Working Papers

Efficiency estimation with panel quantile regression: An application using longitudinal data from nursing homes in Ontario, Canada

Amy Hsu, Adrian Rohit Dass, Whitney Berta, Peter Coyte, Audrey Laporte

This paper investigates the technical efficiency of nursing homes on Ontario, Canada. We apply Quantile Regression (QR) with a Mundlak specification to a panel dataset of 627 nursing homes, observed over 15 years. Results from the QR models found chain affiliation and urban location to be positive predictors of technical efficiency in the context of a case-mix adjusted volume based outcome measure. The effect of profit status varied across the conditional quantiles. The analysis presented in this paper aims to demonstrate a novel approach to efficiency measurement, and suggests that cost containment strategies (e.g., prospective reimbursement) and restrictions on long-term care bed supply in the market may continue to foster the expansion of nursing home chains in this sector.

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Paper Keywords

long-term care, nursing homes, technical efficiency, quantile regression, panel data