Nursing Home Scandal

What do nursing homes and mental institutions have in common? They're both perpetual fodder for the six o'clock news. Almost any enterprising reporter can find scandalous conditions there, if there is nothing more pressing to report on. [link]

The latest Inspector General's report finds:

  • More than 90% of all nursing homes are violating federal health and safety standards.
  • About 17% have deficiencies that are causing "actual harm or immediate jeopardy to patients."

Since 75% of the patients are Medicare and/or Medicaid beneficiaries, there is no price competition among these facilities.

Here is the principle explained before at this site here: when providers don't compete on price, they don't compete on quality either. In fact, in a very real sense, when they don't compete on price they don't compete at all.

Comments (1)

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  1. Greg says:

    I believe there is a significant contrast here with assisted living facilities, where the providers are competing on price and on quality.

    I have not heard about any quality problems with these.