation period. Both for-profit and not-for-profit facilities in Texas used structures such as LLCs and LPs, but for-profit facilities tend to employ these structures to a much greater extent (65 percent of for-profit facilities used either a LLC or LP structure in 2007, compared to 21 percent of not-for-profit facilities). Similarly, although chain and non-chain facilities used these alternate structures, chain facilities use them to a greater extent (66 percent of chain facilities used either a LLC or LP structure in 2007, compared to 48 percent of non-chain facilities).

TABLE 2: Top 20 Nursing Home Chains in Texas Based on OSCAR Data, 2000-2007
  2000   Chain Name   Number     2001   Chain Name   Number  
1 Texas Health Enterprises 69 1 Texas Health Enterprises 60
2 Mariner Health Care 40 2 Senior Living Properties 45
3 Senior Living Properties 39 3 Mariner Health Care 45
4 Integrated Health Services 26 4 Integrated Health Services 34
5 Living Centers of Texas 19 5 Summit Care Corp 18
6 Columbia HCA Healthcare 18 6 Living Centers of America 16
7 Summit Care Corp 18 7 Living Centers of Texas 16
8 Living Centers of America 18 8 Pyramid Health Care 14
9 Cantex Healthcare Centers 13 9 Cantex Healthcare Centers 14
10 Autumn Hills Convalescent 11 10 Texas Partners LP 13
11 Texas Partners LP 11 11 Complete Care Services 12
12 Pyramid Health Care 11 12 Senior Care Consultants 9
13 Sunrise Healthcare 10 13 Ballantrae Healthcare 8
14 Healthcare Centers of Texas   8 14 Autumn Hills Convalescent Center   8
15 Keystone Services 7 15 Sunrise Healthcare 8
16 Paragon Health Network 7 16 Manorcare 8
17 Complete Care Services 7 17 Columbia HCA Healthcare 8
18 Senior Care Consultants 7 18 Preferred Care Inc. 6
19 Sun Healthcare Corporation 6 19 Advanced Living Technologies 6
20 BMW Healthcare 6 20 Evangelical Lutheran Good Samaritan Society   6
2002 Chain Name Number 2003 Chain Name Number
1 Mariner Health Care 62 1 Mariner Health Care 59
2 Senior Living Properties 46 2 Daybreak Healthcare 53
3 Daybreak Healthcare 40 3 Senior Living Properties 47
4 Integrated Health Services 30 4 Nexion Health 23
5 Nexion Health 21 5 Integrated Health Services 18
6 Senior Health Properties of Texas   16 6 Cantex Healthcare Centers 14
7 Manorcare 14 7 Pyramid Health Care 13
8 Pyramid Health Care 14 8 Manorcare 13
9 Ballantrae Healthcare LLC 14 9 Ballantrae Healthcare LLC 11
10 Summit Care 14 10 Senior Health Properties of Texas 11
11 Cantex Healthcare Centers 13 11 Living Centers of Texas 11
12 Living Centers of Texas 9 12 Senior Management Services of America   10
13 Regency Nursing and Rehab 7 13 Century Care 9
14 Keystone Services 7 14 Summit Care 9
15 Senior Care Consultants 7 15 Lyric Health Care Holdings 8
16 Triad Hospitals 7 16 Regency Nursing and Rehab 7
17 Memorial Hermann Healthcare System 6 17 Acquisition Corp 7
18 Centers for Long Term Care 6 18 Senior Center Consultants 7
19 Sun Healthcare Corporation 6 19 Fountain View 7
20 Century Care 6 20 Health of Texas Health Care and Rehab 6
2004 Chain Name Number 2005 Chain Name Number
1 Daybreak Healthcare 71 1 Daybreak Healthcare 70
2 Mariner Health Care 54 2 Senior Living Properties 41
3 Senior Living Properties LLC 47 3 Nexion Health 22
4 Nexion Health 24 4 Sava Senior Care 22
5 Living Centers of Texas Inc. 16 5 Mariner Health Care 19
6 Senior Health Properties of Texas 13 6 Senior Health Properties 17
7 Pyramid Health Care 13 7 Cantex Healthcare Centers 13
8 Cantex Healthcare Centers 12 8 Centers for Long Term Care 11
9 Skilled Healthcare Group 11 9 Legacy Care Centers 11
10 Manorcare 10 10 Skilled Healthcare Group 11
11 Legacy Care Centers 9 11 P and M Healthcare Enterprises 10
12 THI Holdings 9 12 Pyramid Health Care 10
13 Century Care 8 13 Trans Health Inc. 9
14 Trans Health Inc. 8 14 Lyric Health Care Holdings 8
15 Health Mark Partners LLC 8 15 Manorcare 8
16 Senior Management Services of America   8 16 Southwest Long Term Care 8
17 Triad Hospitals Inc. 7 17 Senior Management Services of America   8
18 Lyric Health Care Holdings 7 18 Triad Hospitals Inc. 7
19 Regent Care Center 7 19 Health Services Management 6
20 Senior Care Consultants 7 20 Regency Nursing and Rehab Center 6
2006 Chain Name Number 2007 Chain Name Number
1 Daybreak Healthcare 77 1 Daybreak Healthcare *
2 Sava Senior Care 47 2 Sava Senior Care *
3 Senior Living Properties 43 3 Senior Living Properties *
4 Nexion Health 26 4 Nexion Health *
5 P and M Healthcare Enterprises 18 5 Cantex Healthcare Centers *
6 Senior Health Properties of Texas 14 6 P and M Healthcare Enterprises *
7 Cantex Healthcare Centers 12 7 Senior Health Properties of Texas *
8 Skilled Healthcare Group 11 8 Fundamental Health *
9 Manorcare 10 9 Skilled Healthcare Group *
10 Preferred Care 10 10 Stone Gate Senior Care *
11 Trisun Healthcare 10 11 Preferred Care *
12 Southwest Long Term Care 9 12 Southwest Long Term Care *
13 Pyramid Health Care 9 13 Pinnacle Health Facilities *
14 Senior Management Services of America   9 14 Lyric Health Care *
15 Centers for Long Term Care 9 15 Manorcare *
16 Senior Care Consultants 9 16 Senior Care Consultants *
17 Stone Gate Senior Care 8 17 Legacy Care Centers *
18 Legacy Care Centers 8 18 Telesis *
19 Fundamental Health 8 19 Senior Management Services of America   *
20 Lyric Health Care 8 20 THI Holdings *
SOURCE: Online Survey and Certification Automated Record (OSCAR) data.

* Data available for only the first two quarters of 2007, however the trends from earlier in the decade were consistent over time.

 

FIGURE 1: Ownership Types Over Time
Bar Chart: See Appendix Table A-1 for data used to create this chart.
SOURCE: Texas Ownership Management and Tracking Data (OMT).
NOTE: Data used to create this figure available in Table A-1.

FP = for-profit corporation; NFP = not-for-profit organization; LLC = limited liability company; GP/LP/LLP = general partnership/limited partnership/limited liability partnership.
Other includes government owned facilities, facilities owned by trusts.

Table 3 presents 2007 final-level ownership based on the OMT data and shows the individuals with the greatest presence in the Texas nursing home market. As can be seen, the biggest players tend to be those individuals with large stakes in the biggest chains, with the exception of Onex American Holdings, a private equity company. The level of detail shown in this table far exceeds the capacity of OSCAR or even PECOS, which has no information on individual owners. Furthermore, this table demonstrates that OMT is capable of showing interesting chain interactions that OSCAR has no way of depicting. For example, in OSCAR, one could not see that LG and MF (the OMT data include individual names of investors, but we report only initials for these individuals throughout our report) have ownership stakes in both Sava Senior Care (which emerged from Mariner Health Care) and Trans Health Care (THI, which emerged from Integrated Health Services). These details offer a more detailed picture of the Texas nursing home market than previously available.

  TABLE 3: Top 21 Final Level Nursing Home Owners Based on Texas OMT Data, 2007  
  Rank   Name   Number of  
Facilities
Type Associations
1 LG 78 Limited Partner THI, Sava Senior Care
2 MF 78 Limited Partner THI, Sava Senior Care
3 JG 60 General Partner Daybreak Venture (Management)
4 DR 60 Limited Partner Daybreak Venture (Management)
5 EB 60 General Partner Daybreak Venture (Management)
6 SR 60 General Partner Daybreak Venture (Management)
7 DM 60 Limited Partner Daybreak Venture (Management)
8 BP 60 Limited Partner Daybreak Venture (Management)
9 JE 50 Member Senior Living Properties
10 LB 50 Member Senior Living Properties
11 AE 50 Member Senior Living Properties
12 PL 41 Limited Partner None
13 MD 41 Limited Partner None
14 FK 28 Sole Shareholder   Nexion Health
15 BB 28 Sole Shareholder Nexion Health
16 DB 26 General Partner Daybreak Venture (Management)
17 TS 25 Limited Partner Pinnacle Health Facilities
18   Onex American Holdings   20 Limited Partner None
19 RSH 18 Sole Member PM Management/Trisun Health (Mgmt)  
20 WD 18 Sole Member PM Management/Trisun Health (Mgmt)
21 RP 18 Limited Partner Southwest LTC
SOURCE: Texas Ownership Management and Tracking Data (OMT).

Ownership and Management Change. Another way of investigating changes in nursing home ownership and management is depicted in Figure 2 and Figure 3, which show the incidence of ownership and management changes by year, respectively. These figures, which derive from OMT data on both top-level and final-level entities, break down the total number of changes into those we consider real and those that are only nominal. The latter category includes changes at the top level of ownership or management that do not substantially change the core owners of the facilities. This classification is based on the presence of any entity with a 20 percent or greater stake in both the pre and post-change periods, which would indicate that the name and ID of the top entity changed while the core ownership did not. Most of the changes are indeed real, although many ownership changes and, to a lesser extent, management changes display nominal changes only. The highest rate of both real and nominal changes occurred in 2003. A full 28 percent of ownership changes were nominal changes where the top-level ownership or management changed but the core owners of 20 percent or greater stake did not change. Such occurrences are indicative of the desire to change ownership structure based on various legal and economic considerations.

FIGURE 2: OMT Ownership Changes by Year
Bar Chart: See Appendix Table A-2 for data used to create this chart.
SOURCE: Texas Ownership Management and Tracking Data (OMT).
NOTE: Data used to create this figure available in Table A-2.

* 2007 results are based on a 2x extrapolation of the first two quarters of the year.

 

FIGURE 3: OMT Management Changes by Year
Bar Chart: See Appendix Table A-3 for data used to create this chart.
SOURCE: Texas Ownership Management and Tracking Data (OMT).
NOTE: Data used to create this figure available in Table A-3.

* 2007 results are based on a 2x extrapolation of the first two quarters of the year.

Use of Management Companies. The degree that nursing homes engage management companies is also directly interpretable from our dataset, according to the management-ownership relationship variable described earlier. Figure 4 shows a trend toward the use of other companies in the management of facility operations. Since 2000 the number of facilities that were self-managed has steadily decreased. Management companies are either “Separate Owner” entities or “Same Owner” entities, based on whether there is commonality in the core owners. As presented in Figure 5 and Figure 6, the use of a management company is only indicative of “outsourcing” about half the time. In 2007, for instance, around 50 percent of management companies were owned by the same entities that owned the facility. This rate has not been stable over time, but no clear trend has emerged.

FIGURE 4: Management/Ownership Relationships
Bar Chart: See Appendix Table A-4 for data used to create this chart.
SOURCE: Texas Ownership Management and Tracking Data (OMT).
NOTE: Data used to create this figure available in Table A-4.

* 2007 results are based on a 2x extrapolation of the first two quarters of the year.

 

FIGURE 5: Management Company--Relationship to Ownership
Bar Chart: See Appendix Table A-5 for data used to create this chart.
SOURCE: Texas Ownership Management and Tracking Data (OMT).
NOTE: Data used to create this figure available in Table A-5.

* 2007 results are based on a 2x extrapolation of the first two quarters of the year.

 

FIGURE 6: Management/Ownership Relationships
Bar Chart: See Appendix Table A-6 for data used to create this chart.
SOURCE: Texas Ownership Management and Tracking Data (OMT).
NOTE: Data used to create this figure available in Table A-6.

* 2007 results are based on a 2x extrapolation of the first two quarters of the year.

Increase in Ownership Complexity. The rate of Texas nursing home ownership changes, especially toward partnerships and LLCs, gives some sense of the changing corporate structures. However, these changes alone do not tell the whole story. Not only have there been major changes in ownership structure and management, the degree of complexity has greatly increased as presented in Figure 7 and Figure 8. We measure complexity as the number of levels deep at which the final entities maintain ownership stakes in nursing homes. As discussed earlier, this number ranged from one, if the top-level owner was the final owner, to seven, if the final owners were six layers deeper than the top-level (i.e., separated by multiple sub-entities). Note that if a facility had multiple final owners at different levels, the deepest level was recorded as the home’s complexity. As demonstrated in these figures, complexity has been rising over time. The percent of individuals with ownership stakes in Texas nursing homes at least five levels deep increased from 0.6 percent in 2000 to 11 percent in 2007. Meanwhile, the percent of individuals with ownership at 1-2 levels deep went down from 90 percent in 2000 to 70 percent in 2007. Finally, although the most common option in any given year was two levels deep, final ownership at three levels deep is now almost as frequent as one level (whereas in 2000 there was a 7-29 percent split); the more complex levels have grown from almost nothing to being a small minority of facilities. Put differently, the overall level of complexity has increased from final ownership being almost two levels deep to final ownership being three levels deep, on average.

FIGURE 7: NH Ownership Complexity
Bar Chart: See Appendix Table A-7 for data used to create this chart.
SOURCE: Texas Ownership Management and Tracking Data (OMT).
NOTE: Data used to create this figure available in Table A-7.

 

FIGURE 8: NH Ownership Complexity--Levels Grouped
Bar Chart: See Appendix Table A-8 for data used to create this chart.
SOURCE: Texas Ownership Management and Tracking Data (OMT).
NOTE: Data used to create this figure available in Table A-8.

The final figures of this section offer a graphic representation of how corporate structures have evolved in Texas nursing homes between 2000 and 2007, the beginning and end of our observation period (Figures 9a-9i). These figures focus on the five largest owners currently in the Texas nursing home market (Sava Senior Care, Daybreak Health Ventures, Senior Living Properties, P&M Enterprises, and Nexion Health). Across the board, companies have introduced more complicated corporate structures. Three of these (Sava, previously Mariner; Daybreak, formerly Texas Health Enterprises; and P&M Enterprises) adopted a facility-specific entity structure between 2000 and 2007, with a separate legal entity representing each of these companies’ dozens of nursing homes. Since it entered the Texas nursing home market in 2000, Nexion Health also used a facility-specific entity structure. Each of the companies has a more complex structure in 2007 relative to 2000. Daybreak added two levels of structure between the facility-specific entities and the final-level investors, including a general partner LLC with little ownership stake (1-5 percent) and a limited partner LLC with greater ownership stake (95-99 percent). In addition to forming facility-specific LPs, Sava Senior Care now has five levels of ownership between these entities and the two individuals who own the company. P&M Enterprises, formerly Texas Services and Keystone Services, formed facility-specific LPs and added another facility-specific ownership layer (a GP entity with only 1 percent stake), between the facilities and the two limited partner owners. Although Senior Living Properties did not form facility-specific limited liability entities, the company created a new level of ownership, whereby SLP Management serves as the managing member owning a nominal 0.01 percent stake of the company, between the top-level, company-wide LLC and the individual shareholders.

FIGURE 9a: Senior Living Properties, 2000
Organizational Chart: Chairman and Partners -- JE (37.5%), AE (37.5%), LB (25%); Top-Level LLC -- Senior Living Properties LLC; Homes (43).

 

FIGURE 9b: Senior Living Properties, 2007
Organizational Chart: Chairman and Shareholders -- JE (50%), AE (24.99%), LB (24.99%); Managing Member -- SLP Management Inc (0.01%); Top-Level LLC -- Senior Living Properties LLC; Homes (43).

 

FIGURE 9c: Texas Services, Keystone Services (Restructured to P&M), 2000
Organizational Chart: Limited Partners -- MD (50%), PL (50%); Texas Services Inc (1%); Top-Level LPs -- Texas Services LP, Keystone Services LP; Homes (11,7).

 

FIGURE 9d: P&M Enterprises, 2007
Organizational Chart: Limited Partners -- MD (50%), PL (50%); General Partner -- Home-Specific Care Center (1%); Facility-Specific LPs; Homes (18).

 

FIGURE 9e: Mariner Health Care (subsequently bought by Sava), 2000
Organizational Chart: Levels of Organization -- MHC Holding Company, leading to MHC Texas Holding Company; Top-Level Company -- Mariner/Living Centers of Texas; Homes (40).

 

FIGURE 9f: Sava Senior Care (formerly Mariner), 2007
Organizational Chart: Directors/Partners -- MF (32%), LG (68%); Levels of Organization -- Canyon Sudar Partners, leading to SVCare Holdings LLC, leading to Sava Senior Care LLC, leading to SSC Equity Holdings LLC, leading to SSC Submaster Holdings LLC; Partners -- SSC LP Holdings (0.01%), Home-Specific Op. Group (1%); Facility-Specific LPs; Homes (47).

 

FIGURE 9g: Texas Health Enterprises (subsequently bought by Daybreak), 2000
Organizational Chart: Owner -- PK (100%); Top-Level Company -- Texas Health Enterprises; Homes (69).

 

FIGURE 9h: Daybreak Healthcare/Ventures (formerly THE), 2007
Organizational Chart: Managing Members -- DM (20%), DR (20%), JG (20%), BP (20%), SC (20%); Limited Partner -- Daybreak Partners LLC (95-99%); General Partner -- Daybreak Venture LLC (1-5%); Facility-Specific LPs; Homes (77).

 

FIGURE 9i: Nexion Health, 2007
Organizational Chart: Shareholders -- FK CEO (42.5%), All Other Owners, BB CFO (24.5%); Levels of Organization -- Nexion Health Inc, leading to Nexion Health Leasing Inc, leading to Nexion Health of Texas Inc; Facility-Specific Companies; Homes (26).

Ownership and Management Structuring. Ownership complexity tends be significantly greater in partnerships (3.79 levels in 2007) and LLCs (2.82 levels) compared to not-for-profit corporations and others (2.07 levels). Use of a separately-owned management company is highest among LLC facilities, and it has also grown substantially--from 9.9 percent in 2000 to 27.5 percent in 2007 (this rate was even higher in 2006 (37.1 percent), a difference possibly explained by incomplete 2007 data. Partnerships and not-for-profit/other facilities have also seen growth in the use of management companies, but not to the same extent; their current levels are roughly equal now, at 9.7 percent for partnerships and 11.8 percent for not-for-profit/other in 2007.

Corporate Structure and Nursing Home Traits. With information in the OSCAR dataset, we can display descriptive trends for various nursing home traits by ownership structure, from 2000 to 2007 (again, 2007 is a partial year, as we only have OSCAR data through June 2007). In particular, we compare facilities in Texas that employ a partnership structure, those that employ a LLC structure, and those that have all other types of structures, such as not-for-profits, publicly-traded companies and government-run facilities. The partnership and LLC categories, shown in Table 4a and Table 4b, are the prevailing alternative structures used by nursing home facilities in Texas, with facilities using not-for-profit corporate structures and all others (e.g., government) depicted in Table 4c.

TABLE 4a: Partnership Structure and Various Nursing Home Traits, 2000-2007
  2000 2001 2002 2003 2004 2005 2006 2007
Chain Status   74.6%*   74.4%*   60.2%*     65.2%*     61.9%*     68.8%*     72.2%*     77.6%*  
Profit Status 99.2%*   100.0%*   99.4%* 99.6%* 99.3%* 99.4%* 99.7%* 99.5%*
ADL Score 3.7 3.8 3.8 3.7 3.7* 3.7* 3.7 3.8
Acuity Index 10.6 10.7 10.8 10.3 10.3* 10.3* 10.2 10.3
Payer Status --- --- --- --- --- --- --- ---
   % Medicare 22.5%* 18.9%* 20.5%* 18.7% 18.4%* 18.7%* 18.0%* 17.7%
   % Medicaid 59.0%* 62.4%* 60.6%* 62.9%* 63.0%* 64.0%* 65.0%* 65.1%
   % Other 18.6%* 18.8% 18.9% 18.4%- 18.6%* 17.3%* 17.1%* 17.2%
Total Beds 117.2 118.6 118.8 115.5 113.2* 115.4* 117.7 118.9
Occupancy Rate 63.4%* 69.3%* 73.7%* 72.1%* 71.4%* 73.1%* 73.6%* 71.6%
Total Deficiencies 7.3* 6.6 7.0 6.2 5.8 7.2* 6.8 6.6
Any G-Level+ Deficiency 36.9% 23.8%* 23.0% 16.5% 14.1% 20.2%* 15.2%* 15.3%*
Staffing Per Resident --- --- --- --- --- --- --- ---
   Registered Nurses (RNs) 0.12* 0.07 0.05* 0.06* 0.05* 0.06* 0.04* 0.06*
   Licensed Practical Nurses (LPNs) 0.43* 0.26 0.20* 0.18* 0.17* 0.17 0.17* 0.19*
   Total Nurses (RNs + LPNs) 0.54* 0.33 0.25* 0.24* 0.22* 0.23* 0.21* 0.25*
   Nurses’ Aides (CNAs) 0.85* 0.51* 0.47* 0.39* 0.36* 0.36* 0.34* 0.37*
OMT Ownership Complexity   2.16* 2.35* 2.50* 3.07 3.31* 3.70* 3.80* 3.79*
Outsourced Management Company 3.1%* 5.0%* 7.5% 6.3%* 6.3%* 8.1%* 9.6%* 9.7%*
Number of Observations 130 160 161 224 270 321 356 196
SOURCE: Texas Ownership Management and Tracking System (OMT) data and Online Survey and Certification Automated Record (OSCAR) data.

* significance at p<0.05.

 

TABLE 4b: Limited Liability Company Structure and Various Nursing Home Traits, 2000-2007
  2000 2001 2002 2003 2004 2005 2006 2007
Chain Status   92.6%*     90.7%*     78.0%*     77.5%*     77.5%*     74.6%*     74.1%*     73.2%*  
Profit Status 96.7%* 96.4%* 87.2%* 81.7%* 83.5%* 53.2%* 83.8%* 87.0%*
ADL Score 3.6 3.6 3.6 3.7 3.6* 3.6* 3.7 3.7
Acuity Index 10.2 10.4 10.4 10.4 10.2* 10.1* 10.4 10.3
Payer Status --- --- --- --- --- --- --- ---
   % Medicare 8.0%* 10.3%* 10.1%* 13.3% 12.8%* 12.9%* 13.0%* 15.6%
   % Medicaid 74.8%* 70.8%* 71.3%* 70.5%* 68.8%* 71.2%* 68.9%* 64.1%
   % Other 17.2%* 18.9% 18.7% 16.2%* 18.3%* 15.9%* 18.2%* 20.3%
Total Beds 101.6 102.2 103.0 105.1 106.7* 107.6* 108.0 108.7
Occupancy Rate 63.4%* 64.0%* 66.5%* 67.5%* 69.1%* 69.9%* 71.1%* 71.5%
Total Deficiencies 7.3* 6.7 6.5 5.2 5.5 7.0* 7.4 6.4
Any G-Level+ Deficiency 30.6% 31.4%* 22.0% 160.% 12.1% 21.4%* 16.2%* 13.8%*
Staffing Per Resident --- --- --- --- --- --- --- ---
   Registered Nurses (RNs) 0.04* 0.03 0.03* 0.03* 0.02* 0.02* 0.02* 0.02*
   Licensed Practical Nurses (LPNs) 0.19* 0.19 0.17* 0.15* 0.16* 0.17 0.16* 0.17*
   Total Nurses (RNs + LPNs) 0.23* 0.23 0.20* 0.18* 0.18* 0.19* 0.18* 0.19*
   Nurses’ Aides (CNAs) 0.35* 0.42* 0.38* 0.34* 0.36* 0.36* 0.34* 0.36*
OMT Ownership Complexity   2.12* 2.17* 2.59* 2.58 2.66* 2.69* 2.75* 2.82*
Outsourced Management Company 9.9%* 7.9%* 17.7% 160.%* 40.7%* 41.0%* 37.1%* 27.5%*
Number of Observations 121 140 164 169 182 173 197 138
SOURCE: Texas Ownership Management and Tracking System (OMT) data and Online Survey and Certification Automated Record (OSCAR) data.

* significance at p<0.05.

 

TABLE 4c: Other Company Structure and Various Nursing Home Traits, 2000-2007
  2000 2001 2002 2003 2004 2005 2006 2007
Chain Status   71.1%     70.5%     61.3%     61.0%     58.4%     53.7%     53.6%     50.0%  
Profit Status 74.9% 74.7% 73.4% 71.0% 72.2% 69.2% 68.6% 65.3%
ADL Score 3.6 3.7 3.7 3.7 3.7 3.7 3.7 3.7
Acuity Index 10.3 10.3 10.3 10.2 10.3 10.2 10.2 10.3
Payer Status --- --- --- --- --- --- --- ---
   % Medicare 16.4% 16.5% 16.1% 15.1% 15.0% 15.4% 16.3% 17.3%
   % Medicaid 66.0% 65.0% 64.0% 64.6% 64.3% 64.4% 60.6% 61.9%
   % Other 17.7% 18.5% 19.9% 20.3% 20.7% 20.2% 23.2% 20.8%
Total Beds 102.5 101.6 104.3 104.1 105.5 106.3 103.3 103.5
Occupancy Rate 69.2% 71.4% 71.0% 74.9% 73.7% 72.1% 72.7% 71.6%
Total Deficiencies 6.3 6.6 6.2 5.1 5.4 6.3 6.9 6.3
Any G-Level+ Deficiency 29.2% 25.8% 19.9% 13.7% 11.0% 14.6% 18.6% 10.3%
Staffing Per Resident --- --- --- --- --- --- --- ---
   Registered Nurses (RNs) 0.11 0.14 0.08 0.07 0.06 0.07 0.07 0.06
   Licensed Practical Nurses (LPNs)   0.27 0.27 0.21 0.19 0.21 0.21 0.21 0.25
   Total Nurses (RNs + LPNs) 0.39 0.41 0.29 0.26 0.27 0.27 0.27 0.31
   Nurses’ Aides (CNAs) 0.53 0.44 0.44 0.44 0.49 0.48 0.45 0.50
OMT Ownership Complexity 1.74 1.92 2.14 2.34 2.07 2.28 2.12 2.07
Outsourced Management Company   2.3% 3.6% 12.8% 19.7% 21.1% 18.2% 14.6% 11.8%
Number of Observations 733 743 729 651 625 555 478 262
SOURCE: Texas Ownership Management and Tracking System (OMT) data and Online Survey and Certification Automated Record (OSCAR) data.

Several trends are worth noting. First, the number of facilities using a partnership structure has approximately tripled from 2000 to 2007, while the number of LLCs has roughly doubled. Both of these structures have been available to providers throughout the time period, but have become increasingly popular over time. Correspondingly, given that the total number of Texas facilities has been fairly constant, the number of other types of facilities has decreased over the study period. Regarding nursing home characteristics, both partnership and LLC structures tend to be used by for-profit, chain facilities, relative to other facilities in Texas. In particular, nearly all partnerships (99.5 percent in 2007) are for-profits.

Across the time period 2000-2007, resident acuity and ADL scores, payer mix and survey deficiencies are fairly comparable across the three categories, indicating that there may be very little relationship between corporate structuring and resident characteristics. Nurse and aide staffing, however, tends to be higher in not-for-profit and other facilities than in LLC and partnership facilities throughout the study period. In 2007, partnerships and LLCs have only 0.25 and 0.19 nurse FTEs (registered nurses [RNs] and licensed practical nurses [LPNs]) per resident, respectively, compared to 0.31 in not-for-profit and other facilities, and a similar skew is observed in certified nurses aide (CNA) staffing.

Another way of looking at the relationship of ownership and corporate structure with nursing home traits is with regression models. Tables 5a-5g show a series of regressions of various nursing home traits on several ownership (structure, management outsourcing) and controls (ownership complexity, facility size, acuity, profit status, chain status, etc.). These tables examine seven dependent variables in particular: RN staffing (Table 5a); RN+LPN staffing (Table 5b); CNA staffing (Table 5c); Total deficiencies (Table 5d); G-level deficiencies (Y/N) (Table 5e); percent Medicare (Table 5f); and percent Medicaid (Table 5g). All are linear regressions except for those looking at G-level deficiencies, which uses logistic regression and reports odds ratios. We used facility-level fixed effects for each regression and included a range of control variables, including year dummies or fixed effects. The regressions include all management/ownership types in the same model, thus identifying the marginal effects of these features in the context of the others. As a sensitivity check, we also modeled these types separately in regressions that are not shown.

TABLE 5: Description of Regression Models
  Management
Any Outsource Only
Define dummy variable to group facilities using ANY management company (including cases where the facility and management company are owned by the same entity) to compare against facilities not using ANY management company Define dummy variable to group only facilities that use a management company with distinct ownership from the facility to compare against facilities that use no management company and those that use a management companies owned by the final owners of the facility
Structure     Liability   Define dummy variable grouping facilities where ANY liability structure is implemented (LLC, LP, GP), and include an interaction term of this dummy with profit status Regression
(1)
Regression
(3)
Types Define dummy variables for each of the structure types of interest (for-profit, LLC, LP; using non-profit as the comparison group), with no additional interaction terms Regression
(2)
Regression
(4)

 

TABLE 5a: Regression of RN Staffing on Ownership Traits of Interest
RN Staffing Per Resident (1) (2) (3) (4)
Number of Observations 6,983 6,983 6,983 6,983
Total Beds 0.002
(0.003)
0.002
(0.003)
0.002
(0.003)
0.002
(0.003)
Profit Status (0/1) -0.010
(0.011)
-0.011
(0.014)
-0.010
(0.011)
-0.012
(0.014)
Government Status (0/1) 0.224
(0.047)
0.036
(0.048)
0.022
(0.047)
0.0036
(0.048)
Chain Status (0/1)   -0.016*  
(0.006)
  -0.017*  
(0.006)
  -0.017*  
(0.006)
  -0.017*  
(0.006)
Hospital-Based Status (0/1) -0.012
(0.063)
-0.013
(0.063)
-0.012
(0.063)
-0.014
(0.063)
ADL Score -0.073
(0.083)
-0.073
(0.083)
-0.073
(0.083)
-0.073
(0.083)
Ownership Complexity (1-7) -0.007
(0.004)
-0.004
(0.004)
-0.006
(0.004)
-0.004
(0.004)
Management Status -- Outsource   ---
---
---
---
-0.006
(0.005)
-0.005
(0.005)
Management Status -- ANY -0.011
(0.006)
-0.008
(0.006)
---
---
---
---
Liability (LLC, LP, GP) (0/1) -0.012
(0.013)
---
---
-0.012
(0.013)
---
---
Liability x Profit Interaction 0.021
(0.017)
---
---
0.020
(0.018)
---
---
Type -- For-Profit ---
---
0.016
(0.032)
---
---
0.017
(0.032)
Type -- LLC ---
---
0.014
(0.028)
---
---
0.014
(0.029)
Type -- Partnership ---
---
0.015
(0.034)
---
---
0.013
(0.034)
Type -- Other ---
---
-0.067
(0.048)
---
---
-0.068
(0.048)
SOURCE: Texas Ownership Management and Tracking System (OMT) data and Online Survey and Certification Automated Record (OSCAR) data.

Reference ownership type is not-for-profit.
* significance at p<0.05.

 

TABLE 5b: Regression of Nurse (RN+LPN) Staffing on Ownership Traits of Interest
  Nurse (RN+LPN) Staffing Per Resident   (1) (2) (3) (4)
Number of Observations 6,983 6,983 6,983 6,983
Total Beds 0.004
(0.005)
0.004
(0.005)
0.004
(0.005)
0.004
(0.005)
Profit Status (0/1) -0.016
(0.031)
0.010
(0.033)
-0.016
(0.031)
0.010
(0.033)
Government Status (0/1) -0.004
(0.110)
0.019
(0.111)
-0.004
(0.110)
0.020
(0.111)
Chain Status (0/1)   -0.041*  
(0.013)
  -0.042  
(0.013)*
  -0.041  
(0.013)*
  -0.042  
(0.013)*
Hospital-Based Status (0/1) 0.021
(0.107)
0.019
(0.106)
0.021
(0.107)
0.018
(0.106)
ADL Score -0.130
(0.164)
-0.130
(0.164)
-0.130
(0.164)
-0.130
(0.164)
Ownership Complexity (1-7) -0.015
(0.011)
-0.012
(0.010)
-0.015
(0.010)
-0.012
(0.010)
Management Status -- Outsource   ---
---
---
---
-0.002
(0.011)
-0.001
(0.011)
Management Status -- ANY -0.012
(0.015)
-0.009
(0.014)
---
---
---
---
Liability (LLC, LP, GP) (0/1) -0.040
(0.045)
---
---
-0.040
(0.045)
---
---
Liability x Profit Interaction 0.048
(0.052)
---
---
0.046
(0.053)
---
---
Type -- For-Profit ---
---
-0.044
(0.060)
---
---
-0.044
(0.060)
Type -- LLC ---
---
-0.044
(0.052)
---
---
-0.044
(0.052)
Type -- Partnership ---
---
-0.044
(0.059)
---
---
-0.046
(0.059)
Type -- Other ---
---
-0.114
(0.074)
---
---
-0.116
(0.074)
SOURCE: Texas Ownership Management and Tracking System (OMT) data and Online Survey and Certification Automated Record (OSCAR) data.

Reference ownership type is not-for-profit.
* significance at p<0.05.

 

TABLE 5c: Regression of Aide Staffing on Ownership Traits of Interest
Aide Staffing Per Resident (1) (2) (3) (4)
Number of Observations 6,983 6,983 6,983 6,983
Total Beds -0.001
(0.002)
-0.001
(0.002)
-0.001
(0.002)
-0.001
(0.002)
Profit Status (0/1) -0.063
(0.040)
0.017
(0.042)
-0.063
(0.040)
0.016
(0.041)
Government Status (0/1) 0.015
(0.091)
0.047
(0.090)
0.013
(0.091)
0.045
(0.090)
Chain Status (0/1)   -0.052*  
(0.014)
  -0.051*  
(0.015)
  -0.052*  
(0.014)
  -0.051*  
(0.015)
Hospital-Based Status (0/1) -0.050
(0.052)
-0.054
(0.051)
-0.049
(0.052)
-0.053
(0.051)
ADL Score 0.019
(0.038)
0.019
(0.038)
0.018
(0.038)
0.019
(0.038)
Ownership Complexity (1-7) -0.015
(0.010)
-0.011
(0.009)
-0.015
(0.010)
-0.011
(0.009)
Management Status -- Outsource   ---
---
---
---
-0.018
(0.023)
-0.018
(0.024)
Management Status -- ANY -0.005
(0.018)
-0.003
(0.018)
---
---
---
---
Liability (LLC, LP, GP) (0/1) -0.147
(0.087)
---
---
-0.148
(0.088)
---
---
Liability x Profit Interaction 0.186*
(0.091)
---
---
0.184*
(0.089)
---
---
Type -- For-Profit ---
---
-0.091
(0.062)
---
---
-0.089
(0.061)
Type -- LLC ---
---
-0.077
(0.070)
---
---
-0.078
(0.070)
Type -- Partnership ---
---
-0.056
(0.060)
---
---
-0.058
(0.062)
Type -- Other ---
---
-0.127*
(0.052)
---
---
-0.126*
(0.052)
SOURCE: Texas Ownership Management and Tracking System (OMT) data and Online Survey and Certification Automated Record (OSCAR) data.

Reference ownership type is not-for-profit.
* significance at p<0.05.

 

TABLE 5d: Regression of Deficiencies on Ownership Traits of Interest
Total Deficiencies (1) (2) (3) (4)
Number of Observations 6,983 6,983 6,983 6,983
Total Beds 0.015
(0.009)
0.015
(0.009)
0.015
(0.009)
0.015
(0.009)
Profit Status (0/1) 0.743
(-0.568)
0.419
(0.631)
0.746
(0.569)
0.410
(0.632)
Government Status (0/1) -1.077
(1.307)
-0.963
(1.328)
-1.086
(1.309)
-0.970
(1.328)
Chain Status (0/1) 0.067
(0.279)
0.053
(0.278)
0.064
(0.279)
0.052
(0.279)
Hospital-Based Status (0/1)   1.419*  
(0.657)
  1.460*  
(0.667)
  1.414*  
(0.659)
  1.460*  
(0.668)
ADL Score -0.163
(0.191)
-0.166
(0.190)
-0.165
(0.191)
-0.169
(0.191)
Ownership Complexity (1-7) 0.180
(0.162)
0.211
(0.158)
0.180
(0.161)
0.210
(0.157)
Management Status -- Outsource   ---
---
---
---
-0.177
(0.306)
-0.159
(0.307)
Management Status -- ANY -0.172
(0.245)
-0.105
(0.242)
---
---
---
---
Liability (LLC, LP, GP) (0/1) 0.117
(0.934)
---
---
0.105
(0.933)
---
---
Liability x Profit Interaction -1.496
(1.003)
---
---
-1.528
(1.009)
---
---
Type -- For-Profit ---
---
-0.077
(0.776)
---
---
-0.061
(0.779)
Type -- LLC ---
---
-0.677
(0.772)
---
---
-0.682
(0.770)
Type -- Partnership ---
---
-1.753*
(0.795)
---
---
-1.784*
(0.796)
Type -- Other ---
---
-0.440
(0.585)
---
---
-0.448
(0.583)
SOURCE: Texas Ownership Management and Tracking System (OMT) data and Online Survey and Certification Automated Record (OSCAR) data.

Reference ownership type is not-for-profit.
* significance at p<0.05.

 

TABLE 5e: Regression of Serious Deficiencies on Ownership Traits of Interest
  G-Level (or higher) Deficiency -- ODDS RATIOS   (1) (2) (3) (4)
Number of Observations 4,413 4,413 4,413 4,413
Total Beds   1.017*  
(0.007)
  1.018*  
(0.007)
  1.017*  
(0.007)
  1.018*  
(0.007)
Profit Status (0/1) 1.196
(0.348)
1.481
(0.403)
1.195
(0.348)
1.478
(0.403)
Government Status (0/1) 1.572
(1.164)
1.875
(1.407)
1.573
(1.185)
1.866
(1.400)
Chain Status (0/1) 0.903
(0.115)
0.896
(0.114)
0.904
(0.115)
0.898
(0.114)
Hospital-Based Status (0/1) 3.311
(2.160)
3.431
(2.240)
3.312
(2.160)
3.430
(2.238)
ADL Score 1.089
(0.121)
1.089
(0.120)
1.088
(0.120)
1.088
(0.120)
Ownership Complexity (1-7) 1.147
(0.086)
1.171*
(0.088)
1.146
(0.086)
1.168*
(0.088)
Management Status -- Outsource   ---
---
---
---
1.018
(0.153)
1.018
(0.154)
Management Status -- ANY 1.031
(0.086)
1.060
(0.127)
---
---
---
---
Liability (LLC, LP, GP) (0/1) 0.776
(0.352)
---
---
0.777
(0.353)
---
---
Liability x Profit Interaction 0.969
(0.449)
---
---
0.974
(0.451)
---
---
Type -- For-Profit ---
---
0.540
(0.227)
---
---
0.538
(0.226)
Type -- LLC ---
---
0.549
(0.237)
---
---
0.546
(0.235)
Type -- Partnership ---
---
0.369*
(0.161)
---
---
0.374*
(0.163)
Type -- Other ---
---
0.593
(0.334)
---
---
0.599
(0.337)
SOURCE: Texas Ownership Management and Tracking System (OMT) data and Online Survey and Certification Automated Record (OSCAR) data.

Reference ownership type is not-for-profit.
* significance at p<0.05.

 

TABLE 5f: Regression of Percent Medicare on Ownership Traits of Interest
Percent Medicare Payment (1) (2) (3) (4)
Number of Observations 6,983 6,983 6,983 6,983
Total Beds -0.010
(0.049)
-0.006
(0.046)
-0.010
(0.049)
-0.007
(0.046)
Profit Status (0/1)   -2.440  
(1.330)
  -1.831  
(1.153)
  -2.423  
(1.332)
  -1.850  
(1.158)
Government Status (0/1) -3.981
(2.441)
-4.198
(2.435)
-3.989
(2.444)
-4.164
(2.438)
Chain Status (0/1) 0.207
(0.382)
0.239
(0.381)
0.187
(0.381)
0.218
(0.381)
Hospital-Based Status (0/1) 2.561
(1.721)
2.602
(1.705)
2.528
(1.714)
2.573
(1.699)
ADL Score 0.367
(0.470)
0.362
(0.466)
0.362
(0.474)
0.355
(0.470)
Ownership Complexity (1-7) -0.260
(0.263)
-0.294
(0.264)
-0.248
(0.265)
-0.271
(0.264)
Management Status -- Outsource   ---
---
---
---
-0.464
(0.592)
-0.475
(0.586)
Management Status -- ANY -0.798*
(0.396)
-0.837*
(0.416)
---
---
---
---
Liability (LLC, LP, GP) (0/1) -0.449
(23.46)
---
---
-0.481
(2.376)
---
---
Liability x Profit Interaction 0.681
(2.364)
---
---
0.568
(2.357)
---
---
Type -- For-Profit ---
---
-1.000
(2.236)
---
---
-0.951
(2.213)
Type -- LLC ---
---
-0.236
(2.508)
---
---
-0.216
(2.528)
Type -- Partnership ---
---
-0.629
(2.050)
---
---
-0.816
(2.100)
Type -- Other ---
---
1.723
(2.154)
---
---
1.592
(2.151)
SOURCE: Texas Ownership Management and Tracking System (OMT) data and Online Survey and Certification Automated Record (OSCAR) data.

Reference ownership type is not-for-profit.
* significance at p<0.05.

 

TABLE 5g: Regression of Percent Medicaid on Ownership Traits of Interest
Percent Medicaid Payment (1) (2) (3) (4)
Number of Observations 6,983 6,983 6,983 6,983
Total Beds 0.000
(0.017)
-0.003
(0.016)
0.001
(0.017)
-0.002
(0.016)
Profit Status (0/1) -1.002
(1.418)
0.033
(1.416)
-1.028
(1.414)
0.038
(1.417)
Government Status (0/1) -1.099
(2.549)
-0.645
(2.449)
-1.113
(2.542)
-0.707
(2.445)
Chain Status (0/1) 1.285*
(0.546)
1.270*
(0.543)
1.317*
(0.546)
1.298*
(0.543)
Hospital-Based Status (0/1)   -6.049*  
(1.922)
  -6.258*  
(1.933)
  -5.994*  
(1.913)
  -6.217*  
(1.926)
ADL Score -1.177*
(0.595)
-1.150
(0.592)
-1.176*
(0.597)
-1.147
(0.594)
Ownership Complexity (1-7) -0.274
(0.301)
-0.258
(0.309)
-0.298
(0.303)
-0.291
(0.309)
Management Status -- Outsource   ---
---
---
---
0.330
(0.569)
0.325
(0.567)
Management Status -- ANY 1.048*
(0.450)
0.954*
(0.448)
---
---
---
---
Liability (LLC, LP, GP) (0/1) -4.753*
(1.965)
---
---
-4.730*
(1.970)
---
---
Liability x Profit Interaction 4.507*
(2.103)
---
---
4.628*
(2.114)
---
---
Type -- For-Profit ---
---
-0.308
(1.486)
---
---
-0.343
(1.481)
Type -- LLC ---
---
-3.396*
(1.435)
---
---
-3.435*
(1.429)
Type -- Partnership ---
---
0.067
(1.448)
---
---
0.264
(1.455)
Type -- Other ---
---
-3.268*
(1.182)
---
---
-3.099*
(1.170)
SOURCE: Texas Ownership Management and Tracking System (OMT) data and Online Survey and Certification Automated Record (OSCAR) data.

Reference ownership type is not-for-profit.
* significance at p<0.05.

For each of the dependent variables, we ran four regressions, based on four different combinations (2x2) of management status and ownership type (see Table 5 for a tabular presentation of the regression models). More specifically, we modeled facilities’ use of a management company two ways: (a) defining a dummy variable to group facilities using ANY management company (including cases where the facility and management company are owned by the same entity) to compare against facilities not using ANY management company (regressions 1 and 2); and (b) defining a dummy variable to group only facilities that use a management company with distinct ownership from the facility to compare against other facilities, including those that use no management company and those that use a management companies owned by the same owners as the facility owner (regressions 3 and 4). Ownership structure is also modeled two different ways: first, defining a dummy variable grouping facilities where ANY limited liability structure is implemented (LLC, LP, GP) (regressions 1 and 3). As both for-profit and not-for-profit companies may use these structures, we include an interaction term with for-profit status interacted with this variable. Second, we defined separate dummy variables for each of the structure types of interest (for-profit, LLC, LP; using not-for-profit as the comparison group), with no additional interaction terms (regressions 2 and 4).

TABLE 6: Top Real Estate Owners of Texas Nursing Homes, 2007*
Real Estate Owners
(from OMT data)
Facility Operators (as identified in OSCAR)
  # Facilities   #1 #2 #3
NH Texas Properties LP 63 P&M Healthcare Enterprises New Bell Services  
Sava Senior Care 53 Sava Senior Care Mariner Healthcare Living Centers of Texas
Capmark Commercial Mortgage Corporation   39 Senior Living Properties LLC      
CSE Alamo LLC 34 P&M Healthcare Enterprises [OTHER OPERATORS]    
General Electric Capital Corporation 33 Senior Living Properties LLC    
New Bell Facilities Services 29 P&M Healthcare Enterprises New Bell Services [OTHER OPERATORS]  
HCR Manorcare Properties LLC 21 Manorcare    
SHG Resources LP 20 Summit Care Skilled Healthcare Group Fountain View
Lasalle Bank NA 18 Daybreak Healthcare    
Diversicare Leasing Corp 14 {OTHER OPERATORS]    
Granite Master Partners LP 13 Trisun Healthcare Manorcare [OTHER OPERATORS]
HCRI Texas Properties Ltd 13 Lyric Healthcare Holdings Integrated Health Services [OTHER OPERATORS]
LTC Properties Inc 12 Texas Health Enterprises Daybreak Healthcare  
Texas Health Enterprises 11 Daybreak Healthcare Texas Health Enterprises  
Lyric Health Care Holdings 10 Lyric Healthcare Holdings Integrated Health Services [OTHER OPERATORS]
Karan Associates 9 Daybreak Healthcare [OTHER OPERATORS]  
Preferred Care Inc 9 Centers for Long Term Care BMW Healthcare [OTHER OPERATORS]
Skilled Healthcare Holdings 9 Centers for Long Term Care BMW Healthcare [OTHER OPERATORS]
Bayside Street Inc 7 Stone Gate Senior Care [OTHER OPERATORS]  
Living Centers of Texas 7 Mariner Health Care Living Centers of Texas [OTHER OPERATORS]
Marbro Investments Ltd 7 Marwitz Healthcare Services [OTHER OPERATORS]  
PHCC-MT Healthcare Realty LLC 7 Paramount Healthcare    
State of Texas Veterans Land Board 7 Texas Veterans Land Board    
Sterling Acquisition Corp 7 Senior Management Services of America    
SOURCE: Texas Ownership Management and Tracking System (OMT) data and Online Survey and Certification Automated Record (OSCAR) data.

* Real estate owners can own facilities that are operated by multiple entities. In addition, multiple real estate owners may be listed for individual facilities. For example, P&M Healthcare Enterprises facilities are listed as being owned by NH Texas Properties LP (all 63 facilities), General Electric Capital Corporation 33 facilities), and New Bell Facilities Services (29 facilities). It is not possible to discern final ownership or ownership shares from the Texas real estate data.

Across the regressions, it is striking how few statistically significant relationships there are between the ownership variables of interest and the quality-related traits of interest. Moreover, the few statistically significant results paint no consistent picture, and there is very little we can discern from these regression results. The bottom line is that these structural changes alone do not result in shifts in staffing, payer mix, or survey deficiencies. Change in corporate structure did not affect a change in nursing home traits, including traits for quality of care.

Real Estate Ownership. Table 6 shows the top real estate owners of Texas nursing homes (i.e., the owners of the brick-and-mortar facility and the land on which the facility is located) and the operators/licensees identified in OSCAR at the facilities owned by these entities. These data are for the most recent survey observation only, meaning that each facility appears only once in the data. Importantly, it is possible that more than one real estate owner is listed for a particular facility at the same time. In addition, individual real estate owners may own facilities operated by multiple operators. Some real estate owners (e.g., Sava and ManorCare) are clearly connected to facility operations, at least in name; for other entities (e.g., NH Texas Properties and SHG Resources LP), the relationship between the operator of record and the real estate owner is not as clear. There also appears to be overlapping ownership of facilities, which is partly a feature of the (non-hierarchical) Texas real estate data structure itself. For example, 63 facilities operated by P&M Healthcare Enterprises are owned by NH Texas Properties and 34 and 29 facilities owned by CSE Alamo LLC and New Bell Facilities Services, respectively. P&M Healthcare Enterprises operates 63 facilities in Texas. It is not possible from the Texas real estate data to discern what ownership shares are held by the entities listed.

A final table shows several nursing characteristics based on the facility’s real estate status during the final four quarters of our dataset (3Q2006-2Q2007). These descriptive analyses, shown in Table 7, divide facilities into three categories: those with owner obligations (own), those with rent/lease obligations (rent), and those with mixed obligations (mix). In particular, facilities are categorized as renters if their real estate obligation is defined as lease or sublease; and facilities are categorized as owners is their real estate obligation is defined as mortgage, lien, deed of trust, warranty deed, note, or if they own outright. Many facilities had obligations in both categories as well as obligations labeled “other.” It should be noted that these divisions were neither straightforward nor mutually exclusive, hence giving rise to the “mix” category.

Despite these complications, some insights can be gleaned from the data. First, relative to for-profit facilities, not-for-profit facilities are more likely to have an owner-type obligation (60.9 percent vs. 19.5 percent, respectively). To a much lesser extent, non-chain facilities are more likely to have an ownership obligation relative to chain facilities (32.4 percent vs. 21.6 percent, respectively). The corollary to this point is that for-profit facilities are much more likely to have rental or mixed obligations relative to not-for-profits (80.5 percent vs. 39.1 percent, respectively). Looking across real estate obligations, some trends emerge. While patient characteristics and payment types do not strongly differ across own, rent, or mixed obligations, rented and mixed facilities tend to be bigger than those that are owned (116.4 beds and 112.6 bed, respectively, vs. 101.8). Deficiency rates are also similar across these groups, but nurse staffing is higher in owned facilities compared to rented or mixed facilities. Ownership complexity tended to be higher in rented and mixed facilities (3.18 and 3.27, respectively) than in those that are owned (2.02), though the use of an outsourced management company was higher among owners than in either facility that were rented or that had mixed ownership (22.4 percent for owners and 11.8 percent and 15.0 percent for renters and mixed ownership, respectively).

TABLE 7: Nursing Home Traits Across Real Estate Status, 2007
  Own Rent Mix
Percent of chains in each category   21.6%     45.3%     33.1%  
Percent of non-chains in each category 32.4% 42.0% 25.6%
Percent of for-profits in each category 19.5% 46.9% 33.6%
Percent of non-profits in each category   60.9% 27.6% 11.5%
Average traits, by category
Chain Status 55.9% 67.2% 71.1%
Profit Status 66.2% 91.2% 94.7%
ADL Score 3.7 3.7 3.7
Acuity Index 10.3 10.3 10.2
Payer Status --- --- ---
% Medicare 11.9% 14.0% 12.3%
% Medicaid 64.7% 68.0% 67.6%
% Other 23.4% 18.0% 20.2%
Total Beds 101.8 116.4 112.6
Occupancy Rate 70.0% 73.2% 70.8%
Total Deficiencies 7.0 7.2 7.0
Total G-Level+ Deficiencies 0.4 0.4 0.3
Staffing Per Resident --- --- ---
Registered Nurses (RNs) 0.04 0.02 0.02
Licensed Practical Nurses (LPNs) 0.22 0.17 0.17
Total Nurses (RNs + LPNs) 0.25 0.19 0.19
Nurses' Aides (CNAs) 0.46 0.36 0.37
OMT Ownership Complexity 2.02 3.18 3.27
Outsourced Management Company 22.4% 11.8% 15.0%
Number of Observations 281 491 339
SOURCE: Texas Ownership Management and Tracking System (OMT) data and Online Survey and Certification Automated Record (OSCAR) data.

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