NJ Nonprofit Nursing Homes Distinctly Outperform For-profits

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Holding hands

August 3, 2014; NJ Spotlight

For three or more years, NPQ has been covering studies showing that nonprofit nursing homes provide better care at a lower cost than for-profits. You can see some of our related posts here and here. The same is true with regard to hospices and, we find now, also in home health care. Shouldn’t such consistent data drive federal contracting policies? Maybe the profit motive and the care of vulnerable people are not a good mix.

Now, NJ Spotlight reports that the Garden State fits right into that mold. On the “Nursing Home Compare” website, the Centers for Medicare and Medicaid Services provide a five-star rating system based on the results of three years of annual health inspections, staffing levels of nurses and nursing aides, and nine different quality measurements. Nearly one-third of the New Jersey nursing homes listed on the site—114 of 364—received five-star ratings. However, the vast majority of them had less than perfect scores in one or more of the three factors used to determine the overall rating. Out of 364 nursing homes in the State of New Jersey, only eight nursing homes in the entire state received five stars for each factor.

Four of the eight five-star facilities are not traditional nursing homes; two are transitional units within hospitals and two are rehabilitation centers. But “all four of the all-five-star facilities that are located in continuing care retirement communities are operated by nonprofits.”

Again, this needs to bring up federal contracting questions. The public does not need profiteering in this area, for any number of reasons.

It also makes us wonder: In this area, there is good data on which comparisons can be made. What is the story in other fields where both nonprofits and for-profits provide services? —Ruth McCambridge


  • Steve Moran

    This kind of story is completely irresponsible because it uses selected facts to tell a distorted story. While there is no doubt that not-for-profits show better performance values it is not particularly because somehow not-for-profits are more noble. Rather it is because of these factors:

    1. Not-For-Profits have a much much higher percentage of private pay residents that do for profit providers. It is obvious that having more cash to work with per patient day will result in better outcomes. In point of fact the for profit nursing industry cares for 95% of the Medicaid population. Perhaps we as a nation should be asking why luxury senior housing communities caring for the wealthy should be receiving tax breaks.

    2. Not-For-Profits are treated more gently than for profit organizations by regulators under the assumption that they are going to do the right thing.

    Steve Moran
    Publisher Senior Housing Forum.