The Effects of Chains on the Measurement of Competition in the Nursing Home Industry

Med Care Res Rev. 2019 Jun;76(3):315-336. doi: 10.1177/1077558717701771. Epub 2017 Apr 7.


Consistently accounting for more than 50% of the nursing homes in the United States, corporate chains have played an important role in the industry for several decades. However, few studies have explicitly considered the role of chains in measuring competition in nursing home markets. In this study, we use a newly developed database tracking common ownership over a period of nearly two decades to compare chain-adjusted and unadjusted measures of competition at the county and 25 km fixed-radius levels and explore how the differences would affect the assessment of local market structure. On average, the chain-adjusted Herfindahl-Hirschman Indexes (HHIs) are about 0.02 higher than the unadjusted HHIs. Each year, about 20% to 22% of the counties would appear more concentrated when recalculating HHIs accounting for common ownership. Evidence suggests that nursing home chains tend to focus more on expanding access to new markets within a state than to increasing market power within a smaller local market.

Keywords: chains; competition; economics; long-term care; nursing home.

Publication types

  • Research Support, N.I.H., Extramural

MeSH terms

  • Economic Competition / economics*
  • Economic Competition / statistics & numerical data*
  • Humans
  • Nursing Homes / economics*
  • Nursing Homes / statistics & numerical data*
  • Ownership / organization & administration*
  • United States