Asymmetric information, ownership and quality of care: an empirical analysis of nursing homes

J Health Econ. 2002 Mar;21(2):293-311. doi: 10.1016/s0167-6296(01)00123-0.


Theoretically, when asymmetric information exists, nonprofit organizations, due to the attenuation of the property right, provide better quality of service than do the for-profits. Despite extensive theoretical examination of the behavior of nonprofits, there has been very little empirical testing of the plausibility of these theories. This article addresses the effect of ownership type on the quality of service in the nursing home industry, an environment particularly conducive to identifying the existence of asymmetric information. The study shows that the differences between for-profit and nonprofit homes do become manifest when asymmetric information is present.

Publication types

  • Comparative Study
  • Evaluation Study
  • Research Support, U.S. Gov't, P.H.S.

MeSH terms

  • Activities of Daily Living / classification
  • Aged
  • Data Collection
  • Data Interpretation, Statistical
  • Frail Elderly / statistics & numerical data
  • Health Facilities, Proprietary / standards*
  • Health Services Research
  • Humans
  • Intergenerational Relations
  • Medicare
  • Nursing Homes / organization & administration*
  • Nursing Homes / standards
  • Organizations, Nonprofit / standards*
  • Ownership / economics
  • Ownership / statistics & numerical data*
  • Proportional Hazards Models
  • Quality Indicators, Health Care / economics
  • Quality Indicators, Health Care / statistics & numerical data*
  • Spouses
  • United States
  • Visitors to Patients