Report Release – The Role of Quality Ratings in Long-Term Care: Evidence from New Jersey
The United States, with its growing elderly population, is experiencing a significant demographic shift. This trend is evident in New Jersey, which faces rapid population aging and increasing healthcare expenditures. This in turn highlights the critical need to ensure high-quality long-term care, with nursing homes playing a central role. New Jersey relies on nursing homes for long-term care more than many other states, making it essential to implement strategies that incentivize quality improvements and meet the evolving needs of this vulnerable population.
This report evaluates the quality of nursing homes in New Jersey relative to national trends and examines how facilities in the state respond to government-imposed quality standards and the influence of the five-star quality rating. We create and analyze a unique panel dataset (2013–2023) derived from CMS’s Nursing Home Compare (NHC), along with the Certification and Survey Provider Enhanced Reporting (CASPER) database and the American Community Survey (ACS). We first evaluate quality trends from 2013 to 2023 based on CMS’s five-star ratings and then employ regression models to predict nursing home performance, accounting for various facility and county characteristics.
Our findings reveal that while New Jersey nursing homes generally outperform the national average, their overall ratings have declined significantly since 2020. Nursing homes that exceeded their own historical performance or the county average in the previous year are more likely to sustain or improve their ratings. Conversely, low-performing nursing homes are at a higher risk of further decline if their ratings fall below the county average or show year-over-year deterioration. This analysis enhances understanding of performance-based incentives in shaping nursing home behavior, with insights to guide policymakers and healthcare providers in designing and selecting effective strategies to improve long-term care quality.
Authors