| Abstract: | This empirical study in the nursing home industry attempts to delineate factors, and thus acquire insights, as to capital expenditures, and address a critical issue regarding governmental reimbursement policy and the economic viability of health care institutions. Combinations of financial performance, financial structure, and institutional context associated with high capital investment nursing homes differ from combinations associated with low capital investment homes. A multivariate analysis of data obtained from 185 nursing homes shows that although there was some difference between the two groups of nursing homes in basic financial and institutional characteristics, only a small subset of the variables were statistically significant discriminators. The hypothesis was then examined within each of the three major nursing home segments—for-profit, not-for-profit, and country homes. Neither financial performance, financial structure, nor institutional context alone is sufficient to explain differences in capital investment behavior. Perhaps more importantly, the extent to which these combination of factors do contribute to explaining capital investment strategies differs within each of the major segments of the industry. Also, these combinations of factors generally differ across the major industry segments as they relate to capital investment strategies. |
